Two men from Maryland have been convicted by a Michigan jury in a Ponzi scheme that scammed 21 churches in Detroit and nearby cities out of almost $660,000.
In a trial that lasted three days, the Wayne County jury found Michael J. Morris, 30, of Waldorf, Md., and William T. Perkins, 55, of Oxon Hill, Md., guilty of one count each of racketeering, conspiracy to commit false pretenses, and three counts of false pretenses over $20,000.
Morris and Perkins, representatives of Television Broadcasting Online and Urban Interfaith Network, offered the churches a deal that would allow them to install lobby kiosks that would provide community and religious information to their congregants. The pastors were asked to sign a lease agreement for the kiosks, but were told that a "national company" would be covering all costs associated with the rental. In some cases, the churches were told that the kiosks would pay for themselves through advertising. Morris and Perkins were then paid approximately $27,000 by the leasing company for each of the kiosks.
In reality, there was no "national sponsor" and the agreements obligated the churches to long-term lease payments of tens of thousands of dollars, although the value of the kiosks was no more than a few thousand. In some instances, the leases allowed the company to take funds directly from the churches' bank accounts, leaving some of them wiped out financially.
"These felony convictions bring justice for the churches and for the greater community that fell victim to this extensive Ponzi scheme," said Michigan Attorney General Mike Cox.
The conviction relates only to the fraud committed in Michigan. Morris and Perkins are also accused of running the scheme on over 160 churches in 13 other states and the District of Columbia. The racketeering charge carries a maximum penalty of 20 years and/or a fine of $100,000; the conspiracy charge a maximum of 10 years and/or a fine of $10,000; and the false pretenses charge a maximum of 10 years and/or a fine of $15,000.
In 2009, Washington, D.C. Attorney General Peter Nickles filed a similar suit against five companies who were accused of running a kiosk scheme that defrauded 50 Black churches in the nation’s capital, and as many as 300 churches in Maryland, Michigan, Wisconsin, Texas, and California.
Hundreds of churches nationwide are fighting expensive lawsuits seeking thousands of dollars in unpaid kiosk lease fees. Several churches have joined together to file countersuits in order to recoup their losses and void the lease agreements.
Sentencing for Morris and Perkins is scheduled for December 6 in Michigan's Wayne County Circuit Court.