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A pyramid scheme run by Greater Ministries International Church officials defrauded 18,853 people in several states.
By JEFF TESTERMAN
© St. Petersburg Times, published March 13, 2001
TAMPA -- Leaders of Greater Ministries International Church insisted they were following God's law in offering a faith-based investment program that promised to double parishioners' money in just 17 months.
But a jury decided Monday that five church officials violated federal laws with a pyramid scheme that took in $448-million from 1993 to 1999 and defrauded more than 18,000 people.
After 2 1/2 days of deliberations, the jury handed down guilty verdicts on 72 counts of conspiracy, wire fraud, money laundering and unlawful monetary transactions against Greater Ministries president Gerald Payne, 64, his wife, Betty Payne, 61, and church elders Patrick Henry Talbert, 52, Haywood Eudon Hall, 59, and David Whitfield, 48.
Jurors convicted four of the defendants on all counts against them. Hall was the only beneficiary of a split verdict, receiving acquittals on 11 of the 16 charges filed.
U.S. District Judge James D. Whittemore ordered the five defendants placed into custody until sentencing.
The five face maximum penalties ranging from 30 years in prison, for Hall, to 200 years behind bars and $6-million in fines for Gerald Payne.
Talbert already was serving a 10-year prison term because of a 1999 state conviction for swindling 11 elderly victims with bogus investment schemes in overseas used cars and discounted long-distance service.
"I'm glad to hear this," said Wayne Bayard, 57, a New Iberia, La., boat builder who put $48,500 into the Greater Ministries scheme. "People running these kinds of scams need to be put away.
"We were told our money would help evangelism and mission work," Bayard added. "We were told our money would be safe because the church had gold mines.
"Obviously, it was all a lie."
Bayard's name is one of 18,853 listed as creditors of Greater Ministries in U.S. Bankruptcy Court documents. The investors named say they are owed $190-million, yet the church claims assets of just $10-million, records show.
"Obviously, a lot of this money went offshore," Internal Revenue Service spokesman Dave Burris said Monday.
Burris called Greater Ministries' "Double Your Money Gift Exchange program" one of the largest Ponzi schemes ever investigated by the IRS.
In the seven-week trial, prosecutor Robert Mosakowski stacked up reams of bank records showing that payments to initial investors were made from funds forwarded by later waves of investors.
The investigation began in 1994 as IRS agents began looking at suspicious bank transactions -- $1.5-million in checks cashed by Gerald Payne, all in amounts under the $10,000 federal currency reporting requirement.
Payne and his followers asked church members for cash, told investors the "gifts" were tax deductible and promised huge returns from investments in overseas banks and African gold and diamond mines.
Part of the evidence shown jurors was a series of videotaped Greater Ministries meetings where elders discussed trying to keep secret an incentive program that paid 5 percent commissions on new investments.
The commissions, called "gas money," added up to $22.4-million for church elders, prosecutors said.
Defense attorneys presented their own videotapes, asking jurors why Greater Ministries leaders would have kept a record of meetings if they were involved in illegal acts.
The defense also said church members' actions were protected by the U.S. Constitution.
"This comes as a complete shock," said Gerald Payne's attorney, Ronald Smith, moments after the verdicts were announced. "The First Amendment was delivered a severe blow today."
"There was not a lot of evidence there," said Anne Borghetti, Betty Payne's attorney. "This was a very hard verdict for this jury. You could see that by the two ladies in the jury crying today."
Prosecutors said the Ponzi scheme collapsed in 1998, when Colorado regulators seized the Best Bank of Boulder, where the church had stashed $20-million in a checking account.
Complaints mounted as investors suddenly stopped receiving payments. California, Ohio, Pennsylvania and Alabama opened investigations into the church's finances.
A federal grand jury indicted the Greater Ministries officials in March 1999. In August of that year, just days after a federal judge in Tampa issued an injunction against the church's investment program, Greater Ministries sought protection from creditors under Chapter 11 of the U.S. Bankruptcy Act.
During the trial, none of the five defendants took the witness stand.
But jurors did hear from Gerald Payne's son, Michael Payne, who walked out of the church's headquarters at 715 Bird St. in Tampa in 1998 and agreed to cooperate with investigators for a grant of immunity.
Also testifying was former church elder John Krishak, who pleaded guilty to conspiracy and agreed to testify for the government.