Christian University at the Center of Federal Trafficking and Fraud Probe

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A sign near the gated entrance to Olivet University in Dover, New York. JOSH KEEFE/NEWSWEEK

Olivet University, a Christian college with ties to a co-owner of Newsweek, is under investigation again, just two years after it was fined in a money laundering case, federal and local officials said.

The new probe, conducted by the federal government, is also investigating money laundering in addition to human and labor trafficking and visa fraud, a former senior official of the Department of Homeland Security (DHS) told Newsweek. The former official, who was briefed on the investigation, characterized it as "complex and significant."

Agents from Homeland Security Investigations, the principal investigative arm of DHS, searched Olivet's campus in Anza, California, a year ago along with police from Riverside County, officials said.

Newsweek confirmed the details in this story with seven current and former federal and local officials with knowledge of the Olivet case. In discussing the open investigation, most of the officials spoke to Newsweek on condition of anonymity; they were not authorized to speak to the media.

"A joint investigation by a local sheriff's office and HSI, given HSI's typical mandate, could suggest that such an investigation concerns matters beyond white collar financial crimes," Preston Burton, a former federal prosecutor and defense attorney who is not connected to the case, told Newsweek.

Olivet, a little-known Christian university founded by Korean-American cleric David Jang, was thrust into the national media spotlight in 2018 when the Manhattan District Attorney charged it in a fraud and money laundering scheme. Olivet pled guilty to several charges and paid a $1.25 million fine. Tracy Davis, the president of Olivet University at the time of the guilty plea, was recently Dean for Academic Affairs. Her husband Johnathan Davis owns 50 percent of Newsweek.

Newsweek's CEO and President, Dev Pragad, who owns the other 50 percent, says he has left Jang's Christian sect, the World Olivet Assembly, and has no ties to Olivet University. Johnathan Davis is also CEO of IBT Media, which was Newsweek's corporate parent until 2018.

"The investigation included the principals of Olivet and their other corporate entities including IBT," the former DHS official said.

When asked whether Newsweek was a subject of the investigation, officials said the probe was focused on Olivet.

At least four federal and local agencies are investigating Olivet University, the officials said. Homeland Security Investigations confirmed to Newsweek that the search warrant was executed on the school's Anza campus on April 21, 2021.

Federal agents who raided the campus in Southern California's "High Desert" region, about 90 miles northeast of San Diego, were looking for any evidence of "force, fraud, or coercion" in relation to international students who were primarily from China or South Korea, according to the former senior DHS official who was briefed on the case.

The former official, who retired from DHS after the search warrant was executed, told Newsweek that agents were investigating whether Olivet sponsored U.S. visas for foreign students, mostly from China, who then spent most of their time in the United States working rather than studying and who were paid well below minimum wage. The officials did not say what kind of work the students were suspected of doing.

"The remoteness of the campus I think made it very impractical for people to leave," the former DHS official said, recalling at least one person who managed "to escape."

Sergeant ­­­Brandi Swan of the Riverside County Sheriff's Department said the Sheriff's Department had assisted the Riverside County District Attorney's Office and HSI with the investigation on the date of the raid. A U.S. Labor Department official was on the premises during the raid, the former DHS senior official said. Asked about its role in the investigation, the Department of Labor offered no comment beyond pointing Newsweek to sections of its website that explain workers' rights under the Fair Labor Standards Act.

IBT—along with Olivet, religious publisher Christian Media and leasing company Oikos—pleaded guilty to fraud charges brought by the Manhattan DA. Previous Newsweek reporting disclosed that each of those entities was run by members of David Jang's sect and several of them pleaded guilty; Jang himself was not charged in the 2018 probe.

Johnathan Davis accused Newsweek of reporting on the new probe because of an ownership dispute with Pragad. "You should be aware that your CEO Dev Pragad is attempting to leverage the newsroom and yourselves for his personal advantage in a corporate shareholder dispute. He has said publicly and privately said that he wants my shares and full control of the company.

"To further those aims, he has threatened multiple times to use the Newsweek newsroom to mischaracterize our relationship with Olivet University, including the topic of your article....

"The reality is that our relationship with Olivet University has been long-standing, mutually beneficial."

Johnathan Davis shared what he said were screenshots of messages which he characterized as threats by Pragad to use the newsroom in any battle with Olivet. Newsweek was unable to verify those messages.

"Finally, you say in your question that 'IBT Media is under investigation again'—however, you should be aware that your own CEO [Pragad] is the target, not me," Davis said.

Pragad did not respond to requests for comment on this story.

"Dev Pragad is not a target of any federal investigation," a Newsweek spokesperson said. The spokesperson said Newsweek had not been contacted by authorities about the investigation, nor informed of it by Johnathan Davis or any other entities.

"The Newsweek company has been independent from the Olivet organization since the separation from IBT Media. Johnathan Davis has had no role in the management of Newsweek after the split," the spokesperson said. "Any association Davis and his wife have maintained with Olivet is their personal matter."

Tracy Davis and Johnathan Davis
Former Olivet University President Tracy Davis and her husband, Newsweek co-owner Johnathan Davis. Hudson E. Tsuei

Olivet emailed a statement to Newsweek saying, "The DHS visit was based on misinformation. In fact, the raid ended with agents apologizing. The money laundering charges and all felony charges have been dismissed and the case is fully resolved as a misdemeanor matter."

Olivet also said that Tracy Davis was Academic Dean until November 2021 and "currently holds no role in the university."

Tracy Davis and Olivet President Matthias Gebhardt did not respond to requests for comment made via their Olivet emails and LinkedIn messages. Emails and calls to IBT Media and Olivet University corporate telephone lines and email addresses went unanswered.

David Jang did not respond to requests for comment via his website and via the World Olivet Assembly. Mark Spisak, Executive Director of the World Olivet Assembly, did not answer calls to his mobile phone or to a text message.

Pragad was working to protect the company from interference from members of Jang's sect, he said in an April 7th memo to all Newsweek staff, later posted on the company website.

"I know there were concerns several years ago about possible interference in Newsweek by members of the Olivet church," Pragad wrote. "I can tell you that since we became an independent company in late 2018, the newsroom has been absolutely free from any influence by Olivet leaders and I'm no longer a member of or associated with the Olivet church."

Pragad's memo referred to a crisis that rocked Newsweek during the Manhattan District Attorney's investigation of Olivet. In January 2018 the DA searched the premises of Newsweek as part of a money-laundering investigation. Newsweek journalists reported on the investigation until Davis fired Newsweek's editor and other journalists involved in reporting a story about business dealings between IBT Media and Olivet.

Newsweek eventually published the story under its current editor in chief, Nancy Cooper, with a lengthy editor's note detailing efforts of Olivet members and their allies to subvert its reporting. IBT Media, along with co-founder Etienne Uzac, eventually pled guilty to criminal charges. Pragad, who was CEO at the time of the DA raid, bought Uzac's 50 percent stake in Newsweek as part of a corporate restructuring that separated the magazine publisher from IBT Media.

EDITOR'S NOTE:

Newsweek is dedicated to thorough and fair reporting in our coverage of the company. Neither of Newsweek's co-owners played a role in editing this story. They were asked for comment along with other individuals and institutions referred to in our reporting and did not see the story before publication. Kelly McBride of the Poynter Institute, Newsweek's editorial adviser, offered guidance on our coverage, and the lawyer who reviewed the story acted independently of Newsweek's corporate counsel. The newsroom has a history of independent reporting on the company.

Nancy Cooper

Global Editor in Chief

Here is some of our previous coverage.

Newsweek Raided by Manhattan DA in Long-running Probe

DA Investigators Look for 'Newsweek Servers' At Bible College With Ties to Magazine's Owners

Why Is the Manhattan DA Looking at Newsweek's Ties to a Christian University?

Newsweek Media Chairman and Finance Director Step Down

Christian Group with Ties to Newsweek Denies Role in Financial Probe

Fraud Charges Filed Against Newsweek's Former Parent Company

Former IBT Media Head Pleads Guilty in Fraud Case