SEC Accuses a Former CEO of Bilking Churchgoers
April 12, 2012 (Associated Press) ATLANTA - A former businessman was accused Thursday in federal court of luring worshipers at mostly black churches into a phony scheme promising rock-solid investments, then secretly diverting their money to fund his lavish lifestyle.
Ephren Taylor swindled more than $11 million while he was chief executive of North Carolina-based City Capital Corporation, according to the complaint filed in Atlanta by the Securities and Exchange Commission.
He told the investors their money would be used to support small businesses such as juice bars and gas stations, the complaint said. But instead regulators said the funding went to publicize Taylor's books, hire consultants and even finance his wife's singing career.
"Ephren Taylor professed to be in the business of socially conscious investing," said David Woodcock, who directs the SEC's Fort Worth Regional Office. "Instead, he was in the business of promoting Ephren Taylor."
Also targeted by the SEC complaint is City Capital, which has since relocated to California, and Wendy Connor, who was City Capital's chief operating officer. She's accused by the SEC of "severe recklessness" by helping Taylor's plot.
Taylor couldn't be reached for comment Thursday and his lawyers say they don't know his whereabouts. Connor's attorney and City Capital officials didn't immediately return calls.
In October, Taylor had sent The Associated Press a statement comparing himself to other business leaders who were "crucified" during the economic downturn. "Sometimes people will participate in a game they don't have a stomach for, and when it goes south, they put the blame on those that led that game," he had said.
The government's complaint against Taylor mirrors two separate lawsuits filed last year in Georgia and North Carolina that accused him of duping clergy into giving him the pulpit on Sundays and bilking parishioners out of their hard-earned money with false promises. The pending lawsuits claim the 29-year-old Taylor was a con artist who targeted worshipers in at least five East Coast states since 2004.
Attorney Cathy Lerman, who sued Taylor in North Carolina, said the SEC's complaint was a "great day for my victims."
"This self-described minister targeted and bilked hard-working, devout minorities for his own financial gain and he must be brought to justice," Lerman said.
The allegations have tarnished Taylor, who resigned in 2010 after becoming the chief executive of the holding company City Capital when he was 23.
Taylor had wowed audiences with an inspiring success story. He told them he sold video games at 12, created a job search engine by age 18 and was the youngest black leader of a publicly traded company in the U.S. when he was tapped in 2006 to lead City Capital.
He also wrote books proclaiming his financial savvy and appeared on news networks offering financial advice. During Sunday sermons, the lawsuits say, he'd boast of his TV appearances and tell audiences that pouring money into mutual funds or stocks were "money losers" before pitching them his company's investment schemes.
The SEC's complaint said some of the money Taylor raised was actually used as promised, but the majority was spent on unrelated items such as promoting his book, paying off his credit card bills and buying studio time for his wife's music career.