Jerry Falwell Jr. Reportedly Used Liberty University As CRE Investment Vehicle
The son of one of the most influential evangelists of the 20th century is embroiled in a scandal with real estate at its core.
Liberty University President Jerry Falwell Jr. has allegedly directed hundreds of millions of dollars to his associates and family through the academic institution's land, construction and property management deals, Politico reports.
The biggest alleged beneficiary is Falwell's family friend and longtime associate, Robert Moon.
At Falwell's direction, Liberty allegedly gave Moon a $750K loan in 2013 to form Construction Management Associates, a business devoted to projects on the nonprofit university's campus, Politico reports. Since its formation, Liberty has allegedly awarded over $130M in construction contracts to CMA, as well as sold campus land on multiple occasions.
After Liberty purchased a shopping center near campus, Falwell allegedly told the school's board that he was hiring a new company that his son, Trey, was founding to manage the property. Trey, born Jerry Falwell III, formed an LLC called JF Management less than a month after the date of his father's email to the Liberty board.
Near the shopping center in question stands a La Quinta Inn & Suites owned by a company called Comeback Inn, whose registered owner is a real estate manager for Liberty University, Politico reports. The site also reports that Trey Falwell is a silent minority partner in Comeback Inn.
Politico said its report was supported by claims and documents provided by current and former aides to Falwell and board members at Liberty University.
Falwell has since said he has begun sharing information with the FBI related to a "criminal conspiracy" by a group of former board members and employees to seize power from him, The Hill reports.
Falwell also alleges that by sharing internal memos and emails with reporters, the group illegally took Liberty property to smear his public image. He also denied any wrongdoing in response to the Politico article. Liberty University had not responded to a Bisnow request for comment as of press time.
Colleges and universities routinely invest endowment money in real estate, in order to raise funds or improve student life. Some schools, like Philadelphia's Drexel University, use their land or capital to invest in major commercial developments. Legal experts said Falwell may have run afoul of the law by allegedly using his nonprofit organization to enrich his family, Politico reports.