Two former leaders of the African Methodist Episcopal Zion Church in California are facing federal charges after authorities alleged they defrauded churches across the state out of $14 million.
Staccato Powell, 62, of Wake Forest, N.C., and Sheila Quintana, 67, of Vallejo each face two counts of wire fraud and one count of conspiracy to commit wire fraud and mail fraud, according to the U.S. attorney's office for the Northern District of California. Powell also faces one count of mail fraud.
Authorities allege the two took control of congregations' properties and used them to secure loans to benefit themselves in a scheme that ran from around October 2016 to late July 2021, according to the indictment, which was filed Jan. 6 and unsealed Tuesday.
Powell and Quintana served as officers of Western Episcopal District Inc., which they formed in 2016 after Powell was selected to be bishop overseeing the church's Western District, prosecutors said.
"The indictment alleges that Powell and Quintana conspired to defraud AME Zion Church congregations in Oakland, San Jose, Palo Alto, and Los Angeles by re-deeding the local congregations' properties in the name of WED Inc.," prosecutors said.
Court documents describe the conspiracy as a "campaign of pressure and misinformation targeting pastors who served at the pleasure of Powell."
Before Powell and Quintana's actions, the congregations had little to no mortgage debt, prosecutors said. The pair used false statements, omitted information and faked documents to manufacture evidence that local congregations agreed to the new mortgages.
Those mortgages often had unfavorable terms such as high interest rates, according to the indictment.
They "did not inform the private lenders of the true facts, and they did not inform the local congregations of the new mortgages using the local church properties as collateral," prosecutors said.
Powell and Quintana used proceeds from the high-interest loans to benefit themselves, according to the indictment. Powell bought properties in North Carolina and paid off his existing mortgage debt in that state. Quintana's spouse received cash payments.
The scheme came undone in 2019 after congregations started getting notices that loans on their churches were in default, the court documents said.
Some church members filed complaints with AME Zion Church leaders, the court documents said. On Jan. 4, 2019, church authorities told Powell to stop and return all property deeds to their respective congregations.
The fraudulent scheme, however, continued.
"By mid-2020, all of the hard money loans were in default, and WED Inc. filed for Chapter 11 bankruptcy protection," the indictment said.
The July 30, 2020, filing by WED listed 11 churches in California, Arizona and Colorado as its assets, prosecutors said. That case is pending in federal Bankruptcy Court.
AME Zion Church leaders voted to relieve Powell of his financial and administrative duties on Aug. 7 that year, according to the indictment. He was "disrobed" on July 29, 2021, formally stripping him of his title as bishop.
This story originally appeared in Los Angeles Times.