2 Georgians accused of massive scam of churches

Atlanta Journal-Constitution/January 21, 2004
By Bill Rankin

It seemed like the answer to any congregation's prayers: a small investment in a Christian-based resort company with a guaranteed windfall that would help a church grow by leaps and bounds.

But federal prosecutors on Tuesday accused a North Georgia man, Abraham Kennard, of scamming more than 1,000 churches and hundreds of individuals in 41 states out of more than $8.7 million. Kennard, 45, of Wildwood promised predominantly African-American churches that they could make a $500,000 return on a $3,000 investment in his Nevada corporation that would build Christian resorts worldwide, prosecutors said.

Instead, Kennard ran a pyramid scheme and took the money mostly for himself, his girlfriend, members of his family and others, all the while enjoying a lavish lifestyle that included limousines, private jets and luxury cars, according to a federal indictment. Kennard pitched his scheme at religious conferences, through an Internet site, by telephone and by using a commissioned sales force, court documents allege.

"This was a widespread scheme intended to cheat churches," said U.S. Attorney Bill Duffey of Atlanta. "What was billed as money for God's work in the world was really a mechanism to fund a lifestyle of luxury limousines and private jets. . . . This is a disturbing scheme that preyed on the trusting members of the faith community."

Also charged in the 91-count indictment was Dalton lawyer R. Scott Cunningham. Cunningham, 52, is accused of using his attorney trust account to allow Kennard to funnel $3.4 million in proceeds from the scam back to Kennard, Cunningham and others.

Kennard could not be reached for comment Tuesday. His former lawyer, Mark Anthony Scott of Stone Mountain, said his client denied all wrongdoing in the case when the Securities and Exchange Commission filed suit against him in 2002.

Cunningham's lawyer, Don Samuel of Atlanta, said his client denies wrongdoing. "He has always completely opened up his books to the government," Samuel said, adding that Cunningham also has provided statements and testimony to SEC lawyers. "He unequivocally maintains his innocence."

After it filed its 2002 lawsuit against Kennard, SEC lawyers accused Kennard of victimizing 43 African-American churches in Georgia. Tuesday's federal indictment listed only one, Sword of the Word Evangelical Ministry in East Point. Attempts to reach church officials for comment Tuesday were unsuccessful.

Authorities would not name the other churches they said were defrauded.

The SEC lawsuit said that because of Kennard's promises, many churches committed to new building projects, undertook new debt and contracted with builders, expecting enormous windfalls that never materialized. According to the SEC complaint, Kennard was sentenced to three years in prison in 1986 for robbery and fraudulent check writing and has claimed to have a doctorate in divinity.

Kennard would identify prospective victims and offer them a chance to invest in a church funding project run by his Network International Investment Corp., the indictment said. Kennard then promised his "members" they would receive a forgivable loan or a non-refundable $500,000 grant for every $3,000 paid in fees, knowing full well that NIIC could not pay such a return, according to the indictment.

In May 2002, Kennard told prospective investors that groundbreaking had begun for NIIC's first resort, Harvest Time in Manchester, Tenn., and that there was $346 million in additional funding available, the federal indictment said, alleging that none of this was true.

Kennard and Cunningham are expected to make their first court appearances Thursday in Rome, where they were charged with the fraud scheme.