Checkout the details on the fraud claims below:
The dust up that roiled Pasadena First AME Church’s membership last year has led to an audit of the church’s finances by a membership committee, the findings of which have moved some angry members to draft a lawsuit alleging fraud on the part of their pastor and the church’s trustees and stewards.
In January, we reported the rancor that erupted among the church membership when it perceived something was extremely amiss with the $6 million endowment bequeathed to the church upon the 2007 death of 85-year-old parishioner Vertus Hardiman, who left specific instructions on exactly how his endowment was to be used for the benefit of the crumbling 125-year-old church he loved so much.
Two years after Hardiman died and his trust was created, the Rev. Allen L. Williams was appointed pastor of the Pasadena FAME and the members started leaving in droves. Those who remained started grumbling about the unexplained and blatant extravagances they saw around them — such as the cash purchase of a $1.17 million parsonage in Sierra Madre, which is far removed from the predominantly African-American community the church serves and despite the fact that the church already owned a paid-off parsonage in the neighborhood.
They began questioning Williams about the source of these riches and whether he was raiding the Hardiman Fund. In essence, he told them it was none of their business and said they had no right to question him.
Then on Dec. 13, 2012, Williams held a meeting with the members and told them he wanted to take $56,000 from the Hardiman Fund to pay the church’s back taxes — taxes that had not been paid since Williams’ arrival. The members voted “no” and rose up and demanded an outside audit of the Hardiman Fund.
Well, a committee of four church leaders was appointed which set about conducting an audit of the church’s entire financial operation, going far beyond the issues surrounding the Hardiman Trust and uncovered financial doings that reek of fire and brimstone. The committee did its work and submitted a thorough and scathing 12-page report of its findings to Williams and the stewards and trustee boards on May 12, which the general membership has just received and to which it is just now reacting.
The Audit Committee examined only documents for year 2012 that included payroll records, credit card charges, bank account reconciliations, the Hardiman Fund Restricted Account bank statements and various summary report transactions, a list of all authorized check signers and credit card users and samples of various “accounts payable” vendor payments and supporting documentation.
The Audit Committee listed 18 “areas of concern” in its report, including “numerous transfers from a restricted bank account to the operating account indicating a cash flow problem primarily with the central checking and payroll accounts.”
The committee wrote that it requested copies of all steward board meetings for the year so it could find out what were the approved salary, benefits and other payment obligations for the pastor.
“The committee believes a lack of written supporting documentation detailing a salary package is unacceptable and should be changed,” the report states.
The audit report details page after page of financial weirdness, including such things as the notation that a couple of church employees were paid a regular salary, plus overtime and some non-taxable “other reimbursements,” for which the auditors could get no clear explanation. They did write that, however, the “the attached summary shows this increased payroll cost for the year totaled $19,309.”
Other oddities noted by the committee were that Christmas gifts to the staff totaled $4,575, with $1,000 going to one employee; that someone (or people) are making unauthorized online bank transfers and that the church paid thousands of dollars in finance charges and late fees last year to Exxon, Office Depot and Visa charge cards. They paid Office Depot $16,369 for the purchase of such things as tablets, Kindle Readers and a laptop computer and their users and whereabouts are unknown.
“The committee found a second fraud affidavit dated March 9, 2012 from Office Depot requesting information to complete an alleged fraud activity on our account. This affidavit was never completed and we were unable to determine if the original request was ever submitted,” the report states.
The committee wrote that it was unable to verify valid sampling of certain charges listed on a Visa credit card statement, including a charge of $1,409 from Rusnak Benz Auto Service in Arcadia.
The committee said it found the church had paid the bills for six different telephones, all within the 510 area code. My research of telephone numbers finds that all six of those phones are in the Oakland area, including the one assigned to the pastor’s phone; the other five? Who knows? Likewise, the church made utility payments to the East Bay Municipal Utility District and the Pacific Gas & Electric Co.
“The committee was unable to determine why these expenses were a church expense,” the committee wrote.
The audit report goes on like that, but ends with a detailed blueprint for the creation of a badly needed internal controls system at the church.
After receiving this report, about a dozen angry men of the church held a meeting and decided to sue somebody — or in this case — sue everybody. They have already drafted a lawsuit against Williams and the stewards and trustees for breach of fiduciary duty, fraud, misrepresentation, concealment, and conversion and they plan to seek declaratory relief, accounting, a permanent injunction and the appointment of a receiver for the church.
“The stewards and trustees need to do their job or get out of the way,” one of the enraged suing men said. Another one said, “I’m hoping that someone on the trustee or steward board will step up and end this criminal activity before we have to bring the law in here.”
I asked Joanne Wormly, head of the Trustee Board, what the board plans to do about the audit report and she said: “Why are you calling me? I don’t have anything to say.”
I then asked the same of Kaschen Hazelton-Venerable, a steward whom I’m told is the church administrator, for her reaction to the audit report.
She said: “You must call the church and make an appointment to come in and talk about it.” Uh Huh.
I was unsuccessful in reaching three other trustees and stewards and, as usual, Williams did not return my calls for comment.
