Hearing Covers Calvary Baptist Former Pastors' Handling of Millions in Church Money
By Jon Cassidy
Orange County Register
August 21, 2008
http://www.ocregister.com/articles/church-board-cunningham-2132046-school-richard
FULLERTON – A former secretary of Calvary Christian School in Yorba Linda testified this week that the school's director, a former pastor at Calvary Baptist Church of Yorba Linda, mixed school funds with his own money, paid for personal expenses with a school credit card, and deposited his own money into the school account when it ran low.
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| PASTOR ARRAIGNED: Philip Cunningham, who took over as senior pastor of Calvary Baptist Church of Yorba Linda in 1995, was arraigned Thursday August, 16, 2007, at North Justice Center in Fullerton on felony counts. Photo by Jebb Harris |
The testimony came during the first of two days of a preliminary hearing at North Justice Center in the criminal case against Richard and Philip Cunningham, a father and son who resigned as pastors at Calvary Baptist in 2006 after a private investigation concluded that millions in church and school funds were misspent. The purpose of the hearing is to determine whether there is enough evidence to proceed with a trial.
The court also heard testimony from a former church board member who said the board exercised no oversight of the accused pastors; and from a retired Anaheim police captain whose private investigation found that more than $3 million had been misspent from 1998 to 2006.
Mandy DiAddezio, the former secretary at Calvary Christian School, at first invoked her Fifth Amendment right against self-incrimination; likewise, during the police investigation, she had her attorney tell police she wouldn't talk. She was granted immunity from prosecution Tuesday and ordered to testify.
DiAddezio said she did not report the irregularities because she trusted Philip Cunningham's explanations, and that the school did not have a board of directors regularly meeting to oversee the school.
She also said she took under-the-table cash payments rather than a salary during her last two years at the school.
DiAddezio testified that Philip Cunningham at times paid his personal credit card using school funds, booking them as travel expenses, and would book payments for his dry-cleaning bill as janitorial expenses. But he also put his own money into the school account when it was low, she said.
"He always blurred the line" between personal and school funds, DiAddezio said. "He put money in some of the time and then he'd take some out."
Philip Cunningham paid his children's college expenses with school funds, saying that the church board had authorized it, DiAddezio said.
The church board had little oversight of finances, testified Danny Skaggs, a former board member. He described the board as "a group of pastors and a group of yes-men" who were discouraged from asking questions and voted on matters only "two or three" times during his two years on the board.
The only financial statements the board saw, Skaggs said, were monthly balances of tithes given and bills paid presented not as spreadsheets but on sheets of paper "pencil-scratched five minutes before walking into the room."
The board knew nothing of the multiple accounts opened in the church's name, Skaggs said. A police report tallied $3,669,376 that the Cunninghams withdrew from those accounts as cash or cashier's checks, without accounting for it.
Steve Rodig, a retired captain from the Anaheim Police Department, opened a private investigation into the case at the board's request after he was contacted by Jeff Winter, a church member at the time who is also a deputy district attorney.
Rodig testified that when he asked for the church's records, he was handed a few recent Visa bills and a two-foot by two-foot box partially filled with miscellaneous receipts and documents. For the investigation, he had the church request bank statements going back eight years. The church was founded by Richard Cunningham in 1971.
Throughout the hearing, defense attorneys Marlin Stapleton and Ed Flores challenged the provenance and legitimacy of Visa billing records and bank statements.
Flores presented board meeting minutes from January 1975 mentioning authorization for a credit card for Richard Cunningham's personal use and travel.
In their separate reports, Rodig and Det. Sandra Stone of the Brea Police Department say that both Cunninghams confessed to taking smaller amounts.
Stone reported that Philip Cunningham admitted taking $700,000 to $800,000 between 1998 and 2006, and that Richard Cunningham admitted taking $400,000 since 2000. After Stone booked the tapes of her interview, the District Attorney's office told her the tapes recorded only her half of the interview. She went back and found that her tape recorder was defective, she reported.
Rodig took depositions of both Cunninghams with a court reporter present as part of a civil suit by the church. But neither Cunningham signed his deposition transcript, as the church dropped the suit shortly after the interviews, and they were no longer required to sign.
The church dropped the suit after the Cunninghams returned $3.1 million to the church, according to a letter church board chairman Richard Zazuetta sent to prosecutor Douglas Brannan.
The Cunninghams, who each earned less than $100,000 a year on the books, between them owned six homes, two timeshares and cars that included a Cadillac and a Mercedes-Benz. To pay back the church, Phil Cunningham deeded over a Palm Springs condo and sold his Yorba Linda house. Richard Cunningham deeded his Yorba Linda house to the church and paid several hundred thousand dollars in cash, according to property records and former church board members.
Richard Cunningham's debt was paid almost entirely through appreciation on his house at 4415 Deodar Dr. He bought the house in 1989 with a $165,000 mortgage, and the church sold it at the peak of the real estate boom for $1.7 million.
After the scandal broke in April 2006, Richard Cunningham deeded a condo at 20024 Clearwater Dr. in Yorba Linda to another son, Richard Cunningham II.
Contact the writer: jcassidy@ocregister.com or 714-445-6694.
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