AME Church sues former executive, alleged accomplices for plundering millions from retirement fund

ame church, african methodist episcopal
The Steeple and Peak of Emanuel African Methodist Episcopal Church, Charleston, South Carolina. |

The African Methodist Episcopal Church has filed a lawsuit against the former head of its retirement service Rev. Jerome Harris and 10 other individuals and entities, alleging involvement in a sophisticated scheme to defraud millions from the retirement funds of thousands of clergy and employees. 

The lawsuit was filed Wednesday in the U.S. District Court for the Western District of Tennessee in Memphis. The litigation comes about two months after retired pastor Rev. Cedric V. Alexander filed a proposed class-action lawsuit claiming the denomination lost 70%, or nearly $100 million, from its retirement plan through "foolish" and risky investments.

About 5,000 plan participants were impacted financially.

Along with Harris, who served as executive director of the AMEC Department of Retirement Services from July of 2000 until 2021, the nine-count complaint lists Symetra Financial Corporation as a cross-defendant. Third-party defendants are Robert Eaton, Jarrod Erwin, Randall Erwin, Financial Freedom Group, Inc., Motorskill Asia Venture Group, Motorskill Asia Ventures 1, LP, Motorskill Venture Group, Motorskill Ventures 1, LP, and Rodney Brown & Company. 

Eaton, who resides in Illinois, was designated by Harris as the financial advisor for the Department of Retirement Services. The Erwins, both of Sugar Land, Texas, served as principals of Motorskill Ventures, Inc. Financial Freedom Group, Inc. is a corporate entity established in 2007 and owned by Harris and Eaton jointly.

Motorskill Venture Group, Motorskill Ventures 1, LP, Motorskill Asia Venture Group and Motorskill Asia Ventures 1, L.P. are private equity funds into which Harris, in consultation with Eaton and Erwin but without any authority from AMEC, invested millions of dollars from the annuity plan, the complaint claims.

Rodney Brown & Company is an external certified public accounting firm retained by the AMEC to perform annual financial statement audits for the last 15 years, including in 2020 and 2021.

The complaint alleges that the denomination only discovered the fraudulent scheme after they elected a new director for the Department of Retirement Services in 2021 and immediately hired an expert legal and forensic team to conduct an investigation.

"Dr. Harris and/or Eaton, without the knowledge (and accordingly, without consent) of AMEC General Board, the AMEC Commission on Retirement Services, or any other AMEC bodies or officers, created various entities that purported to either perform services for the Department or use Department and/or Annuity Plan funds," The AMEC lawsuit says.

In the complex scheme alleged by the historically black denomination, Harris repeatedly stole through his professional capacity with AMEC and the help of his alleged accomplices while presenting investors with "a deceptive, false, and grossly inflated value for the Annuity Plan."

"AMEC learned that only about $37,000,000.00 of Dr. Harris's previously reported $128,000,000.00 valuation of the Annuity Plan was held by Symetra," the complaint states.

AMEC claims there is no evidence that the total value of the retirement fund reported by Harris was ever the actual value of the funds.

"The $128,000,000.00 valuation reported by Dr. Harris was a baseless representation recklessly and deceptively made to plan participants without any third-party verification," the complaint reads. 

The complaint filed by Alexander in March claims Harris was "given sole authority to invest tens of millions of AMEC clergy's and other Church servants' retirement savings in a questionable and potentially unlawful purchase of undeveloped land in Florida, a promissory note to an Illinois installer of solar panels, and an even more foolish investment in a now non-existent capital venture outfit."

While this was happening, church officials kept reporting to the plan's beneficiaries that their retirement funds were safely flourishing as investments in annuities from Symetra Financial.

During a meeting of the denomination's general board on Jan. 31, participants in the church's retirement plan were told that "more than $90 million of [the denomination's] $126.8 million [retirement fund] was missing." Investors were informed no one connected with the denomination except Harris knew where the "money and other plan-related records went."

AMEC accused Symetra Financial Corporation of approving requests from Harris to electronically wire annuity plan funds to Motorskill Entities "without confirmation that Dr. Harris had the authority to do so." The Christian Post reached out to Symetra Financial for comment on the lawsuit. A response is pending. 

"From 2005 to 2021, Dr. Harris via Department and/or Annuity Plan funds paid about $37 million to Motorskill Entities," the complaint said.

AMEC Council of Bishops President Anne Henning Byfield said the lawsuit is part of the church's effort to hold the perpetrators accountable.

"This financial crime has been committed against the AME Church community, and specifically our clergy and Church employees," she said in a statement to The Christian Post. "With the help of our legal team, the AMEC community is committed to holding those responsible accountable and recovering embezzled funds."

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