During a hearing of the bankruptcy case of the Charles Street African Methodist Episcopal Church, the church’s pastor, Rev. Gregory Groover, admitted that the church had misused $825,000 of restricted endowment funds over a period of five years to meet expenses.
Groover testified all day in court during the hearing on Monday this week and the amount he declared was well in excess of the figure that church leaders shared during a previous hearing in U.S. Bankruptcy Court in Boston.
Apparently Charles Street AME Church owes almost $5 million in loans to One United Bank and the bank’s lawyer, Lawrence Edelman, questioned Groover about the negative cash flow figures shown on monthly financial statements of the church. Edelman said that by spending the Lilly Endowment funds, which were earmarked for a residency program for pastors in training, the church had committed fraud.
However, Groover doesn’t agree with Edelman. He admits that what the church did was wrong and they should not have misused the funds. But he also stated that he is no criminal.
“I’m deeply sorry for that but I would not consider it a fraud,” Groover said.
According to Ross Martin, lawyer for Charles Street AME, the money had been used to pay back a large amount to the bank and to cover other expenses. Last year, after One United bank threatened to auction off the church, Charles Street AME filed for bankruptcy protection.
New rules have been introduced within the church to make sure that they don’t land in any more hot water. One of which is a requirement stating that instead of the pastor signing checks, it will now be done by two people.
According to Groover’s testimony the church has also taken other measures to try to get back on their feet, including the reduction of staff, frozen hiring and pay cuts.
Charles Street AME, as part of its restructuring plan, has offered to turn over a house in Milton, that is empty and in need of repairs, to the One United bank. The house was formerly used by pastors.