IRS probes ministry's gift program

Leaders of a Tampa-based ministry under federal investigation for running a possible Ponzi scheme have histories in scams.

The Tampa Tribune, August 16, 1999
By Michael Fechter

TAMPA - They decry a federal investigation into their church-based gift program, yet at least five Greater Ministries International officials have either criminal records or civil judgments involving scams.

Federal investigators, led by the Internal Revenue Service, are trying to determine whether the program ``Faith Promises'' is an elaborate Ponzi, or pyramid, scheme.

It is similar to other Ministries' programs that doubled a person's money inside 18 months.

``We give you double and triple and quadruple, depending on how much you give,'' Associate Pastor Don Hall told a southern Virginia audience in May.

Hall, who also is listed as coordinator of Greater Ministries International missions, often leads pitch sessions touting Faith Promises throughout the country. His comments were reported by the Harrisonburg Daily News-Record in Virginia.

The rationale is built on biblical verses in Luke, II Corinthians and Mark that say those who benefit the church receive benefits, too. Practically, Greater Ministries literature says it succeeds through a team of investors, inspired by God, delving into international markets and precious and semi-precious metals.

Among the Greater Ministries officials with histories in scams are:

-- Founder and President Gerald Payne, who served 39 days of a four-month sentence in jail for his 1979 conviction for lying to a grand jury in New York City. The grand jury was investigating bankruptcy fraud involving a Payne employer.

-- Patrick Henry Talbert, a minister who notarizes some Greater Ministries documents, has been sued twice in the past three years by people claiming he bilked them of their investments.

-- Norman Lower, who was Talbert's partner in something called DTA Trust, is a Greater Ministries volunteer. A Sebring couple won a default judgment for a 1996 suit that alleged Talbert and Lower bilked them out of $100,000.

-- Charles Eidson, who moved his Tampa Freedom Center into Greater Ministries headquarters, is appealing his 1993 conviction and six-year prison sentence for violating the federal Clean Water Act by dumping motor oil into storm sewers feeding into Tampa Bay. He told customers he had an oil recycling business.

He also was convicted in 1995 of practicing law without a license.

-- James Maher, who incorporated an early version of Greater Ministries with Payne, was sentenced to five years' probation in 1985 after pleading no contest and being found guilty of running a Ponzi scheme.

And Hall was held without bond for two months in 1995 and 1996 for aggravated stalking and violating a domestic violence injunction obtained by his wife.

Payne, Hall, Talbert, Lower and Eidson all were named unindicted co-conspirators in a federal obstruction of justice and conspiracy trial involving a common law court headed by Emilio Ippolito. A jury convicted seven of eight defendants.

A glimpse into the federal investigation targeting Greater Ministries came out in a bond hearing for an Ippolito co-defendant.

On April 22, 1996, Talbert stood before U.S. Magistrate Thomas McCoun trying to get Ippolito co-defendant Charles Dunnigan out on bail pending his trial. Greater Ministries would take Dunnigan to its Pasco County ranch and keep an eye on him if McCoun released Dunnigan, Talbert said.

When asked by Assistant U.S. Attorney Ernest F. Peluso, Talbert said he knew that Greater was under investigation for money laundering and fraud.

Florida regulators failed in their bid to have Faith Promises considered a security subject to state scrutiny. A cease and desist order against a previous version of Faith Promises was dubbed a security by the 2nd District Court of Appeal. But because Faith Promises makes no guarantee of payment and cites a donor's faith as a measure of success, the court ruled the state had no business in it.

Pennsylvania has issued two cease and desist orders that stand. Payne and Hall have returned there at least twice to promote the Faith Promises since those orders were filed, but no action has followed.

During a deposition on the Florida comptroller's regulatory effort, investigator Joan Johnston told Greater Ministries attorney Paul Johnson that the IRS was leading the criminal probe.

``Faith Promises'' is a simple gift program to the ministry, a fact sheet said. ``It is not a multi-level or network. It is not a scam. It just so happens that God has given this ministry a means to multiply those gifts while using them for the work of God's kingdom before He comes.''

That is done through investments in the world market, especially precious and semi-precious metals, Ministries brochures say. Ministries' headquarters are in the Cayman Islands, and the church offers banking and a Visa card through Greater International Bank of Nauru.

Nauru is an island republic north of New Zealand.

Nauru was used as a financial center for another church-based, get-rich-quick program regulators in at least three states shut down in 1992.

Our Father's Congregation, a Houston-based ministry, offered interest free loans and insurance from Texas to Canada. Its founder, Melvin White, is serving a 10-year sentence for mail fraud in Pennsylvania related to Our Father's.

In a 1991 story on Our Father's Congregation, the Ottawa Citizen reported that the Texas-based church's accounts ``were later traced to a single office with only one employee in the British West Indies. Recently, the offshore link was switched to Nauru, a minuscule island north of New Zealand famous for its guano bird droppings.''

Hall's office at Greater Ministries' headquarters, 715 E. Bird St., is just down the hall from the Nauru bank office.

Evidence collected during the comptroller's effort to shut down Faith Promises shows it generates hundreds of thousands of dollars each month.

Payne personally withdrew $50,000 cash from his Central Bank account at least four times between Dec. 8, 1995, and Jan. 2, 1996. Checks from donors in the comptroller's file totaled at least $34,400 between Dec. 26 and Dec. 29, 1995. The checks came from Pennsylvania, Oregon, Virginia, Georgia, Alabama, Michigan, Illinois and Florida.

In an earlier version called ``Double Your Money,'' donors are promised 100 percent returns in 17 months through ``a team of individuals who have extensive experience in working with precious and semi-precious metals and other similar markets both inside and outside the United States,'' a promotional sheet said.

While the process is difficult to follow, ``returns generated in the overseas markets are not themselves unusual. It is unusual for the trading organization to make the returns available to the original benefactor.''

It appears some of Greater Ministries' money is helping buy hotels and convention centers in the Midwest. The ministry provided at least 40 percent of the $7 million needed to buy the Executive Inn in Owensboro, Ky.

The inn is run by Servco development, a for-profit company Payne incorporated in Florida and Nevada. Servco is an arm of the ministry, an undated Greater fact sheet said.

The Executive Inn, Kentucky's second-largest hotel, became Servco property last month.

In Greater Ministries newsletters, Payne says his ministry is in its 25th year. He told a Pennsylvania hearing officer he was ordained a minister in the early 1970s.

That would cover his prison time served after Payne pleaded guilty to 12 counts of lying to a federal grand jury investigating possible fraud in a bankruptcy case involving a former Payne employer, D.H. Overmyer Co. Inc.

The indictment shows each count of 25 original perjury counts involves Payne's role in preparing or submitting invoices against the company. Although Payne dates his ministry at 25 years, there is no evidence Greater Ministries existed prior to its 1992 incorporation. In his application for tax-exempt status, Payne told the IRS that Greater began as an unorganized group in 1991.

He incorporated I John 4:4, Greater Inc., in 1991. Corporate records Payne submitted indicate it was established as a financial advising and planning business.

I John 4:4 Greater Inc. ran a gold coin investment program that could return $1,600 on a $60 investment, records in the comptroller's office show.

His partner in that precursor effort, James Maher, had another run-in with investigators after his 1985 probationary sentence.

In 1995, state regulators forced him to stop selling unregistered securities in Florida with a ``private investment club'' called Lexus International. More than 40 Floridians were refunded about $1.2 million under an agreement Maher signed May 25, 1995.

That's far better than the two families who invested with Talbert and Lower fared.

Armand and June Gendron of Sebring sued the pair in 1995, claiming they walked off with a $100,000 investment in an auto repair shop that fixed up cars for sale overseas.

Talbert, who identified himself to the Gendrons as a minister, and Lower promised a 20 percent return on the ``certificate of commercial note'' in the first year. The couple did receive about $10,000 in a series of monthly payments, but then the cash flow stopped.

When letters of inquiry went unanswered, they drove to the garage's address and found a one-bay garage where the owner said he never heard of DTA.

A year earlier, Talbert took $25,000 from an elderly widow to invest in Cross Financial Services. The group told investors it would buy bank guarantees on letters of credit on shipments of goods sold abroad.

But the group quickly was shut down by the Securities and Exchange Commission, which said Cross was a Ponzi scheme and that $14 million of the $21 million invested went into Cross officers' pockets.

The Sebring case ended in default. The widow's case is pending because Talbert has never been located to be served with the suit. Neither family has seen a dime.