Member of secretive church gets probation in benefits scheme

Raleigh, North Carolina — A member of a secretive North Carolina church received 10 months of home confinement for taking part in an unemployment fraud scheme benefiting businesses with ties to the congregation.

Diane McKinny, 66, of Rutherfordton, was sentenced by a federal judge in Asheville on Thursday, several months after she pleaded guilty to making a fraudulent claim for unemployment benefits for workers at a plastics manufacturing company run by a church leader. The sentence also includes three years of probation.

She was the fourth person to plead guilty and be sentenced in a probe of the scheme involving multiple businesses linked to Word of Faith Fellowship in Spindale.

Her employer Kent Covington, who was a Word of Faith minister, was sentenced earlier this year to 34 months in prison on a charge of conspiracy to commit mail fraud. Two others listed on a church website as ministers have been sentenced to probation after admitting fraud at a podiatry clinic.

Prosecutors have said Covington's Rutherford County business, Diverse Corporate Technologies, laid off employees in 2008 so they could collect unemployment benefits. But the employees continued to work at the company, with government money paying for their work and essentially giving the business free labor, according to court documents.

McKinny was the back-office manager who oversaw payroll and made false reports about their unemployment eligibility to the government, according to court documents.

A news release issued Thursday by prosecutors said that "at least five of the employees for whom McKinny made claims for (unemployment benefits) then continued to work at DCT on a full-time or near-full-time basis while collecting (benefits) every week."

Prosecutors added that "the codefendants obtained more than six months of free labor for DCT, paid for by the government, instead of by the business itself."

Covington used his position as a church leader to coerce employees, many of whom were members of the congregation, to comply, prosecutors have said. Prosecutors say in court documents that the workers themselves suffered because the unemployment benefits were less than the pay they had been receiving.

When other businesses run by Word of Faith members faced financial struggles in 2009 related to the Great Recession, Covington and McKinny shared how the scheme worked, "and several additional businesses implemented versions of the scheme," prosecutors said in the news release.

Prosecutors urged the judge to sentence McKinny to as many as two years in prison.

A defense attorney, however, argued for a lighter sentence, writing in a filing this month that: "She has no criminal record, is known for honesty, hard work, and service, and overcame significant odds to lead an active, meaningful, and purpose-filled life."

Her defense attorney, Amos Tyndall, didn't immediately respond to an email seeking further comment.

The sentencing follows a news investigation by The Associated Press that, beginning in 2017, documented claims of physical and emotional abuse at the church. AP also reported that authorities were looking into the unemployment claims of congregants and their businesses.

Former members have told AP that congregation leaders encouraged the schemes to help the businesses survive the economic downturn and keep money coming into the church.