By WAVENEY ANN MOORE, DAVID BARSTOW and MONICA DAVEY
© St. Petersburg Times, published June 26, 1998
T. PETERSBURG -- Already facing state criminal charges, the Rev. Henry J. Lyons likely will be indicted within weeks on federal charges of tax evasion, bank fraud and money laundering, his attorney said Thursday.
"I think it's going to occur within the next two weeks," attorney Denis de Vlaming told reporters after a judge refused to dismiss state racketeering and grand theft charges against Lyons, president of the National Baptist Convention USA Inc.
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"They usually do that at the end," de Vlaming said.
Lyons declined the invitation to testify Thursday. "We see no useful purpose for him to address the grand jury," de Vlaming explained, noting that Lyons' testimony could be used against him in a trial. "We don't think at this point in time it's going to affect what the grand jury is going to do."
Nevertheless, the grand jury heard more testimony against Lyons on Thursday, this time from the two agents who have done much of the legwork in the federal investigation. FBI agent Neil V. Palenzuela and IRS agent James L. Cohen each testified for about 90 minutes.
De Vlaming said Lyons' defense team is trying to work out a deal with Wilson that would allow Lyons to turn himself in, should there be an indictment.
"There's been an offer to cooperate," de Vlaming said, adding that Wilson has not responded to the offer.
A spokesman for Wilson declined to comment about the case.
Beyond Lyons, others could face charges:
Brenda Harris, who coordinates meetings and travel for the convention, has emerged as a possible target. "It certainly would appear that way," said Nader Baydoun, Harris' Nashville attorney. Among those called before the grand jury in recent months, Baydoun said, were Harris' tax preparer and Harris' mother.
State prosecutors have described Harris as Lyons' "paramour," though Harris and Lyons have denied a romance. Prosecution records also show Harris and her travel agency receiving $456,264 from Lyons during his presidency.
Baydoun has acknowledged that Harris received gifts from Lyons, but he said most of the money was for "legitimate business purposes" in Harris' capacity as the convention's travel coordinator. "We are not aware of any wrongdoing on the part of Brenda Harris, and we believe that her taxes are accurate," he said.
Bernice Edwards, a former NBC public relations director who co-owns a $700,000 Tierra Verde home with Lyons, was charged along with Lyons in the state's racketeering case.
Federal prosecutors in Milwaukee, where Edwards lives, said Thursday that federal prosecutors in Tampa are "vigorously" investigating Edwards.
At Wilson's request, Milwaukee prosecutors delayed their own pursuit of Edwards for possible criminal violations, said Barbara Berman, the first assistant U.S. Attorney in Milwaukee.
"They assured us that they were looking into many matters," she said. "We are waiting to see what the federal prosecutor's office in Florida does."
Bill Jung, Edwards' attorney, declined comment Thursday.
Berlena Hudson, a longtime secretary at Lyons' church, also appears to be a focus of the federal investigation in Tampa. Hudson, linked to a forged document submitted to get government financing for a Lyons project, has been questioned and compelled to give handwriting samples by federal authorities.
Hudson has denied wrongdoing.
As momentum was building in the federal investigation, the state's case against Lyons and Edwards withstood the first serious challenge by Lyons' defense team.
In two hours of arguments before Pinellas-Pasco Chief Circuit Judge Susan F. Schaeffer, de Vlaming gave one reason after another why all the charges against Lyons should be thrown out: The legal document charging Lyons is defective; the charges are repetitive, or ambiguous, or too broad; and, finally, the charges violate the state and U.S. constitutions by infringing on Lyons' right to religious freedom.
The government, he said, has no business telling a religious group how to handle its finances or conduct its business affairs.
De Vlaming said he has searched legal journals and opinions and can't find a single case in which racketeering charges were applied to a church or religious organization. He warned that allowing such charges to stand would have a "chilling effect" on other religious groups.
But Assistant State Attorney Robert Lewis said the case has nothing to do with religious freedom. Yes, he said, the law grants absolute protection for religious beliefs, but religious conduct has limits.
"You can't commit crimes under the guise of religious freedom," he argued.
Schaeffer called de Vlaming's argument about religious freedom "interesting" but refused to dismiss any charges against Lyons or Edwards. She invited de Vlaming to revisit the religious freedom issue later in the case.
There were two other legal developments Thursday. First, Schaeffer said she will rule next Thursday on whether state prosecutors must make public thousands of pages of bank records seized during the Lyons investigation.
Several news organizations have asked to inspect the records, but defense lawyers say their release will violate the privacy rights of Lyons and others.
In the second development, Lyons' attorneys filed court papers saying polygraph tests clear Lyons of an allegation that he had a "sexual encounter" with Sharon E. Wilson, a member of his St. Petersburg church and an assistant principal at Walsingham Elementary School in Largo.
Lyons' former secretary, Lynda Shorter, told investigators she once came upon Wilson in Lyons' office, on her knees, her blouse and hair disheveled.
But polygraph examiner George Slattery, who was hired by Lyons' attorneys, said Lyons and Wilson are telling the truth when they deny having sex with each other. Slattery did not ask Lyons about his relations with several other women with whom he has been romantically linked.
Beyond the legal realm, indications were that Lyons' support within the convention may not be ironclad.
Hundreds of Baptists attending a meeting in Indianapolis late Wednesday walked out when Lyons was about to begin speaking.
Lyons was in the RCA Dome -- where the National Football League's Indianapolis Colts play their home games -- to kick off "Christ Alive," a campaign to spread the gospel across America.
The dome, however, was mostly empty, with only a few thousand Baptists in attendance. When the Rev. E.V. Hill, a prominent Los Angeles minister, finished a sermon, several hundred people streamed toward the exits.
"One moment. One moment please," someone said from the stage. "Don't do that. It's not over yet. You haven't heard the president. At least give him the respect. Let our president address us. Won't you have your seat for a moment?"
The people kept going.
When Lyons was introduced, he said, "Please don't leave." Few, if any, turned back.
Lyons pressed on, giving a brief address to those who remained.
-- Staff writer Mike Wilson contributed to this report.