Could This Charity Fraud Be Exorcised With More Scrutiny?

By Gary Snyder

As the pastor of the oldest black church in Los Angeles, the Rev. John J. Hunter earned a generous salary, lived in a $2-million home and drove a Mercedes-Benz paid for by the church. His wife, Denise, earned $147,000 a year running nonprofit organizations connected to the 19,000-member congregation.

The First African Methodist Episcopal Church owes nearly $500,000 to creditors. Some vendors say they have not been paid in more than a year.  In addition to the church's sizable debt, a lawsuit said recorded judgments against the church total an additional $200,000. A civil lawsuit filed by the church this week accuses the former pastor, his wife and a small "cabal" of church leaders of "holding dictatorial control over [the church] … for their own personal gain — both financially and for self-aggrandizement."

A 14-page civil lawsuit filed against the Hunters is filled with allegations of improprieties. The lawsuit alleges that Denise Hunter orchestrated a "coup" to seize control of the nonprofits that she ran "as her own personal fiefdom." Federal tax records show the nonprofits have assets worth several million dollars. One day after Hunter was moved from the Los Angeles church, Denise Hunter filed documents with the California secretary of state's office, appointing herself the corporations' new "agent for service," allowing her to act on behalf of the organizations, according to the state agency. The lawsuit alleges that she removed all the corporations' files from church offices and told 100 employees that she — not the new pastor — was the chief executive. Since then, she has denied the church access to the financial records, the lawsuit states.

In late October, Bishop T. Larry Kirkland unexpectedly transferred Hunter to a 650-member congregation in San Francisco. (LAT)

Nonprofit Imperative gathers its information principally from public documents...some of which are directly quoted. Virtually all cited are in some phase of criminal proceedings; some have not been charged, however. Cites in various media: Featured in print, broadcast, and online media outlets, including: Vermont Public Radio, Miami Herald, National Public Radio, Huffington Post, The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), FOX2, ABC Spotlight on the News, WWJ Radio, Ethics World, Aspen Philanthropy Newsletter, Harvard Business Review, Current Affairs, The Chronicle of Philanthropy, St. Petersburg Times, B, USA Today Topics, Newsweek.com, Responsive Philanthropy Magazine, New York Times...and many more Nonprofits: On the Brink (2006) Silence: The Impending Threat to the Charitable Sector (2011)