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	State Investigates Alleged Fraud of Church Investors By J. Scott Trubey Atlanta Journal-Constitution October 21, 2011 http://www.ajc.com/news/state-investigates-alleged-fraud-1206762.html The U.S. Secret Service has confiscated laptop computers from Bishop Eddie Long’s Lithonia megachurch, and the Georgia secretary of state is investigating an investment company and its former chief executive for possible securities violations involving investments sold to Long church members. Also, 10 members of the New Birth Missionary Baptist Church on Wednesday sued the pastor, the church, three investment companies and others over an alleged scheme the parishioners say bilked them of $1 million. One of the investment companies, City Capital Corp., and the firm’s former chief executive, Ephren Taylor -- whose financial dealings were endorsed by Long to his members -- are the targets of the state investigation, according to the secretary of state. Attempts to reach Taylor were not successful. Long was not available for comment. A U.S. Secret Service spokesman told Channel 2 Action News the agency is performing forensic examinations on laptops from New Birth on behalf of DeKalb County police, but the federal agency would not divulge any specifics. The actions of the federal and state agencies are separate, the state said. However, attorneys for the church members said some of their clients have had been approached by the Secret Service about the alleged investment scheme. The Secret Service investigates computer-related crimes and counterfeiting besides protecting political figures and dignitaries. “It is possible the scope of the investigation could expand as we obtain additional information,” Secretary of State Brian Kemp said Thursday in a statement, urging people with knowledge of the alleged scheme to contact his office. A DeKalb County police spokeswoman told Channel 2 that her agency had received complaints related to the church member investments and forwarded its information to the Securities and Exchange Commission. The 10 New Birth members sued City Capital, two other companies, the church, Long, Taylor and another man over soured investments they said the bishop endorsed. They claim Long vouched for Taylor and his investment opportunities in seminars at the church in October 2009. Long’s endorsement prompted them to invest. They lost everything. Long owed a fiduciary duty to the plaintiffs, to look out for the best interests of his members, said Quinton Seay, an attorney for the plaintiffs. The lawsuit claims Long and the church were compensated by the other defendants for allowing them to offer investment advice and solicit potential investments. The plaintiffs also contend Long and Taylor acted as sellers of securities and that neither the bishop nor Taylor were licensed to sell securities in the state. The investment opportunities weren’t registered for sale in the state, the suit said. Long, in a video posted earlier this year on YouTube, pleaded with Taylor and his company to “do what’s right” and return members’ investments. The bishop said then that neither he nor the church were compensated for member investments. Lillian Wells, 60, who still attends New Birth, said her IRA lost nearly $80,000 in value during the stock market collapse and she was concerned for her finances. She next invested $122,000 with Taylor after Long gave the investment company CEO a rousing introduction. Wells described Taylor as “charismatic” and said she never would have invested with him without the bishop’s blessing. Wells said she and other alleged victims met with Long and asked him to help them get their money back. She continues to attend the church in hopes Long and New Birth will help the investors. Wells said her house is slated for foreclosure on Nov. 4. “You lead your sheep to the water and tell them to drink, you know, you drink,” Wells said of Long. Wells said she was told by an employee of Taylor’s that Long had invested, too, but she now believes the pastor did not take part. Taylor’s company, City Capital, told the Securities and Exchange Commission in annual filings prior to the seminars that the company’s independent accountants had doubts about the company’s ability to continue operating. City Capital previously had suffered heavy losses. Last year, the Alabama Securities Commission issued a cease and desist order in that state against Taylor and associates for marketing unregistered securities and for not being licensed to sell in Alabama. Dan Kolber, a securities attorney with Intellivest Securities in Atlanta, said the allegations in the suits are serious. Allegations against Long for having a fiduciary duty would be difficult to prove, unless there was evidence his compensation was tied directly to sales of the actual investments. “It’s very, very hard to prove the existence of a fiduciary standard outside his scope as a clergyman to his congregation,” Kolber said.
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