"To preserve the reputation of the Fraternity unsullied must be your constant care."


Tuesday, January 24, 2017

GL Arkansas Lawsuit Dismissed

As mentioned here back in October, the Grand Lodge of Arkansas lost $500,000 in a failed real estate investment scheme dating back to 2008. They subsequently attempted to recover their losses by suing various parties involved in the fund in federal court in April 2015. But by last October, the judge in the Arkansas Eastern District court, Hon. J. Leon Holmes, had already thrown out all charges against four of the six defendants in the case.

Well, last Wednesday, January 18th, Holmes tossed out the case against the last two remaining defendants and dismissed the case "with prejudice." The documents are available online HERE (Most Worshipful Grand Lodge of Free and Accepted Masons of the State of Arkansas v. DCG/UGOC Equity Fund LLC et al) if you have a PacerMonitor subscription (they offer a free trial for 14 days, but be careful, as you could get charged $49 for the next month if you miss the email). Noteworthy across all of the judge's decisions is the repeated use of the phrase, "the Lodge has failed to carry its burden to show..."

(UPDATED LINKS to the pertinent documents: October 19, 2016 decision; and the January 2017 Decision)

Arkansas Masons have been asking whether the complete legal costs accrued by this Quixotic quest through the court system will be duly reported at next month's Annual Communication.

Large institutional organizations have problems from time to time. Any well-meaning one can make a poor investment through no fault of its own, and there's often nothing more damning about such an error or stroke of bad timing than, at most, maybe credulousness or bad judgement by an officer or two, who simply were out of their depth in the matter. The best of organizations are up front with their stockholders or members, promise to do better or change leadership, and get back to work. But Arkansas continues to rack up problem after problem, and they can't be hidden from their own members any longer. The practice of ejecting every single member who makes a critical observation out loud has taken on epidemic proportions: 23 expelled so far this year, and it's not quite the end of the term yet.

The question now arising is, will February's gathering in Little Rock erupt in a massive outburst of revolutionary anger, disgust, and exasperation? Or will some calming PGM or other admired Arkansas Mason emerge who rallies members to some noble cause and gathers their immediate approbation? Or will the assembled brethren simply sit quietly and watch it all unfold in emotional resignation - only to stop themselves at years' end when it comes time to write their dues check, and consign their notices to their shredders?

UPDATE 1/30/2017: 

According to court documents filed by the Grand Lodge in the lawsuit against the Equity Fund investment company, half of their $500,000 loss came out of their Perpetual Membership investment fund. As a result, the loss of investment income will be felt by every lodge under the Grand Lodge of Arkansas in the reduction of payouts from lifetime memberships.

To recap the entire Arkansas saga, here are the pertinent links:


  1. Just to be clear, dismissing an action with prejudice means only that the doctrine of claim preclusion/res judicata will apply and, hence, that, if re-filed, the same claim between the same parties whose previous litigation had a full and fair opportunity for hearing and resulted in a final judgment, will be dismissed outright on claim preclusion/res judicata grounds. It does not mean that the court was literally prejudicial or angry when it made its ruling. I just wanted to clarify that, because I assumed from the use of quotation marks that you did not happen to know what the legal term of art meant. Incidentally, thanks for all you do. This is my favorite Masonic blog on the web.

    Barlow Holley
    Mt. Gerizim Lodge No. 54
    Bastrop, Louisiana

  2. http://law.justia.com/cases/federal/district-courts/arkansas/aredce/4:2015cv00219/99846/100/

    This website provides the entire opinion written by Justice Holmes

  3. Where did these lost 500k investment funds come from? Did any part of the money come from the ARGL perpetual fund account? Last if ARGL tax identification is listed as a none profit organization is it even legal to invest in hopes to gain money from your investment?

    Just some thoughts possibly someone could answer. Thanks

    1. The following link shows exactly where all the funds came from. It is 164 pages long; however, if you look on pages 123-125, 136-139, 149-151, and 162-164 you can see exactly what accounts Mr. Jackson and Mr. Weatherall used to fund this poor investment. https://www.unitedstatescourts.org/federal/ared/99846/1-0.html

      Also, you can look at the group that the GL invested in on this website:http://www.secinfo.com/dRaBu.p47.htm

      Arkansas by-laws require the Board of Finance to invest in interest bearing securities. They invested $500,00.00 into DCG/UGOC Equity Fund, LLC. DCG/UGOC was to take this investment and build dorm rooms or housing facilities for colleges. All buildings have been foreclosed.
      So, let us get some background of this Investment. DCG/UGOC was organized or incorporated in 2008. They are a pooled investment fund with a subgrouping of private equity fund. However, they are not registered as an investment company under the Investment Company Act of 1940. In their filings, they decided to decline to disclose their revenue range. The type of securities offered are pooled investment fund interests They list their minimum investment as $15,000.00; however, the paperwork signed by the Grand Lodge of Arkansas states that the minimum investment must be $500,000.00. (Something is not adding up at this point.)
      DCG/UGOC filed their paperwork on 05/16/2012 in which they reported offerings of $20,000,000.00. They had sold $14,418,000.00. Now, this is not so bad since the organization has been open for, at this time, 4 years. However, they filed an amendment to their offerings and sales. They amended this report to read the offerings are $30,000,000.00, and they had sold $8,277,050.00. Now, this is a big difference. Being open for 4 years and only selling $8Million. Speaking with my investment agency, I was advised that this would not be a wise investment because at the time of this filing they had NOT sold all their placements and had been open for over 4 years.
      Now, if my investment agency can tell me that information, why would the Grand Lodge's investment group, who they are paying over $40,000.00 annually, could not tell them the same thing? My investment agency also stated that it is not out of the realm for some private equity groups to pay interest or dividends; however, this one has not.

  4. There is a facebook page that purports to show the source, as well as signatures from the folks who invested. The guy may be a rabble rouser, but he seems to have some pretty good sources of information. Judge for yourself. https://www.facebook.com/Arkansasgrandlodgespoof/

    I'm beginning to think Billy Joe doesn't love the rest of us any more than the 23 brothers he has already suspended. My heart is broken.

  5. Masonic investments and real estate are generally a story of poor judgement and rather large fees for advice and management. This is all public record as the irs forms are available online and offered in easily readable form by a watchdog called Guidestar. A case in point is the extraordinary amount the Supreme Council Southern Jurisdiction officers pay themselves out of charity funds.


Comments will not appear immediately, so be patient. I am forced to laboriously screen every post because I am constantly bombarded with spam. Anonymous postings on Masonic topics have the same status as cowans and eavesdroppers as far as I am concerned. If you post with an unknown or anonymous account, do not expect to see your comment appear.