3 Min Read
March 30 (Reuters) - A Flint, Michigan pastor has been charged by the U.S. Securities and Exchange Commission with running a $6.7 million fraud in which he misled churchgoers, retirees and laid-off auto workers hoping for real estate riches by appealing to their faith.
The SEC on Thursday said Larry Holley, 59, the pastor at Abundant Life Ministries, told victims that because he "prayed for your children" he was more trustworthy than a banker, and told congregants that investors in his real estate business were "millionaires in the making."
Eighty-three people from 14 U.S. states, including some who turned over their life savings, have invested with Holley since February 2015, but his struggling company Treasure Enterprise LLC owes about $1.9 million to half of them, the SEC said.
A federal judge in Detroit this week froze assets belonging to Holley, Treasure Enterprise, and Patricia Enright Gray, 55, a financial consultant for the company.
All three are defendants, and according to the SEC had made financial presentations promoted as "Blessed Life Conferences" at churches nationwide.
"Holley and Gray targeted the retirement savings of churchgoers, building a bond of trust purportedly based on faith but actually based on false promises," David Glockner, director of the SEC office in Chicago, said in a statement.
Treasure Enterprise and Abundant Life, which share a phone number, had no immediate comment. It is unclear whether the defendants have hired lawyers.
The SEC called the case an example of "affinity fraud," in which alleged fraudsters target victims with whom they share a characteristic, such as religion, ethnicity or employment.
Last August, the Michigan Department of Licensing and Regulatory Affairs barred the defendants from selling unregistered securities and making misleading statements.
But the SEC said the defendants have since "lied" to investors about those proceedings, to create a pretext for their inability to meet redemption requests.
The lawsuit seeks to recoup ill-gotten gains and impose civil fines.
The case is SEC v Treasure Enterprise LLC et al, U.S. District Court, Eastern District of Michigan, No. 17-10963. (Reporting by Jonathan Stempel in New York; Editing by Richard Chang)