ATLANTA — A Kansas man accused of defrauding Georgia churchgoers, including members of New Birth Missionary Baptist Church, during his “Building Wealth Tour” has been arrested on a federal indictment, the U.S. Attorney’s Office in Atlanta announced Tuesday.
Ephren Taylor II, at the time chief executive officer of City Capital Corp. of Overland Park, Kansas, is accused of defrauding investors of more than $5 million. Prosecutors also named Wendy Connor, the former COO of City Capital, as a co-conspirator.
Prosecutors said more than 80 investors in Georgia, including members of New Birth in Lithonia, lost at least $2 million during Taylor’s wealth management seminars, which allegedly targeted church congregations from at least April 2009 through October 2010.
The U.S. Securities and Exchange Commission accused Taylor of running a Ponzi scheme, using investors’ money to pay off early investors and to hide investment losses.
New Birth, headed by Bishop Eddie Long, reportedly reached a confidential financial settlement with a dozen former members who said Long encouraged them to invest money with Taylor despite being told the investor was running a capital deficit. The members said they lost more than $1 million dollars.
Efforts were being made to reach New Birth for comment on the latest developments. In a Channel 2 Action News report last year, Long referred to Taylor as "my friend, my brother, the great Ephren Taylor."
A federal judge in Atlanta last year also concluded Taylor and his former company must repay former investors more than $14.5 million, including interest.
Taylor allegedly persuaded members to invest retirement savings in promissory notes used supposedly to fund small businesses and to invest in “sweepstakes machines.”
“The investments he pitched proved to be worthless, along with his promises,” U.S. Attorney Sally Quillian Yates said Tuesday in announcing Taylor’s arrest.
Prosecutors said many victims transferred retirement savings to self-directed IRAs. Taylor and others, however, actually controlled the IRA funds and used the money to pay business and personal expenses, and to pay earlier investors, prosecutors said.
Investors were told their funds were being used to invest in laundries, juice bars, gas stations and other small businesses, and that the promissory notes used would be profitable.
Taylor also pushed investments in computerized “sweepstakes machines” loaded with various games that allow players to win cash prizes. He allegedly claimed the machines were 100 percent risk free and that the average machine generated 300 percent investor returns.
Prosecutors said Taylor falsely reported revenues and returns from the investments, and falsely claimed 20 percent of profits were donated to charity.
New Birth released the following statement Tuesday afternoon:
“It has always been our prayer for a resolution to this matter in which many lost their investments. Our hearts go out to anyone who suffered losses, and we pray for healing.”
The Atlanta Journal-Constitution contributed to this report.
WSBTV
