Former Clergy Assurance Fund Official Indicted on Wire Fraud Charges in Philadelphia, Pennsylvania

A federal grand jury indictment and arrest have brought new developments in a fraud case against a former leader of the Clergy Assurance Fund (CAF), one of the oldest Episcopal organizations in America. More than a year after fraud allegations first surfaced, the fund’s former executive director and treasurer has been indicted and arrested on wire fraud charges that could carry penalties of decades in prison.

The fund’s current treasurer, who worked with the defendant for more than 20 years, told The Living Church that CAF is financially sound but is still recovering from a deep sense of betrayal.

After an investigation by the FBI, prosecutors in the Eastern District of Pennsylvania allege that John A. Miller, 74, “used his position of trust to steal more than $1.6 million intended for widows and orphans of deceased clergy.” Protecting people who have no other support is the lesson at the heart of this fund’s purpose (Psalm 82:3). Trial is scheduled to begin February 29, 2024, before District Court Judge Kelley Brisbon Hodge in Philadelphia, though initial trial dates are often postponed.

Court documents indicate that the FBI arrested Miller on December 21, 2023, on wire fraud charges. Bail was set at $75,000, and Miller was released on an unsecured appearance bond, which means he will owe the money if he fails to appear in court. His bail conditions include a 9 p.m. curfew monitored by an electronic device. Calls to Miller and to his attorney, Timothy J. Tarpey of Philadelphia, were not returned.

As TLC first reported in October 2022, a forensic audit by BBD, a Philadelphia-based accounting firm, found that Miller allegedly caused two payments to be issued for certain death benefits: one to the appropriate beneficiary and one to Miller, drawn on separate CAF accounts. In a confidential July 11 letter to the fund’s governing board, the then-vice president, James L. Pope, reported $1.4 million in duplicate checks issued between January 2016 and March 2022, when Miller was fired. A district attorney’s press release indicated $1.6 million dating back to January 2015. The indictment states that Miller “knowingly used fraud proceeds to fund personal purchases for himself, including international cruises, vacations to the Caribbean, and a luxury condominium.”

CAF is older than the United States. It was founded in 1769 to provide financial support to the families of deceased Episcopal clergy in New York, New Jersey, and Pennsylvania, and later was divided into separate funds for each state. The Pennsylvania organization was known as The Widows Corporation for most of its existence, and CAF adopted its current name in 2019 in conjunction with its 250th anniversary. The fund is governed by a board made up of the bishops of the five dioceses within Pennsylvania, along with up to 35 volunteers. The current president is the Rt. Rev. Daniel Gutiérrez, Bishop of Pennsylvania. His office referred inquiries to the Rev. Noah Evans, the fund’s vice president.

Asked what has been done to prevent future fraud, Evans wrote by email that the fund “has restructured internal financial controls including hiring CLA, an accounting firm, that provides outsourced accounting for organizations. This allows us to have a greater separation of duties. We use the payment system Bill to process all payments and use the lockbox for premium payments and other deposits.” In a phone conversation, Pope, who now serves as treasurer on a volunteer basis, described the controls more informally. “I can’t spend a nickel without getting somebody else to sign off on it,” he said, adding that he supports the precautions. Pope retired as vice president in June 2023. He said the lasting damage to the organization is more psychological than financial, describing the shock of learning that the person “who you’re paying six figures a year is also paying themselves,” to the tune of $1.6 million over several years. “Betrayal is a very good word, I think, to describe that.”

Pope said the fund has continued to meet its obligations. “We have been able to make payments to our beneficiaries as they have fallen due,” he said, adding that CAF has funded grants and medical programs for its members and the five dioceses in Pennsylvania. He said the fund has “about 150 percent of the actuarially required financial reserves that we need for the insurance in force.” He also said most of the $1.6 million is probably gone for good. CAF’s insurance covered $60,000, and the fund will have a claim on the proceeds from the sale of Miller’s condominium if he is convicted. The indictment indicates that $281,109.96 was seized when the condominium was sold in August 2023.

CAF has not posted annual reports to its website for the past two years, which it attributes to its time of reorganization. Pope provided audited financial reports from BBD showing the fund held more than $71 million in assets as of March 31, 2023. That year’s reported loss of nearly $7 million was, by Pope’s account, mostly from investment losses, with well over half of it due to a sharp decline in the U.S. stock market. The S&P 500 Index has since recovered the lost ground and is trading near its 52-week high.

Source: Read the original report