A former financial advisor who allegedly defrauded megachurch parishioners out of more than $11 million was arrested and indicted yesterday by a federal grand jury. Ephren Taylor, 31, and business partner Wendy Connor are charged with conspiracy and multiple counts of fraud.
Taylor, former CEO of City Capital Corporation, and Connor are accused of swindling churchgoers across the country, often by convincing them to make fraudulent investments in small businesses, and using their money to pay personal expenses. Between April 2009 and October 2010, the two defrauded hundreds of investors out of millions of dollars, according to prosecutors. Taylor traveled across the country giving “Building Wealth Tour” seminars at churches, telling investors a portion of their profits went to charity.
According to ABC News, the Department of Justice reported more than 80 people from Georgia alone “lost more than $2 million because of Taylor’s scheme.” Investors included congregants from Bishop Eddie Long’s New Birth Missionary Baptist Church in Lithonia, Ga., and Joel Osteen’s Lakewood Church in Houston.
Prosecutors also said Taylor pushed investments in sweepstakes machines loaded with games allowing players to win cash prizes, telling victims they would generate 300 percent returns. He claimed the machines were 100 percent risk-free. Accusations also include convincing victims to use self-directed IRAs to make investments, then using their money to pay business expenses, personal expenses, and returns to other investors.
The Securities and Exchange Commission filed a complaint in April 2012 accusing Taylor and Connor of defrauding investors out of more than $11 million. A federal judge ordered City Capital to hand over nearly $15 million in profits, interest, and civil penalties.
Taylor’s attorney, Jane Bruno, said her client surrendered to authorities after learning of the indictment and is anxious to address the charges.
Cathy Lerman, a Florida attorney representing some of Taylor’s alleged victims, said she is pursuing third parties and has been after Taylor since 2007, although she had no idea how large the case would become.
“As a lawyer with 30 years of experience, this is the first time I’ve ever had to talk clients out of committing suicide,” Lerman said. Dozens of clients have faced foreclosure and unexpected medical bills after losing their life savings and unwittingly destroying their families’ financial stability, she said.
Joann White, 67, from Belleville, Mich., is one of Lerman’s clients. She saw Taylor on television talking about his book, and invested in what she thought was a laundry service run by college students and an alternative fuel source gas station. Instead, her retirement savings vanished and her family almost became homeless because they couldn’t pay their mortgage.