A Michigan pastor allegedly bilked church members, retirees, and laid-off autoworkers out of millions of dollars by convincing them to invest in a “successful” real estate scheme, the Securities and Exchange Commission said last week.
According to the SEC, Larry Holley, the pastor of Abundant Life Ministries in Flint, is facing fraud charges over a scheme that involved Holley using “faith-based rhetoric, replete with references to scripture and biblical figures” as part of his pitch to get people to invest in his real estate business.
As a result of the scheme, the SEC is charging Holley’s company, Treasure Enterprise LLC and his business associate Patricia Enright Gray, with defrauding approximately $6.7 million from more than 80 investors who were guaranteed high returns and told they were investing in a profitable real estate company with hundreds of residential and commercial properties.
In a release, the SEC stated that Holley allegedly told prospective investors that as a person who “prayed for your children,” he was more deserving of trust than a “banker” with their money.
According to the SEC’s complaint, Holley held financial presentations disguised as “Blessed Life Conferences” at churches nationwide.
During the presentations, Holley allegedly asked congregants to fill out cards detailing their financial holdings, promised to pray over the cards, and invited attendees to have one-on-one consultations with his team.
According to the SEC, Holley allegedly called his investors “millionaires in the making.”
In furtherance of the scheme, Gray advertised on a religious radio station based in Flint, singling out recently laid-off autoworkers with severance packages and advising them to consult her for a “financial increase.”
Gray also allegedly promised to roll over investors’ retirement funds into tax-advantaged Individual Retirement Accounts and invest them in Treasure Enterprise.
But the SEC alleges that no investor funds were deposited into IRAs, and Treasure Enterprise “struggled to generate enough revenue from its real estate investments to support the business and make payments owed to investors.”
In total, Treasure Enterprise owes investors an estimated $1.9 million in past due payments, the SEC said.
The SEC’s complaint also states that Holley, Gray, and Treasure Enterprise were not registered to sell investments.
“As alleged in our complaint, Holley and Gray targeted the retirement savings of churchgoers, building a bond of trust purportedly based on faith but actually based on false promises,” said David Glockner, Director of the SEC’s Chicago Regional Office.
As part of the SEC’s complaint, the SEC obtained a temporary restraining order in U.S. District Court for the Eastern District of Michigan that freezes the assets of Holley, Gray, and Treasure Enterprise. The court’s order also appoints a receiver and imposes other emergency relief, the SEC said.