Former Allen University board member sues board, AME Church, alleging fraud

By Leonardo Blair, Senior Reporter Thursday, September 10, 2026

A former member of the board of trustees at Allen University — a private, historically black school in Columbia, South Carolina, affiliated with the African Methodist Episcopal Church — has filed a lawsuit accusing trustees and church officials of failing to investigate, or refusing to investigate, multiple allegations of financial misappropriation and misuse of school property.

Karol Widemon Montgomery, a Georgia attorney who served on the university’s board of trustees with U.S. Rep. James Clyburn, D-S.C., makes the allegations in a nearly 400-page amended complaint filed last month in the U.S. District Court for the District of South Carolina. Another version of the complaint was initially filed in March.

“What I am looking for is accountability and independent accounting and a record of what occurred,” Montgomery told The Christian Post Wednesday in defense of the university founded by AME ministers in 1870 to educate formerly enslaved black Americans and their descendants.

“If Allen [University] is owed millions of dollars, as I'm alleging, […] if that is the case, then give them their money back,” she said. “I'm not out to destroy anyone or any organization, but I am advocating on behalf of Allen University, its students, its faculty, its staff and its donors because someone has to, and the people who should be protecting it, I'm alleging, have not done it.”

Montgomery’s complaint alleges that the defendants worked together through their overlapping positions and entities to carry out, conceal and prevent investigation of the alleged misconduct. She characterized the defendants as participating in a pattern of racketeering activity and a Racketeer Influenced and Corrupt Organizations Act-related conspiracy that victimized the university and students.

In addition to naming the current Allen University board and the AME Church, Montgomery also lists as defendants in their individual capacity current board Chairman Bishop James Davis, former board Chairman Bishop Samuel Green, former Allen University President Ernest McNealey, the AME Church Council of Bishops, and other entities.

The lawsuit noted that Green and Davis served as presiding bishop of the AME Church's Seventh Episcopal District, chairman of the Allen University Board of Trustees, and president of the Vision Center — a 218-acre religious retreat and conference center located in Winnsboro, South Carolina. It alleges that this concentration of power allowed these same leaders to control the institutions and their finances and influence whether the board would investigate their conduct.

Montgomery accuses McNealey of transferring a building the university once owned “free and clear,” called the Waverly Building — which once housed a historic black hospital — into a network of entities he controlled. He is accused of using the property to generate millions of dollars through loans, mortgages, investments and an additional $12 million in New Markets Tax Credits.

The lawsuit alleges that school officials tried to obtain about $4.2 million from the federal government using false documentation to transform the building into a multipurpose venue. The filing alleges that after an initial request for U.S. Department of Housing and Urban Development funding was rejected because the work did not fall within the eligible dates, the school resubmitted documentation for the same work with changed dates to make it appear eligible for federal reimbursement. That second submission was allegedly made with McNealey's knowledge and approval, and Green is accused of approving McNealey's actions. HUD still did not release funding for the project.

According to the complaint, Allen University did not benefit from the proceeds from the property transactions. Even after the transfer of the building, the university later spent about $8 million in operating funds to renovate the Waverly Building.

The complaint also alleges that while some $1 million is raised annually for the university in Seventh Episcopal District fundraising and “Allen Days,” the university did not receive a significant portion of those funds. It was further alleged that Pell Grant funds belonging to eligible Allen University students were not released after their university expenses were satisfied.

In a joint motion, which was granted, requesting an extension of time to reply to Montgomery’s complaint, attorneys for the defendants said she added more than 820 new allegations that were not included in her original complaint.

Magistrate Judge Kaymani D. West gave them until Oct. 5 to file a response.

When asked if she had raised her concerns specifically with Rep. Clyburn, Montgomery told CP she did, but he refused to address it.

“I sent him all of the documentation I was sending to the board to his personal email to ensure that he got it, not just to his public email,” she told CP. “I spoke with him, and he told me that he was going to recuse himself. He wasn't going to discuss it.”

Clyburn’s office did not immediately respond to a request for comment from CP Wednesday.

The Allen University board met last December to discuss Montgomery's complaint. A university attorney stated that McNealey doesn't own the LLCs created to secure tax credits for the Waverly project, reports The Post and Courier. The attorney said that McNealey did not receive rent or interest from the Waverly building arrangment with the LLCs.

Montgomery argues that the alleged mishandling of Allen University’s finances and other assets is similar to the poor oversight that led the AME Church to lose some 70% (nearly $100 million) of its retirement plan through "foolish" and risky investments.

A now-settled lawsuit alleged that Jerome V. Harris, the former executive director of the denomination's Department of Retirement Services, 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."

"This suit is about a complete and total abrogation of these fiduciary responsibilities by Defendants, resulting in numerous breaches of duty and resulting in a single, unmonitored individual, Defendant Harris, controlling all Plan assets and investments," that complaint stated.

Montgomery said that when she started asking questions and pushed for accountability, the board and church leaders controlling the university refused to investigate the allegations, and she was ultimately removed as a board member in violation of the board’s bylaws in 2025.

“I was removed in violation of the bylaws and the law, and I am requesting reinstatement,” Montgomery told CP.

“This is not something I wanted to do. […] This is not something that I sit around saying, ‘Oh, I'm going to get these people.’ I don't like doing this, very frankly. This is not my idea of a good time,” she added.

“But I do believe I was called to do this, because I believe the AME Church belongs to God. It does not belong to the bishops, it does not belong to the presiding elders, and it does not belong to the trustees of Allen University,” she continued. “We are supposed to walk in a way that gives us some type of moral authority. We're supposed to do things the correct way, and the board of trustees has a fiduciary duty to the school to try and caretake the school and protect its finances and ensure that it's properly managed.”