The African Methodist Episcopal Church accuses the former executive of embezzling millions

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The African Methodist Episcopal Church has sued a former executive who oversaw her pension plan’s investment portfolio, alleging that he and others embezzled money and defrauded their clergy and church ministers who had relied on their pension plan for their retirement.

The lawsuit follows class action lawsuits alleging the church mistreated the pension funds, with one alleging that at least $90 million is missing. The denomination, in turn, alleges that Rev. Jerome V. Harris and others are responsible for tens of millions of dollars in financial mismanagement.

The complaint was filed in the US District Court in Memphis, home of the AME Church’s elders division, which serves approximately 5,000 ministers and church employees.

In its filing Wednesday, the AME church told the court it discovered in September that Harris was “involved in a conspiracy involving multiple individuals and/or entities to embezzle funds and defraud AMEC by subordinating AMEC other misleading, false and grossly inflated financial statements for the African Methodist Episcopal Church retirement plan.

Harris was Executive Director of the Department of Retirement Services for 21 years and was elected to a four-year term from 2000 to 2016. He was succeeded last year by James Miller, who informed pension plan participants in September that payouts from the plan would be suspended pending a forensic audit.

After an independent investigation, the denomination concluded that Harris and other defendants used the church pension funds for personal gain. Harris is accused of depositing funds from the plan into his personal checking account.

Harris could not be immediately reached for comment.

The court filing was in response to the class action lawsuit filed against the AME church in March by Rev. Pearce Ewing, a longtime minister who retired in 2021.

The denomination “denies that it participated in any wrongdoing or wrongdoing.” It also denied having acted negligently or breached fiduciary duties.

“This financial crime was committed against the community of the DMD church and particularly against our ministers and church staff,” Bishop Anne Henning Byfield, president of the DMD Council of Bishops, said in a statement. “With the help of our legal team, the AMEC community is committed to holding those responsible accountable and recovering embezzled funds.”

Based on the investigation, the faith group said it learned that Harris and other parties created entities through which they diverted funds from the retirement plan. The diversions, the AME Church claims, involved illegal activities such as high-risk investments and payments to others and to Harris.

The church also alleges that Harris and others used the plan’s money for loans, some of which have not been repaid. It cited a $2.5 million loan to purchase five properties in Key Marco, Florida, the value of which is less than half the loan amount.

Other defendants include Symetra, a financial services company, and private equity funds such as Motorskill Venture Group, into which Harris invested about $37 million in retirement plan funds without the necessary approvals, according to the church.

The church said its retirement plan had $49.5 million in investments when it opened with Symetra around December 2001.

In his final report to the AME Church, Harris said the plan was worth $128 million. The church said it has since learned that the latter assessment “is an unsubstantiated representation, recklessly and deceptively made to schedule participants without any third-party verification.”

Harris called transactions related to the fund “prudent” and “conservative.”

Accounting firm Rodney Brown and Co., another defendant in the court record, conducted audits for the department for 15 years. Following Harris’ report, he confirmed in 2020 and 2021 that the retirement plan contained $128 million in funds. The investigation, the church said, showed that this assessment was “deceptive, false and grossly inflated.”

The AME Church says it intends to return “the full initial investment plus interest” to each retirement plan participant.

It states that all of the losses Ewing has suffered are the result of actions by third parties and/or church “employees acting outside their sphere of employment”.

In addition to the lawsuit, the church said Harris and others are being investigated by law enforcement.

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