Former AME Zion Church leaders charged with defrauding California churches
Two former leaders of the Zion African Methodist Episcopal Church in California are facing federal charges after authorities alleged they defrauded churches across the state out of $14 million.
According to the U.S. Attorney’s Office for the Northern District of California. Powell also faces one count of mail fraud.
Authorities allege the two took over properties from congregations and used them to obtain loans for themselves in a scheme that ran from around October 2016 to the end of July 2021, according to the report. indictment, which was filed on January 6 and unsealed on Tuesday.
Powell and Quintana served as officers of the Western Episcopal District Inc., which they formed in 2016 after Powell was selected to be bishop overseeing the church’s Western District, prosecutors said.
“The indictment alleges that Powell and Quintana conspired to defraud AME Zion Church congregations in Oakland, San Jose, Palo Alto, and Los Angeles by reassigning the properties of local congregations to WED Inc.”, prosecutors said.
Court documents describe the plot as a “campaign of pressure and misinformation targeting pastors who served at Powell’s whim.”
Prior to the Powell and Quintana actions, the congregations had little to no mortgage debt, prosecutors said. The couple used false statements, omitted information and falsified documents to fabricate evidence that local congregations accepted the new mortgages.
These mortgages often had unfavorable terms such as high interest rates, according to the indictment.
They “did not inform private lenders of the true facts, and they did not inform local congregations of new mortgages using local church properties as collateral,” prosecutors said.
Powell and Quintana used the proceeds from the high-interest loans for their own gain, according to the indictment. Powell purchased properties in North Carolina and paid off his existing mortgage debt there. Quintana’s wife received cash payments.
The program was canceled in 2019 after congregations began receiving notices that their church loans were in default, according to court documents.
Some church members filed complaints with AME Zion Church leaders, according to court documents. On January 4, 2019, church authorities told Powell to arrest and return all title deeds to their respective congregations.
The fraudulent scheme, however, continued.
“As of mid-2020, all hard money loans were in default and WED Inc. filed for Chapter 11 bankruptcy protection,” the indictment states.
The July 30, 2020 filing by WED listed 11 churches in California, Arizona and Colorado as its assets, prosecutors said. This case is pending in federal bankruptcy court.
AME Zion Church leaders voted to relieve Powell of financial and administrative duties on August 7 of that year, according to the indictment. He was “undressed” on July 29, 2021, officially stripping him of his title of bishop.