Accusations have flown back and forth between the parishioners and pastors of Jesus the Almighty God Church.

Trouble erupted at the church in 2010 after Norma and Edward Anderson discovered $120,000 they had placed in a church bank account had been completely withdrawn over an eight-month period.

The money had been deposited in the account by Mrs Anderson on the advice of her superannuation fund manager when the global financial crisis was dragging the savings backwards.

Concerned that the Andersons may make some unwise decisions with their retirement nest egg, the fund manager suggested Mrs Anderson give power of attorney to someone she trusted.

The authority was signed over to the senior pastor at Mrs Anderson's church, Janette de Guzman.

The mostly-Filipino church was run by Mrs de Guzman and her husband Timoteo with a small congregation between 2005 and 2009.

Mr de Guzman told the Sun the church had lent Mrs Anderson's money to other parishioners with her blessing.

He said the deal struck was for the money to be repaid with interest.

But the borrowers failed to repay their debts and the money was lost, Mr de Guzman said.

The Andersons dispute this and say the money was to be left in the church account to collect interest from the bank.

The Andersons filed a civil claim for the money and asked police to investigate Mr and Mrs de Guzman.

A Blacktown detective said an "extensive investigation" had found the power of attorney given to Janette de Guzman by Mrs Anderson made all the transactions within the law.

He said the matter seemed to be more a case of extreme naivety than criminal action.

But the Andersons pressed on with a civil claim in which Blacktown Local Court found Mrs de Guzman liable to repay half of the $120,000 plus $5000 in interest.

The pastor then filed for bankruptcy.

In November last year, Mrs Anderson received a creditors' disclosure statement notifying her that Mrs de Guzman had been declared bankrupt, owing $578, 735 to creditors.

The de Guzmans are now legally free from repaying their former parishioners.

But the messy affair continues: through a solicitor the Andersons have asked the Financial Ombudsman to investigate whether the de Guzmans own property in the Philippines that they did not disclose when they filed for bankruptcy.