She donated nearly $300,000 to Church of Scientology, which doesn’t want it

The Church of Scientology is shunning a $278,158 donation because of concerns it might have been "ill-gotten" and "misappropriated."
[DOUGLAS R. CLIFFORD
 | Times, 2015]
The Church of Scientology is shunning a $278,158 donation because of concerns it might have been "ill-gotten" and "misappropriated." [DOUGLAS R. CLIFFORD | Times, 2015]
Published January 5 2018
Updated January 5 2018

On her Cozy Cottages website, Olga Favrow called herself one of the "leading authorities on real estate" in Tampa Bay.

"You’ve come to the right place!’’ the site said. "Learn how to earn 12 to 15 percent on your investment!"

The pitch proved enticing: Investors from New York, California and Florida gave Favrow’s Clearwater-based firm hundreds of thousands of dollars to buy, rehab and resell homes at a profit. But they say they never go their money back.

In the meantime, Favrow donated $278,158 to the Church of Scientology.

Did Favrow use her investors’ funds to make those donations? The investors don’t allege that directly but in an unusual case, the church says it doesn’t want the money because of concerns it might have been "ill-gotten" and "misappropriated."

The church, which has its spiritual headquarters in Clearwater, has put the $278,158 in escrow and filed a lawsuit in Pinellas County Circuit Court asking to be relieved from "any further responsibility’’ for the funds while Favrow and the investors battle it out among themselves over who is legally entitled to it.

Favrow, 70, did not return calls and an email seeking comment.

In 2008, as the market slumped, Favrow started Cozy Cottages, Inc. and began offering a variety of real estate services that included helping people sell homes facing foreclosure. Favrow, who has never had a Florida real estate license, also pitched to buyers "looking for a great deal’’ and investors "seeking a great return."

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In separate lawsuits filed against Favrow and Cozy Cottages, three investors are demanding their money back.

Michelle D. McDonald, who lives in California, said that in 2014 she wired Favrow a total of $613,000 "for the purpose of real estate investments and/or a profitable return" on her money.

Under their agreement, Cozy Cottages was to pay McDonald 19.2 percent interest — $112,000 — on the loan, which was to be paid back in full within a year. But as of July 2016, when she filed suit, McDonald said she was still owed $573,616.

"It is believed that the defendants did not invest in real estate at all, but instead used the funds for personal gain," the suit says.

In her suit filed last year, Victoria Rong Kennedy of New York said she learned about Cozy Cottages from a teacher in a real estate school she attended. Kennedy called Favrow, who said that her money would be pooled with that of other investors to buy homes in Florida that would produce "positive monthly cash flow," the suit says.

Kennedy invested a total of $86,500 in 2014 but never got the money back nor thousands of dollars in interest she was promised, according to the suit.

Kennedy also alleges that Favrow borrowed against a small house she owned in Tampa. Kennedy learned of it only after the home was sold and she received a closing statement that showed the payoff of a $16,395 mortgage.

"This loan was used by Favrow to pay other investors and/or other expenses not related to (Kennedy’s) property," the suit says.

A third investor, Jennifer Pena, alleges in a suit filed in March that Favrow owes her $60,000. "Although representing to the contrary, defendants never intended to act as (Pena’s) investment partner in purchasing, remodeling, repairing and re-selling homes," the suit says.

Pena and McDonald could not be reached, and Kennedy declined to comment. The three women are among 12 investors listed in the Church of Scientology’s own legal action over the disputed funds.

In its lawsuit, the church says Favrow made "various donations" totaling $278,158 to the Church of Scientology Flag Service Organization and to a church-related trust between 2011 and 2016.

"Upon information and belief, Olga Favrow obtained the donated money from potential investors," the suit says. In response to question from a reporter, the church also issued this statement:

"Once the Church became aware of Ms. Favrow’s actions and the fact that funds she had donated to the Church may have been misappropriated by her, the Church took the responsible action and asked the Court to determine the appropriate distribution of those funds. Because there is no way to determine which, if any, of her donations may have been ill-gotten, the Church has turned over all donations it received from Ms. Favrow...and decided to take this step so that anyone harmed by Ms. Favrow’s actions could be recompensed fairly through the Court.’’

Record show that Cozy Cottages has been inactive since September. However, the company and Favrow still face a foreclosure case brought by a lender that says Cozy Cottages defaulted on a $136,000 mortgage.

Also named as defendants in the foreclosure suit: some of Favrow’s investors.

Contact Susan Taylor Martin at smartin@tampabay.com or (727) 893-8642. Follow @susanskate.

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