Alameda Resident Sentenced To Two-And-A-Half Years In Prison And Ordered To Pay Nearly $1.5 Million In Restitution To Victims Of His Ponzi Scheme
OAKLAND – Staccato Powell and Sheila Quintana were arrested and appeared in federal court today to face conspiracy, wire fraud, and mail fraud charges stemming from an alleged fraudulent scheme committed upon congregations of the AME Zion Church in California and private lenders, announced United States Attorney Stephanie M. Hinds and Federal Bureau of Investigation (FBI) Special Agent in Charge Craig D. Fair.
According to the federal indictment filed January 6, 2022, and unsealed today, Powell, 62, of Wake Forest, North Carolina, and Quintana, 67, of Vallejo, were officers of the Western Episcopal District, Inc., an entity formed by Powell and Quintana in 2016 after Powell’s selection as bishop to the Western Episcopal District of the African Methodist Episcopal Zion Church (AME Zion Church), an historically African-American denomination of approximately 1.4 million adherents worldwide tracing its history to 1796. The indictment alleges that Powell and Quintana conspired to defraud AME Zion Church congregations in Oakland, San Jose, Palo Alto, and Los Angeles by re-deeding the local congregations’ properties in the name of WED, Inc. The indictment alleges that, prior to Powell and Quintana’s actions, these congregations had little or no mortgage debt on their local church properties, to include sanctuaries, residences for pastoral staff, and other structures used by the local congregations for religious purposes, and in some cases, the congregations had many years earlier paid off their mortgages.
The indictment further alleges that Powell and Quintana used false statements and material omissions to obtain the grant deeds from local pastors, then used fake resolution documents purporting to memorialize the assent of the local congregations to new mortgages on the local church properties. In fact, the local congregations did not authorize the new encumbrances on the local church properties. The indictment further alleges that through WED, Inc., Powell and Quintana conspired, along with others not named in the indictment, to extract cash proceeds by using the fake resolution documents to obtain mortgages from private lenders, usually on terms unfavorable to the borrower. Powell and Quintana did not inform the private lenders of the true facts, and they did not inform the local congregations of the new mortgages using the local church properties as collateral. The indictment alleges that after taking control of the church properties, Powell, Quintana, and others used the real estate as collateral to obtain high interest loans, exceeding $14 million in net proceeds. The indictment further alleges that Powell and Quintana diverted funds from the loans for their benefit, including the acquisition of properties in North Carolina by Powell, retiring mortgage debt on Powell’s personal residence in North Carolina, and cash payments to Quintana’s spouse. On July 30, 2020, WED, Inc. filed for Chapter 11 bankruptcy protection and listed eleven churches in California, Arizona and Colorado among its assets.
In sum, the indictment charges Powell and Quintana each with one count of conspiracy to commit wire fraud and mail fraud, in violation of 18 U.S.C. § 1349, and two counts of wire fraud, in violation of 18 U.S.C. § 1343. In addition, Powell is charged with one count of mail fraud, in violation of 18 U.S.C. § 1341. The maximum statutory sentence for violations of 18 U.S.C. § 1341, 1343 or 1349 is 20 years in prison, a fine up to $250,000, and three years of supervised release following prison. However, any sentence following a conviction would be imposed by a court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Powell was arrested today in Wake Forest, North Carolina and made his initial appearance in federal court in the Eastern District of North Carolina. Quintana was arrested today in Vallejo, Calif., and made her initial appearance in Sacramento. The defendants were ordered to appear for their initial appearances in the Northern District of California via Zoom on February 2, 2022, before the Honorable Kandis A. Westmore.
The charges contained in the criminal indictment are only allegations. As in any criminal case, the defendant is presumed innocent unless and until proven guilty in a court of law.
This case is being prosecuted by the Oakland Branch of the U.S. Attorney’s Office and is the result of an investigation by the Federal Bureau of Investigation with assistance from the Santa Clara County District Attorney’s Office.