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Lawsuit alleges African Methodist Episcopal Church, church executive stole millions from clergy retirement funds

A scandal has recently rocked the African Methodist Episcopal Church, alleging that one of the church’s financial executives spent much of his career embezzling funds from an annuity earmarked for retired church employees, including clergy.

In late March, several retired AME clerics filed six separate class-action lawsuits against the AME church and against Rev. Dr. Jerome Harris, as well as several third-party entities that they claim either ignored or actively participated in the misappropriation of funds.

Harris, the executive director of the Department of Retirement Services for the church, was originally elected to the position in 2000 and was subsequently re-elected every four years until September 2021, when he decided to retire. At that point, James Miller took over and soon afterward suspended all annuity payments after he noticed egregious differences between the amount of money reported to be in the retirement annuity and the amount that was actually there.

While Harris stated in his final report to the church last year that the annuity had grown to $128 million from the approximately $50 million it had as of late 2001, the church said that a forensic audit and other investigations put the value closer to $37 million.

“There is no evidence that the total value of the retirement fund reported by Rev. Harris was ever the actual value of the funds,” the church said in a statement.

Harris and financial broker Robert Eaton have been accused of creating LLCs through which they could divert money back to themselves by loans that were never repaid. Harris may also have spent $2.5 million on land in Florida valued at half that amount. And there are other allegations that he simply pocketed some of the money.

The six lawsuits, originating in five different states, plus a federal investigation into what may be a discrepancy of $90 million, have made this case quite complicated. To streamline some of the complexity of pretrial discovery, the various plaintiffs temporarily consolidated their efforts in May and filed one joint lawsuit in the U.S. District Court for the Western Distsrict of Tennessee in Nashville, where the church is based. The lawsuits may still be adjudicated separately, though.

The church has adamantly denied any involvement in the alleged scheme and filed its own cross-complaint against Harris and others.

“Dr. Jerome Harris and ten other individuals and entities” orchestrated “a sophisticated scheme to embezzle funds and defraud the AMEC’s Ministerial Retirement Annuity Plan,” a church statement says.

Despite the fact that the church says it is not responsible for the missing funds, it has vowed to restore “the full initial investment plus interest to each retirement plan participant.” The church currently has approximately 5,000 retired clergy and other employees.

(H/T: ScoonTV)