February 27, 1998: Wegner, Other Nazarene Churchmen Detail Frauds

Update by Chuck Fager

Wichita, Kansas – In the fourth day of the Priscilla Deters-Productions Plus church fraud trial, R.J. Wegner, Superintendent of North and South Dakota Nazarene churches, described in detail how he raised $628,000 for deposit in a fundraising scheme that was supposed to double the money with no risk, but in fact cost the churches and investors over $500,000 in losses.

Deters told Wegner, as she told others, that the money for her “matching gifts” came from the profits of her several profitable businesses. Prosecutors have introduced evidence that no such business profits existed. Deters is being tried on 13 counts of wire and mail fraud in connection with the scheme.

Wegner was one of a parade of Nazarene pastors who told of losing money in the scheme, as the prosecution completed its case Friday.

Wegner acknowledged that in assembling and sending the money, he ignored cease and desist orders in both Dakotas. He also stated that he aided Deters in evading the terms of a California cease and desist order. At Deters’ request, he said, he sent much of the money to the Foothills Community Church of the Nazarene in California, which then deposited it with Deters. In her records it was described vaguely as “the Dakota Project.”

Asked by prosecutors why he did this, Wegner replied that this was the first time he had been involved in such a venture, and “You could say I was rather innocent, and maybe a little on the dumb side.”

Wegner’s intense early enthusiasm for Deters’ program was shown in several letters shown him by defense attorneys. “Whatever it takes, be there,” he wrote to pastors in October, 1991, referring to a series of five meetings he set up for a representative of Deters, Charles “Chuck” Crosby. In another letter he urged churches to borrow certificates of deposit from their members to join the program; but Wegner testified that he later retracted this advice.

Wegner asserted that Deters and Crosby repeatedly assured him that while their matching gifts were not guaranteed, all their deposits would be kept safe in separate certificates of deposit, which would not be used by Deters in her business. Wegner said he once asked Deters, at a conference of Nazarene superintendents, if their deposits would be safe in the event of her death in a plane crash. Deters assured him that it would be. A

s time passed, Wegner said, “so many red flags went up,” that he finally began to suspect that “maybe we’d been had.” He said he wrote Deters many letters, and called her numerous times, requesting return of their money, without success.

Wegner also described how Deters urged him in 1994 not to cooperate with investigators from California and Kansas who were examining her business, calling them agents of the great enemy, and assuring him that the Kansas investigator, Gary Fulton, would soon be out of a job.

(Fulton, an Investigator for the Kansas Securities Commission, is still in his post. He has been attending the trial, and testified in detail about Deters’ bank and business records earlier in the week.)

According to Wegner, Deters repeatedly stated that only those churches who “stayed faithful” to her would get their money back.

Earlier this week, Wegner told a reporter for The Grand Forks (ND) Herald that this experience “hasn’t affected us at all.” Following his testimony on Friday, however, he acknowledged to this reporter that the experience had been “an awful ordeal.”

Charles Crosby, a sometime Nazarene pastor and Deters’ former representative who described the program to Dakota Nazarenes, testified earlier in the day. He said it was important to him to be able to tell prospective investors that their deposits would be kept safe in certificates of deposit in their name, and he was repeatedly assured by Deters that this was the case.

Asked if he would have represented her program if he had known she was commingling deposits and spending them on personal and family expenses, Crosby emphatically and repeatedly responded, “Never.”

Deters fired Crosby in February, 1992, not long after the North Dakota cease and desist order was reported in The Grand Forks Herald. But Crosby said he was by then becoming very uncomfortable with the program, because Deters was not supplying depositors with timely reports. He added that by then Deters had stopped paying him his agreed upon fee of $6000 per month.

Other witnesses on Friday told stories similar to Wegner.

Bruce Guyot, an Oklahoma City Nazarene pastor, described how his church lost its $55,000 investment with Deters, even after he heeded her request and refused to cooperate with investigators, whom Deters said were agents of Satan.

Allen Daz, a Nazarene minister from Albuquerque, New Mexico, invested $154,800 with Deters in 1992, part in her matching program and part in what he thought was an electronic sign business. He was supposed to receive $5400 per quarter in ionyterest payments. He received exactly one such payment, despite numerous requests. After a request in September, 1995, Deters warned him that if he went to the authorities, he would lose all his money.

Will Haworth, a Nazarene pastor from Hays, Kansas, told how his church sent in $37,500 to Productions Plus in December, 1991. According to Haworth, Priscilla Deters reported a year later their funds had been doubled by a “matching gift” to $75,000. The church sent $8800 more in 1993, hoping to use the additional matching funds to construct a special room in their church as a memorial to a much-loved member.

Haworth testified that Deters warned him in 1994 that only churches who refused cooperation with investigators would get their money back. Nevertheless, in 1995, Haworth gave a statement to California authorities describing his church’s experience. His church has received none of their investment back, Haworth stated. Their investment, totaling $46,300, is gone.

Charles “Chuck” Millhuff, an evangelist from Olathe, Kansas, described how he borrowed $200,000 from supporters of his ministry to take advantage of what he saw as an opportunity to expand his work. Instead, he wound up having to mortgage his home and automobile, and borrow from friends, to cover the resulting debts when the promised “matching gift” never appeared.

“Was this a humiliating experience for you?” Prosecutor Annette Gurney asked.

“Utterly,” Millhuff replied.

In each case, as throughout the trial thus far, Deters’ defense attorney Steve Gradert challenged the ministers’ understanding of the written agreements they signed with Deters and Productions Plus. He pointed out that the agreements did not use the phrase “certificate of deposit” anywhere.

Prosecutors responded by pointing to a “status line” on each agreement which indicated that the deposits were designated as “non-expendable/restrictive.”

Previous testimony and evidence has shown that Deters used the churches’ deposits for her personal expenses, gifts for family members, nursing care for her elderly mother, and other business expenses.

Gradert also asked Wegner and the others if they had agreed to promote some of Deters’ various business ventures as part of their contracts with her; all said they had not, though Buy paracetamol she had discussed the idea with some as “brainstorming.”

The prosecution completed its case Friday. The defense will call its first witnesses on Monday.

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