Evangelist Cerullo indicted in tax case

He faces three counts of filing false returns

San Diego Union-Tribune/July 13, 2005
By Greg Moran

Prominent San Diego evangelist Morris Cerullo was indicted by a federal grand jury yesterday on three counts of filing false individual income tax returns, which allegedly underreported his income by $550,000.

The indictment alleges that Cerullo, president of Morris Cerullo World Evangelism, filed false tax returns for 1998-2000.

The indictment alleges he underestimated his income by $290,000 for 1998, $110,000 for 1999, and $150,000 for 2000.

If convicted, he would face a maximum penalty of three years in prison and a $100,000 fine.

Cerullo is to surrender to authorities, perhaps as early as next week, Assistant U.S. Attorney George Hardy said.

Hardy declined to provide further details about the case, including the source of the income that Cerullo is alleged to have not reported.

Gregory Vega, the lawyer for the evangelist who has claimed his cable network is the second-largest of its kind in the world, said Cerullo will contest the charges. He said the ministry has been examined – and cleared – by the Internal Revenue Service.

"Dr. Cerullo looks forward to an opportunity to respond to the allegations in a court of law," Vega said. "And he is pleased that after three years of investigation by the IRS, nothing was found to be inappropriate in the operation of the ministry."

Cerullo has been involved in numerous real estate and business transactions in San Diego, in addition to his ministry operations. He purchased the El Cortez hotel in 1978, then sold it three years later, reportedly for more than twice what he paid.

In 1992, his ministry, which has headquarters in Kearny Mesa, gained control of the television network formerly controlled by disgraced evangelist Jim Bakker.

In 2000, Cerullo was sued by a former employee who, among other things, accused Cerullo of "unethical and fraudulent fundraising techniques." The suit was dismissed in 2002 by an appeals court, which ruled that the religious freedom clause of the U.S. Constitution barred courts from getting involved in the internal disputes of religious organizations, according to a summary of the case by the First Amendment Center, a research organization based at Vanderbilt University in Nashville, Tenn.