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Deborah Lyons, Rev. Henry Lyons and daughter Vonda Lyons leave the federal courthouse in Tampa on Thursday afternoon.
[Times photo: Jim Stem]

Feds indict Lyons, women


© St. Petersburg Times, published July 3, 1998

TAMPA -- A year after the fire that started it all, a federal grand jury on Thursday indicted the Rev. Henry J. Lyons on 56 charges that could send one of the nation's most prominent African-American religious leaders to prison for two decades.

Lyons, the 56-year-old president of the National Baptist Convention USA Inc., surrendered himself to authorities, and then was led, hands cuffed behind his back, to a courtroom where a judge ticked off every allegation against him in the 74-page indictment.

"The message that we're sending is really to leaders who hold positions of trust or leaders of charitable or religious or civic organizations who have access to large sums of money," U.S. Attorney Charles Wilson said in announcing the indictment. "And the message that we're really sending is that we've got to hold them accountable for their actions."

A Ministry Questioned: more coverage from the pages of the St. Petersburg Times.
Also indicted Thursday were Bernice Edwards and Brenda Harris, two high-ranking associates who have been linked romantically to Lyons.

Edwards, the NBC's former public relations director, was charged with 25 charges while Harris, the NBC's meeting planner, was charged with eight offenses.

The indictment is remarkable for its scope: The list of crimes includes wire fraud, bank fraud, mail fraud, tax evasion, extortion, money laundering and conspiracy. The alleged victims include banks, corporations, government agencies, and groups dedicated to registering black voters and repairing burned African-American churches.

Wilson passionately rejected claims by some Lyons supporters that the indictment is another example of the government targeting prominent black leaders.

"I am convinced that the vast majority of black Baptists in this country are sickened and disgusted by the conduct that is alleged in this indictment and they are, in fact, today cheering the return of this indictment," said Wilson, who is black.

Wilson said he expects more indictments.

As Thursday's indictment was announced, federal authorities moved swiftly to seize millions of dollars in assets they allege were illegally obtained by Lyons, Edwards and Harris.

Prosecutors secured orders freezing 20 bank accounts. They seized jewelry and cars, and filed claims against the defendants' homes, including the $700,000 waterfront home on Tierra Verde that Lyons owns with Edwards.

Last July 6, investigators say, Lyons' wife of 25 years ransacked and set fire to the home because she suspected Lyons and Edwards were having an affair. The fire prompted state and federal investigations.

In a statement, Lyons' attorney Grady Irvin said Lyons will continue on as president of the National Baptist Convention USA Inc., and as pastor of his St. Petersburg church, Bethel Metropolitan.

"We look forward to a trial on the merits and Rev. Lyons' acquittal," Irvin said. "I hope the end result will be that the public will have a greater understanding of the inner workings of the black church in America and how many corporations target certain of its influential leaders for endorsements, both political and economic."

After Lyons' release on bond Thursday afternoon, he attended a Bible class at his church, Irvin said.

In five minutes, grand jury votes to indict

On Thursday morning, the mood was giddy outside the grand jury room on the fourth floor of the old Federal Courthouse in downtown Tampa

Ken Lawson, a youthful assistant U.S. attorney leading the federal case against Lyons, arrived early, jaunty and smiling, shaking hands with jurors.

"The big day, huh?" a juror said to Lawson.

For months, these jurors, all white, had gathered on Thursdays to hear testimony about the doings of Lyons, a man once so powerful that heads of state and America's CEOs sought his friendship.

Lawson's boss, U.S. Attorney Wilson, a man not known to be a headline hound, sent out a wave of news releases at 9 a.m., notifying reporters of a 12:30 p.m. media event: "Mr. Wilson will announce the return of the indictment: United States vs. Henry J. Lyons, Bernice V. Edwards, and Brenda D. Harris," the statement said.

Never mind that the grand jurors -- the ones who actually vote on who gets indicted -- hadn't yet convened. As it turned out, Wilson's prediction was on the mark. After spending about an hour reviewing the indictment with the grand jury, the prosecutors and the stenographer left the jury room to allow the jurors to vote on indictments in private.

It took the jurors all of five minutes.

About 11 a.m., the grand jury foreman emerged carrying an armload of the 74-page indictments.

Meanwhile, in a high-rise office building a few blocks away, top IRS, FBI and Justice Department officials were gathering for Wilson's news conference.

Flanked by charts outlining the charges, Wilson described what he called an "extremely comprehensive indictment."

The case, he said, is about trust betrayed.

"Lyons, Edwards and Harris are charged in this indictment," he said in a firm voice, "with using the National Baptist Convention as a vehicle to steal and extort millions of dollars from various corporations, organizations, and financial institutions."

And then, he charged, Lyons used the "proceeds of these frauds" to finance a "lavish lifestyle" of country club memberships, fancy cars, jewelry and "houses throughout the United States."

In part, the federal case mirrors the state charges brought against Lyons and Edwards in February, when Pinellas-Pasco State Attorney Bernie McCabe charged the two with racketeering.

As in the state case, the federal indictment alleges that Lyons and Edwards used fraud and extortion and false claims about the size of the NBC to steal millions of dollars from corporations seeking to market products to Baptists.

Like the state case, the federal indictment accuses Lyons of stealing more than $200,000 the Anti-Defamation League donated to repair burned churches. And as with the state case, the federal case does not allege that the NBC was a victim.

But what really distinguishes the federal case is that its scope exceeds the state charges.

Take the first count of the indictment, which accuses Lyons, Edwards and Harris of conspiracy. That one count lists 95 "overt acts" the three allegedly engaged in as part of their conspiracy: Creating secret slush funds. Money laundering. Scores of forgeries. Extortions. Frauds of dizzying variety. Victims galore, including six different banks, six corporations, the Anti-Defamation League, the U.S. Department of Housing and Urban Development, and even the military dictatorship of Nigeria.

That's count one of the indictment. Sixty more counts follow, many involving crimes not contemplated by the state charges.

Tax evasion is one example.

In 1995, Lyons reported that his taxable income was $7,585. His unreported income, according to the indictment: $199,006. In 1996, Lyons said his taxable income was $20,449. The indictment says he failed to report another $335,683 in income.

According to prosecutors, Lyons owes $534,689 in taxes from those two years.

Edwards, meanwhile, failed to file any tax returns for the same two years, though the indictment alleges she earned $513,237 during that time. Her tax bill: $194,447, prosecutors say.

Several of the specific allegations have never before surfaced in media accounts or the state investigation:

With $50,090 from one secret bank account, Lyons bought a 1995 Land Rover in Wisconsin. The car was bought in his name, but it was used by Edwards.

Lyons supplied nearly all of the $102,000 Brenda Harris used as a cash down payment on the $340,000 home she purchased in Nashville.

In 1996, Lyons stole $50,000 that was supposed to have been spent registering black voters. The money was supplied by the National Coalition on Black Voter Participation Inc. of Washington, D.C.

Bernice Edwards arrested at her Milwaukee home

* * *

As Wilson began his news conference, Henry Lyons arrived at the federal courthouse dressed in his trademark outfit, a dark suit and a National Baptist Convention lapel pin.

His attorney, Grady Irvin, beside him, Lyons said little to waiting reporters. In the basement, Irvin addressed a receptionist inside the U.S. Marshal's Office: "Yes, I'm surrendering Rev. Lyons."

In Nashville, meanwhile, Brenda Harris' attorneys learned their client was being indicted when a reporter called their offices. Then lawyers Nader Baydoun and Peter Strianse spoke with representatives from Wilson's office. Then they called Harris.

She was at the NBC headquarters, like most days, at work.

On Monday, Harris and her attorneys will fly to Tampa for an initial court appearance, Baydoun said. No time had been set for the hearing, but Baydoun said prosecutors have agreed to the plan. Harris was not required to appear in court sooner.

"We are making arrangements to come to Tampa and then we will began preparing a defense," said Baydoun. "We deny everything."

In Milwaukee, Bernice Edwards, who has a previous federal embezzling conviction, was not allowed as much leeway. Reached at her home in Milwaukee on Thursday morning, Edwards politely declined to comment on possible criminal charges.

By 11 a.m., Milwaukee time, a warrant had been issued for her arrest.

At 11:10 a.m., FBI agents were at her house. She was taken into custody without incident.

Edwards wore a skirt, a jacket decorated with bright flowers and handcuffs as two federal agents led her into a Milwaukee courtroom.

U.S. Magistrate William E. Callahan released Edwards on a $250,000 bond, secured by her $53,000 house. Edwards surrendered her passport and must check in every day with probation officials until she turns herself in to Florida officials next week.

Edwards "carries no credibility" with federal probation officials in Milwaukee because most of the crimes with which she is now charged were committed while she was on probation for her earlier conviction, Assistant U.S. Attorney Steven Biskupic told the court. (Biskupic also was Edwards' prosecutor in those earlier charges, four years ago.)

Federal officials also began seizing property Thursday.

In Milwaukee, agents took the 1995 Land Rover Country Classic, which Lyons bought but Edwards drove. They took four pieces of jewelry from her house, and $22,000 more in gems she had put up at local pawnshops in recent months.

In Wisconsin, Florida and Tennessee, officials plan to take more.

Federal prosecutors want to seize $1.8-million in cash that flowed from the alleged schemes. They want to seize property, including Lyons' family home in St. Petersburg, Harris' Nashville house and a time-share condominium Lyons and Edwards bought in Lake Tahoe. The prosecutors have frozen bank accounts, including several key NBC accounts.

Since the fire, Lyons has sold off some of the items he acquired with Edwards, including a $135,000 Mercedes-Benz. Prosecutors are going after the proceeds of those sales, as well.

And they want to seize 39 pieces of jewelry. Among the items: a 20-carat diamond ring, diamond cuff links, and a man's gold watch, cut with a diamond. In all, 14 diamonds made the list.

Lyons handcuffed as he is led into courtroom

By lottery, the case has been assigned to U.S. District Judge Henry Lee Adams Jr., the only African-American among Tampa's five federal district judges.

Adams is a native of Jacksonville and a former student teacher. He became Jacksonville's first black judge when he was appointed to the state bench in 1979. President Clinton nominated Adams for the federal bench in 1993.

In Adams' Tampa chambers, pictures of Martin Luther King Jr. and Malcolm X hang from the walls.

On Thursday afternoon, however, the first hearing in the case was presided over by U.S. Magistrate Thomas B. McCoun III.

Reporters and curious clerks and lawyers filled the benches of first floor courtroom.

In past court appearances, Lyons has arrived with an entourage of friends, parishioners and lawyers. He came Thursday with his wife, daughter and one lawyer. Two U.S. marshals also flanked him.

Lyons entered the first floor courtroom shortly after 2 p.m. Thursday with his hands handcuffed behind his back. The crowded room turned silent.

During a break, marshals allowed Lyons to move closer to his wife, Deborah, who stood at the rail near the defense table. So long as you don't touch, the marshal cautioned.

As McCoun began describing each count of the indictment, Lyons sat forward, looking directly at the judge. Every few words, Lyons nodded agreeably.

But as the number of counts drew into the 10s, then the 20s, the nodding stopped. Lyons hunched slightly. By 30, then 40, Lyons was motionless. The counts went on.

If convicted, Lyons could be sentenced under federal guidelines to 18 to 20 years in prison.

The full impact of the day's charges and frozen assets became clear when McCoun tried to set Lyons bond so he could go home for the July Fourth holiday.

Lawson, the prosecutor, argued that bond for Lyons should be set at $125,000 and secured by Lyons' assets. But Lyons' attorney, Grady Irvin, said Lyons had no assets left.

What about certificates of deposit, bank accounts, a salary, the judge inquired? Irvin said all Lyons had left was his promise to appear at every hearing.

The judge wanted more.

McCoun allowed Lyons to go free, but told him to return Monday with friends willing to co-sign for an $125,000 bond. "Dr. Lyons, the risk in this is not really to you. It's to your friends," McCoun said.
-- Information for this story also was supplied by the Milwaukee Journal Sentinel.

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