Former AME Zion Bishop Charged In Fraud Scheme Targeting Bay Area Congregations

SAN JOSE (CBS SF) — A former bishop of the African Methodist Episcopal Zion Church was arrested along with his alleged co-conspirator Tuesday by federal authorities in connection with a fraud scheme that left congregations in Oakland, San Jose and Palo Alto burdened with massive mortgage debts.

U.S. Attorney Stephanie M. Hinds and FBI Special Agent in Charge Craig D. Fair said that Staccato Powell and Sheila Quintana made their initial federal court appearances after their Tuesday arrest on conspiracy, wire fraud and mail fraud charges.

"It was a massive scheme to defraud the membership of that property," the Rev. Jeff Moore told KPIX 5.

According to the federal indictment unsealed Tuesday, the 62-year-old Powell, of Wake Forest, North Carolina, and Quintana, a 67-year-old Vallejo resident, were officers of the Western Episcopal District, Inc., an entity formed by Powell and Quintana in 2016 after Powell's selection as bishop to the Western Episcopal District of the African Methodist Episcopal Zion Church.

The indictment alleges that Powell and Quintana conspired to defraud AME Zion Church congregations in Oakland, San Jose, Palo Alto and Los Angeles by illegally re-deeding the local congregations' properties.

"The banks or the finance companies need to go after those people who received the funding and have the funding and not after the church, not after this retired congregation of these good citizens in the city of San Jose," Moore said.

Moore said he was contacted by members of San Jose's First A.M.E. Zion Church distraught upon learning that Powell had plunged the church into debt. The leader said he reached out to former Bishop Powell to see if the situation could be resolved amicably somehow and when that failed turned the information over to the Santa Clara County District Attorney's Office. Federal prosecutors would eventually take over the case given the sweeping, multi-state scope of the alleged conspiracy.

Prior to Powell and Quintana's actions, federal prosecutors said, the congregations had little or no mortgage debt on their local church properties including sanctuaries, residences for pastoral staff and other structures. In some cases, the congregations had paid off their mortgages years ago.

The indictment further alleges that through the Western Episcopal District, Inc., Powell and Quintana conspired — along with others not named in the indictment — to extract cash proceeds by using the fake documents to obtain mortgages from private lenders, usually on terms unfavorable to the borrower.

Powell, Quintana, and others used the real estate as collateral to obtain high interest loans exceeding $14 million in net proceeds.

Federal prosecutors said the pair diverted funds from the loans for their benefit including the acquisition of properties in North and cash payments to Quintana's spouse.

On July 30, 2020, WED, Inc. filed for Chapter 11 bankruptcy protection and listed eleven churches in California, Arizona and Colorado among its assets.

"This stuff has to be adjudicated. I get all of that, but it's a darn shame. It's just sad that these folks have to go through this," says Michael Cheers, a SJSU Journalism Professor who has attended the church.

Powell was arrested Tuesday in Wake Forest, North Carolina and made his initial appearance in federal court in the Eastern District of North Carolina. Quintana was arrested in Vallejo and made her initial appearance in Sacramento.

Devin Fehely contributed to this report.

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