Federal agents arrested seven key staff of the Tampa, Florida–based Greater Ministries International Church (GMIC) at their homes on March 12, accusing them of fraud, conspiracy, and money laundering in connection with the organization's purported double-your-money investment plan.

Since the early 1990s, the group's controversial "gifting ministry," based on Luke 6:38, had claimed the ability to double its donors' investments in 17 months from the profits of gold and diamond mines in Liberia and international trading in precious metals (CT, Jan. 11, 1999, p. 16). Tens of millions of dollars were invested by thousands of Christian "gifters" all over the country.

The program has been called a Ponzi scheme by state regulators and made the subject of cease-and- desist orders in three states. But in the past month, legal challenges to Greater Ministries became much more serious.

The first blow came March 1 when a Pennsylvania state judge imposed $6.4 million in fines.

Then came the arrests. Agents from the IRS, Secret Service, Post al Inspection, and other agencies all took part in the probe, which produced a 19-page indictment alleging 17 counts of conspiracy to commit wire and mail fraud, and numerous money laundering and other financial offenses.

Those arrested included Gerald Payne, 62, GMIC's pastor and leader; Payne's wife, Betty, 59, Greater's secretary; Don Hall, 57, missions director; David Whitfield, 46, financial director; Andrew John Krishak, 47, disbursements director; James Chambers, 66, a director; and Patrick Talbert, 50, former legal department head.

All except Talbert were still active in Greater Ministries' operations. Talbert left the church after being indicted in 1997 on state fraud charges. His trial on the state charges is pending.

READY TO FIGHT: In Pennsylvania, the massive fines were the outcome of a contempt of court action brought by state Attorney General Mike Fisher (CT, March 1, 1999, p. 21). Judge Eunice Ross ruled last fall that Greater's gifting pro gram was an unregistered investment plan, which violated the state's securities laws. She ordered Greater to cease solicitations for it in the state and refund any gifts made during the term of the injunction.

Ross imposed the fines after Gerald Payne filed an affidavit on February 24 stating that he would not comply with the refund order, because "to do so, I would have to deny my faith in God." State officials also presented evidence that solicitations had continued in the state, both by mail and at a November public meeting in Lebanon, Pennsylvania.

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GMIC supporters crammed into Ross's courtroom in Harrisburg, murmuring "amens" when Greater's attorney, Al Cunningham, asserted that the state's actions violated its constitutionally protected exercise of religious freedom.

Responding to a query from CT, GMIC issued a statement on March 4 declaring that "overall the hearing was very successful. Our position regarding the Lord ship of Jesus Christ was made very clear and established for the record. We are ready and willing to 'stand and fight' by taking this case all the way to the United States Supreme Court."

In Florida, law enforcement sources told CT that the federal investigation that produced the March 12 arrests went into high gear in 1997 after a state appeals court ruled that a revised version of Greater's gifting program was not a security and overturned a state cease-and-desist order against it.

The federal indictment charged that GMIC's gifting program is "a fraudulent investment scheme," which used the funds of later investors to repay earlier ones. At the arraignment, Assistant U.S. Attorney Robert Mosakowski said GMIC would be free to continue operating as a church; only the Ponzi scheme was being shut down.

The indictment also alleged that the directors of GMIC had secretly been paid a 5 percent commission on gifts they brought in, under the guise of "gas money." One of those charged, James Chambers, allegedly received more than $400,000 in such funds, representing at least $8 million in "gifts."

Last summer, Greater Ministries lost about $20 million when a Colorado bank in which it had large deposits failed. The ministry stopped making monthly payments to "gifters" in September, but its leaders claimed that profits from Liberian gold and diamond mines would soon enable it to resume payments and even surpass its earlier largess.

However, Greater's mining affiliate abandoned one diamond exploration operation for lack of prospects. Another project near the border had been "temporarily suspended" after it came under fire by guerrillas from Sierra Leone.

SEVERE PENALTIES POSSIBLE: All the defendants except Payne quickly went free after posting bail. Payne appeared at his arraignment wearing a clerical collar and shackles on his wrists and ankles.

After Payne's arrest, federal agents testified that he posed a risk because he often carries guns, he failed to disclose a conviction for perjury when he applied for a gun permit, he has access to multiple passports and bank accounts, and he has brought large amounts of cash and gold into the country. He was released on bail after five days in jail.

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The indictment alleged that last November, as part of the conspiracy, Payne had "authorized the purging of GMIC records relating to the fraudulent investment program."

If convicted on all counts, each defendant could face a prison term of up to 200 years and a fine of up to $5.75 million. The indictment also seeks the forfeiture of GMIC's assets, specifically a large hotel and conference center in Owensboro, Kentucky, that Greater bought in 1997. The indictment alleges that the ministry bought the hotel with fraudulent proceeds.

Gerald Payne faces three additional counts of seeking to avoid federal re porting requirements on cash bank transactions exceeding $10,000 by dividing the cash into smaller amounts. Such evasion, informally called "smurfing" by authorities, could mean an additional 15 years in prison and $750,000 more in fines for him.

A likely witness against the Greater officials is Jonathan Strawder, a former GMIC employee. Strawder pleaded guilty in December to state and federal fraud charges after the collapse of a spinoff Ponzi scheme that copied Greater's operation (CT, Feb. 8, 1999, p. 14). Strawder also agreed to cooperate with federal authorities.

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