Tuesday, September 13, 2005
Investors won't see much of money given to 'pastor'
Roanoke, Virginia - William Thomas Warren, a self-described "financial pastor" who preyed on those who prayed, cheated his faithful investors out of nearly $7million, a federal judge has determined.
Convicted earlier this year of running a scam aimed at Christian investors, Warren now has assets of just $647,285 to be divided among his victims, Magistrate Judge Michael Urbanski found in a report filed Friday in U.S. District Court in Roanoke.
That means more than 100 people who were once promised a 40 percent return on their investments must now settle for 9 cents on the dollar.
"There is little doubt that the victims will feel less than satisfied with any allocation of these funds," Urbanski wrote in the report, which will be used to mete out what little restitution Warren can make.
Warren will face up to 21 years in prison when he is sentenced next month.
Federal prosecutors had estimated that Warren took up to $20 million from more than 140 investors over the past decade. But Urbanski settled on a more conservative figure of $6,986,071.55. The smaller sum reflects only the shortfall in returned principal and does not take into account interest or the promised return on investments.
With much of Warren's ill-gotten gains either spent or unaccounted for, any hopes his victims had for full restitution were dimmed by Urbanski's report.
As Assistant U.S. Attorney Jennie Waering put it in a letter to investors: "There is no pot of gold in this case."
Culled from eight boxes full of financial claims and investigative files, Urbanski's 24-page report is the first draft of a restitution plan that will not be completed until Warren is sentenced Oct. 24. Under Urbanski's plan, 98 investors will receive about 9 percent of what they lost, which in some cases topped $400,000.
In what he called a "grim picture of dashed expectations," Urbanski wrote: "there simply is not enough money available to allow the victims to recover their principal, much less any investment return."
The judge decided the most fair plan would be to divvy up Warren's assets based on the amount of each investment. For example, those who lost $100,000 will receive 100 times the restitution of those who lost $1,000.
According to earlier testimony, Warren targeted people at churches and religious organizations across the United States, pitching himself as their "financial pastor." His Web site promised a way for investors to find "godliness in their finances."
Some of his victims were as far away as Washington state. Others were members of Rainbow Forest Baptist Church in Troutville and Shenandoah Baptist Church in Roanoke County.
In reality, the 53-year-old was running a Ponzi scheme - using new money from recently recruited investors to pay back his older investors. Authorities estimate that he paid back about half of what he took in, lost some on the futures market and used the rest to raise his family, pay for a home in Botetourt County and send his children to college. In May, Warren pleaded guilty to two counts of mail fraud, securities fraud and embezzlement.
While some victims have speculated that Warren hid a fortune in offshore accounts, "no evidence has been presented that such accounts exist," Urbanski wrote.
James Cargill, a Roanoke attorney who represents Warren, said he and co-counsel Brad Braford have some questions about the magistrate judge's report that may be addressed at a hearing scheduled for Wednesday.
See also, the never-ending chronicle of church-related crime.