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  • Pastor repaid bank to avoid fraud case

    By TIM ROCHE, DAVID BARSTOW and MONICA DAVEY

    ©St. Petersburg Times, published July 11, 1997


    ST. PETERSBURG -- Before he became leader of a national Baptist group, Henry J. Lyons spent a year in a pretrial intervention program and paid $85,000 in restitution after he was investigated for federal bank fraud.

    In 1991, the St. Petersburg minister managed to avoid a trial and public embarrassment by reaching the agreement with federal prosecutors to reimburse the former Citizens & Southern Bank.

    As a result, no court records show Lyons as a criminal defendant, but investigators and prosecutors said Thursday that he quietly completed the diversion program.

    This came during a period of financial distress for Lyons, who went on to be elected president of the National Baptist Convention USA Inc. and ultimately live a lavish lifestyle with an island home on Tierra Verde, a Rolls-Royce and three Mercedes Benzes.

    His opulent lifestyle was revealed this week after his wife, Deborah Lyons, was charged with burglary and arson when detectives said she tried to burn the Tierra Verde home her husband owns with another woman.

    The other woman, Bernice V. Edwards, is a convicted embezzler with her own history of financial trouble in Wisconsin and Florida.

    Lyons and Edwards face increasing scrutiny by law enforcement agencies as investigators closely follow news accounts and begin to look beyond Sunday's fire at the home.

    "We are gathering a lot of information," said Marianne Pasha, a spokeswoman for the Pinellas County sheriff. "We are reading a lot of this with a great deal of interest. It, of course, has raised some questions for us."

    Particularly interesting to them are real estate and luxury cars Lyons has acquired since becoming president of the national Baptist group. Until a few years ago, he was a minister who was rich with political connections but seemed to struggle with money:

    In March 1988, Barnett Bank of Pinellas County began foreclosure proceedings against a property the Lyonses owned at 902 Myakka Court NE in St. Petersburg. The Lyonses bought the parcel in 1984 with a $78,400 mortgage, but they stopped making the mortgage payments in October 1987, the bank alleged.

    The bank soon dropped the case. The Lyonses sold the property in 1995.

    In 1990, the IRS filed two tax liens against Lyons for failing to pay a total of $10,684 in federal taxes during 1988 and 1989. Both liens were satisfied by mid-1991.

    In 1989 and again in 1992, the city Codes Enforcement Division filed liens against Lyons for failing to pay fines for code violations at two rental properties. The 1989 liens, totaling $1,500 in fines on a property at 935 17th Ave. S, were released this year. The 1992 liens, totaling $7,800 in fines on a property at 2035 13th St. S, were released last year.

    During the late 1980s and early 1990s, friends said, Lyons seemed to have little money.

    "Hell, you couldn't get a check out of Lyons if you were Jesus Christ," said Ken Husted, 75, a retired insurance executive who was his financial adviser. "He didn't have it."

    In 1987, Lyons tried to raise enough money on behalf of the Florida General Baptist Convention to build a family center and drug treatment facility on land the church owned in Putnam County.

    Lyons needed a $5.5-million loan, but he had only $325,000 of equity in the raw land. Conventional banks turned down Lyons' applications for such a large loan.

    With the help of Husted and self-styled financial consultant Earlene Sutton, Lyons wanted to use a $39,500 investment to obtain a $50-million loan arranged by MidEast Investment Inc. in Tarpon Springs, according to the Florida Department of Law Enforcement.

    It turned out to be a scam, run by Jordanian national Tariq Nasrawi, who investigators say swindled more than $1-million from would-be investors.

    Part of the money Lyons lost in the deal belonged to other people, who had hoped to "ride piggyback on bigger deals," said Husted, who had been Lyons' financial adviser.

    Husted insisted that Lyons meant well and was swindled by a slick crook.

    "The guy got cheated out of some money, some of it his own, some of it other people's," Husted said.

    Lyons appeared "financially naive" in his management of finances belonging to the Florida Baptist group, said prosecutor Frank Migliore.

    The Jordanian man eventually was sentenced to 20 years in prison for racketeering and grand theft. But while the case was pending, FDLE agent Rick Hoover learned about an FBI investigation of Lyons, who had been accused with a female bank employee of fraud.

    "Our concern became the credibility of a witness in our state case," Hoover said. "We had to keep monitoring it to see what was happening with Lyons."

    The 1991 FBI investigation of Lyons ended with his acceptance into a pretrial diversion program run by the U.S. Attorney's Office in Tampa. He paid $85,000 in restitution to the bank and was discharged from the program a year later with no criminal record.

    Soon after, Lyons began to receive generous support from a variety of benefactors.

    In Milwaukee, Bernice Edwards introduced Lyons to Max Lehninger, 89.

    Before the 1994 Baptist convention election, Edwards urged Lehninger to lend her about $80,000. Some of it, she told him, would be used for Lyons' campaign.

    "She really wanted to get him into office," said Lehninger, who is not part of the Baptist convention, but said he had known and liked Edwards for 15 years. "She was a strong operator for Dr. Lyons."

    Lehninger, who is a Lutheran, went a step further, lending Lyons money too. Once, it was $20,000, he said. Another time, $40,000.

    "He said he needed it for the church," Lehninger said. "He paid it back and with interest."

    Edwards, court records show, did not promptly repay her loan. She is still making payments on it as part of a court agreement, Lehninger said. "She is a conniver and I was a chump," he said.

    Shortly after Lyons won the convention election in 1994, he met personally with Lehninger, going with Edwards to the man's north Milwaukee home.

    "I guess he figured he owed me that," Lehninger said.

    Edwards arranged the visit. Lehninger's wife, who has since died, was bedridden when Lyons arrived. Edwards, Lyons and Lehningers' ailing wife held hands at the bedside, as Lyons said a prayer.

    Another benefactor was Mary B. Strong. In 1996, the 76-year-old woman from Atlanta gave Lyons and Edwards a 1987 Rolls-Royce worth about $30,000.

    Later that year, Bernice Edwards showed up at Lokey Motor Co. in Clearwater looking to buy another luxury car, this one a $135,000 Mercedes Benz S 600V, the most expensive Mercedes on the market, said Tony Pineiro, the Lokey sales consultant who helped Edwards.

    "That is the flagship car," he said. "She came in to buy the car for him."

    He recalled that Edwards seemed unfazed by the price. "She wanted chrome wheels," he said. "Everything went through fine."

    While United Bank provided a $60,445 loan, Lyons and Edwards put down $74,500 in cash on the car. The payments were made this way: Edwards initially paid $1,000 with a personal check, followed by a $37,500 cashier's check in February of this year. On March 21, Edwards and Lyons took possession of the car after delivering a third check for $36,000.

    The receipt for that check was made out to the National Baptist Convention and Henry Lyons. The car, however, is registered to Bethel Metropolitan Baptist Church and Bernice Edwards. By registering the car to Bethel, the buyers avoided paying more than $9,000 in state sales taxes, records show.

    On Thursday, Pinellas-Pasco State Attorney Bernie McCabe said his office would be interested in examining the Mercedes purchase to see whether sales tax was improperly evaded.

    Lyons also has been involved in a variety of land dealings.

    In 1974, he and his wife bought an apartment complex on 17th Avenue S in St. Petersburg for $20,800 (which they got rid of in 1994). In 1981, he and his wife paid $18,900 for a property on 13th Street S (which they sold in 1996).

    The next year Lyons bought a small plot of land in Wakulla County for $4,200 (which he still owns).

    In 1986, Mr. and Mrs. Lyons moved into a $285,000 home on a canal at 4264 45th St. S, where they live today. Property records show the Lyonses satisfied their mortgage on this property in 1987.

    But by far, Henry Lyons' largest real estate transaction is his most recent, the purchase of a $700,000 home on Tierra Verde. Lyons obtained a $455,000 mortgage from the World Savings and Loan Association, a well-established financial institution.

    Lyons, who is the sole debtor on the mortgage, is listed as a "single man" on the note, dated March 1, 1996. The same day, Lyons executed a quit-claim deed giving Bernice Edwards half interest in the home. On the quit-claim deed, Lyons also is listed as an unmarried man.

    Professor Richard Gershon, who teaches property and estate law at the Stetson University College of Law, said this inaccuracy raises "an appearance of impropriety."

    "I just don't know why he would do it," Gershon said. "It just looks bad."

    Edwards did most of the negotiating with real estate agents leading up to the house purchase. She would fly into town and stay at the Don CeSar Beach Resort and Spa. The agents and the couple trying to sell the house said they believed that Lyons was a medical doctor with a family in Chicago. Edwards was his personal assistant who traveled a lot.

    "She said that she had all kinds of money. She said that she was an entertainer," said Jean Swanson, who owned the house then. "She loved the house. She kept saying, "Oh, this is my house.' "

    With breathtaking views of Boca Ciega Bay, the three-story house has two deep-water boat slips. In its nearly 10,000 square feet, it has four bedrooms, a library, a stone fireplace, a "conversation room" with a bar, a gourmet kitchen and a master suite with a build-in platform bed and a television that emerges from a cabinet with the push of a button.

    The house so far has raised the most questions about Lyons' personal finances. It's the house Deborah Lyons is accused of trying to burn after she saw a deed for the property in her husband's briefcase, sheriff's reports say.

    Lyons' newfound wealth has coincided with his rise to the leadership of the national convention. Little is known about his salary from his St. Petersburg church, Bethel Metropolitan Baptist. As president of the national convention he gets no salary but expenses are covered, some board members of the convention have said.

    However, Lyons has sources of income that go beyond the salary he makes as a St. Petersburg preacher. For example, Baptist congregations generally give their pastors a substantial cash gift each year to mark the anniversary of the ministers' service.

    Lyons' earning potential is greater than other preachers' because he is president of the national convention. A popular and sought-after speaker -- he sometimes shouts "I'm doing some preaching now!" -- he speaks regularly in Baptist churches around the nation. And wherever he goes, he gets money.

    How much?

    "I imagine he wouldn't get any less -- I'm just guessing -- than $1,000 plus expenses," said the Rev. J. J. Barfield, a Philadelphia pastor who serves on the National Baptist Convention USA board. "And it can go as high as the sky, according to who he's preaching for."
    -- Times staff writers Craig Pittman, Mike Wilson, Waveney Ann Moore, David Olinger, Sue Landry, Steve Nohlgren and Eric Eyre contributed to this report, as did researchers Carolyn Hardnett and Barbara Oliver.


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