Member Of Secretive Church Set To Enter Plea In Fraud Case
A member of a secretive North Carolina church will enter a plea on a federal fraud charge as part of an investigation into an unemployment scheme benefiting businesses with ties to the congregation, according to court documents.
Diane McKinny is scheduled for a plea hearing Friday in Asheville on a federal charge of making a fraudulent claim for unemployment benefits, according to a court filing this week.
Prosecutors allege that McKinny used tax reporting software to help prepare workers' unemployment claims while she was corporate secretary for a business owned by Kent Covington, who was also a minister at the Word of Faith Fellowship in Spindale.
"In reliance on McKinny's submissions, (government officials) caused the payment — ultimately, from federal funds — of substantial benefits to which the claimants were not, in fact, entitled," prosecutors wrote in a court filing Tuesday.
An attorney for McKinny didn't immediately return email and phone messages seeking comment.
Prosecutors have said Covington's business Diverse Corporate Technologies laid off employees in 2008 so they could collect unemployment benefits. But the employees continued to work at the company, with government money replacing their salaries and essentially giving the business "free labor," according to court documents.
Covington used his position as a church leader to coerce employees, many of whom were members of the congregation, to comply, prosecutors say.
Covington and McKinny also encouraged other businesses owned or managed by church members to manipulate unemployment benefits in a similar way, according to the court documents filed this week. Prosecutors wrote this week that the schemes at multiple businesses cost the government hundreds of thousands of dollars.
Covington was sentenced last month to 34 months in prison on a charge of conspiracy to commit mail fraud. Two others listed on a church website as ministers have been sentenced to probation after admitting fraud at a podiatry clinic.
The court cases are the latest developments in the investigation by The Associated Press that, beginning in 2017, documented claims of physical and emotional abuse at the church. AP also reported that authorities were looking into the unemployment claims of congregants and their businesses.
Former members have told AP that congregation leaders encouraged the schemes to help the businesses survive the economic downturn and keep money coming into the church.