Article By : Patrick Mansfield | U.S. Consumer Finance
A pastor based out of Michigan has been accused by the Securities and Exchange Commission of committing fraud by exploiting members of his church, including laid-off automotive workers, retirees, and many others who he misled by making them think they were investing their money in a safe and profitable real estate company. The SEC has issued an emergency freeze of all assets owned by the pastor in response to the allegations.
Larry Holley is the pastor in question, and he served with Abundant Life Ministries in the town of Flint, Michigan, which has been all over the news lately due to the water quality in the area. According to the SEC, Holley used his position as the church's pastor to garner trust and monetary investments from those who trusted him. He solicited the investments by using his religious rhetoric and biblical references. He reportedly told potential investors that bankers were untrustworthy compared to him since he 'prayed for their children.'
The SEC also alleges that Holley used several "Blessed Life Conferences" throughout the nation that was, in actuality, nothing but financial presentations given as religious programs. During those conferences, Holley asked his congregations to provide detailed information about their finances, and he claimed he would use the information to pray for the members. Holley and his team even provided individualized consultations to certain members.
Holley wasn't the only one charged in the SEC complaint. His business partner, Patricia Enright Gray, was also charged, as well as the company owned by Holley, Treasure Enterprise LLC. The SEC alleges that Gray, Holley, and his corporation raised about $6.7 million from about 80 investors, all of whom expected large returns on their investments since they believed they were investing in a real estate brand responsible for hundreds of properties, both commercial and residential.
A religious radio station in Flint was used by Gray to promote the financial services for the corporation owned by Holley, and the ads specifically targeted automotive employees who had recently been laid off. Those workers often received large severance packages, so they were the perfect target. The funds that were 'invested' by those taken advantage of by Gray and Holley were supposed to be placed in Individual Retirement Accounts, or IRAs, which would then be invested in Treasure Enterprise. According to the SEC, no IRAs were created using investor funds, and the revenue generated by Treasure Enterprise was nowhere near sufficient to repay investors. It is estimated that the corporation owes a little less than $2 million to its investors.
The Director of the SEC's Chicago Regional Office claims that both Gray and Holley purposefully targeted members of their church who they knew to have retirement savings, severance packages from lost employment, or any other large sum of money that could be gleaned as an 'investment.' None of the parties involved, including Holley, were legally allowed to sell investments to their church members. A restraining order has been activated that prevents any assets from Treasure Enterprise, Holley, or Gray from being accessed or transferred.
According to the SEC, the following violations occurred during Holley's activity:
Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934
The SEC's complaint demands dispersal of all gains obtained illegally plus interest and penalties. Permanent injunctions will also be put into place to prevent such action from these individuals in the future.