African Methodist Episcopal Church alleges former leader embezzled millions

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The African Methodist Episcopal Church has sued a former leader who oversaw his pension scheme’s investment portfolio, accusing him and others of embezzling money and defrauding his clergy and ministers who relied on his scheme pension for their retirement.

The action follows the filing of class action lawsuits alleging the church mismanaged pension funds, with missing one claiming at least $90 million. The denomination, in turn, alleges that Reverend Jerome V. Harris and others are to blame for tens of millions of dollars of financial mismanagement.

The lawsuit was filed in the U.S. District Court in Memphis, home of the AME Church Retirement Service, which serves about 5,000 clergy and church employees.

In its filing Wednesday, the AME Church told the court that it discovered in September that Harris “engaged in a conspiracy with multiple individuals and/or entities to embezzle funds and defraud AMEC, among other things, by providing to AMEC misleading, false information and grossly inflated financial statements for the African Methodist Episcopal Church Ministerial Retirement Annuity Plan.

Harris served as executive director of the Department of Retirement Services for 21 years, elected to a four-year term from 2000 to 2016. He was replaced last year by James Miller, who briefed annuity plan participants in September that distributions from the plan would be halted while a forensic audit was conducted.

After an independent investigation, the denomination concluded that Harris and other defendants were using church retirement money for personal gain. Harris is accused of depositing funds from the plan into his personal checking account.

Harris could not immediately be reached for comment.

The court filing responded to the class action lawsuit filed in March against the AME Church by the Reverend Pearce Ewing, a longtime minister who retired in 2021.

The denomination “denies any wrongdoing or wrongdoing.” She also denied acting negligently or breaching her fiduciary duties.

“This financial crime has been committed against the AME Church community, and in particular our clergy and Church employees,” Bishop Anne Henning Byfield, chairperson of the AME Church Council of Bishops, said in a statement. communicated. “With the help of our legal team, the AMEC community is committed to holding those responsible accountable and recovering misappropriated funds.”

Based on the investigation, the denomination said it learned that Harris and other parties had created entities through which they had diverted funds from the annuity plan. The diversions, according to the AME Church, were for illegal activities, such as high-risk investments and payments to other people and to Harris.

The church also alleges that Harris and others used the plan money for loans, some of which have not been repaid. He cited a $2.5 million loan to purchase five lots in Key Marco, Florida, properties worth less than half the loan amount.

Other defendants include Symetra, a financial services company, and private equity funds such as Motorskill Venture Group, in which the church said Harris invested about $37 million in annuity plan funds without the necessary approvals.

The church said its retirement plan included $49.5 million in investments when it opened with Symetra around December 2001.

In his final report to AME Church, Harris said the plan was valued at $128 million. The church said it has since learned that this latest assessment is “an unsubstantiated representation made in a reckless and misleading manner to schedule attendees without any third-party verification.”

Harris, he said, called the fund’s transactions “cautious” and “conservative.”

Accounting firm Rodney Brown and Co., another defendant in the court filing, has performed audits for the department for 15 years. Mirroring Harris’ report, he certified in 2020 and 2021 that the annuity plan contained $128 million in funds. The investigation, the church said, showed that assessment to be “misleading, false and grossly inflated”.

The AME Church says it intends to return “the entire initial investment plus interest” to each participant in the retirement annuity plan.

It states that all of Ewing’s losses were the result of actions of third parties and/or “church employees who acted outside the scope of their employment.”

In addition to the lawsuit, the church said Harris and others are being investigated by law enforcement.

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