(AP) — The leader of a secretive church in North Carolina has been named in federal court records as someone who “promoted” an unemployment fraud scheme involving businesses owned by members of her congregation.
Jane Whaley, leader of the Word of Faith Fellowship, was named in a document filed Thursday in U.S. District Court in Asheville that describes a fraud conspiracy charge faced by one of her trusted advisers, Kent Covington.
In a 2017 investigation into claims of physical and emotional abuse at the church in Spindale, The Associated Press reported that authorities were looking into the unemployment claims of congregants and their businesses.
Since then, four people have been charged in the case, including two who have pleaded guilty.
Whaley was named in a document that describes the fraud conspiracy charge faced by Covington, a church minister. His lawyer, Stephen Cash, said his client was expected to plead guilty in the case next week.
But, he added, Covington’s pleading is not an “admission that Jane Whaley instructed him to act or that Kent’s actions were designed to afford some benefit to Mrs. Whaley or Word of Faith Fellowship as an organization. This is not the case, and Kent would dispute any such assertion or characterization.”
Covington and Diane Mary McKinny, both of Rutherfordton, North Carolina, were indicted in June on one charge each of conspiracy to commit mail fraud.
Prosecutors say Covington and McKinny decided to lay off employees at one of Covington’s businesses so they could collect unemployment benefits in 2008 when the company was struggling financially. But the employees continued to work at the company, Diverse Corporate Technologies. They later put the scheme into place at Covington’s other business, Integrity Marble & Granite. Covington then implemented a variation of the scheme at Sky Catcher Communications Inc., a company he managed, prosecutors say.
After starting the scheme at Diverse Corporate Technologies, Covington, McKinny, Whaley and others “promoted variations of the scheme to other businesses,” the court filing said.
“These conspirators promoted the scheme as a way for (the church) community businesses to weather the financial downturn,” the document said.
Cash said his client made “false statements” to the North Carolina Employment Security Commission, which oversees unemployment benefits.
“He accepts responsibility for his actions and continues to cooperate fully with the government,” Cash said.
Whaley’s attorney, Noell Tin, said Whaley was not involved in the case.
“Ms. Whaley strongly denies any insinuation that she was somehow involved in Mr. Covington’s offense, as does Mr. Covington,” he said.
The scheme resulted in more than $250,000 in fraudulent claims between November 2008 and March 2013, according to court records. The conspiracy charge carries a maximum penalty of 30 years in prison and a $1 million fine.
Most employees were members of the Word of Faith Fellowship. Prosecutors had previously said Covington used his leadership position in the church to force them to comply.
“This is a step in the right direction,” said Benjamin Cooper, an attorney and former Word of Faith Fellowship member who has been pushing federal authorities to investigate the church’s activities. “But there’s still more that needs to be done. We hope they continue. Too many people are being hurt.”
Covington spent eight months in a North Carolina prison in 1974 for breaking and entering, as well as larceny, and later joined the church.
His wife, Brooke Covington, is one of Whaley’s most trusted confidants.
Brooke Covington is facing unrelated state charges that she and other members of the church assaulted a congregant in an effort to expel his “homosexual demons.”
Two other ministers, Jerry Gross and his son, Jason Lee Gross, pleaded guilty on May 25 to wire fraud related to unemployment benefits at a podiatry clinic in Forest City, North Carolina.
Former members said Whaley promoted the scheme as “God’s plan” to help the businesses survive the economic downturn and keep money coming into the church.
The unemployment allegations were uncovered as part of the AP’s ongoing investigation into Word of Faith, which had about 750 congregants in rural North Carolina and a total of nearly 2,000 members in its branches in Brazil and Ghana and its affiliations in other countries.
In February 2017, the AP cited 43 former members who said congregants were regularly punched and choked in an effort to beat out devils. The AP also revealed how, over the course of two decades, followers were ordered by church leaders to lie to authorities investigating reports of abuse.
AP later outlined how the church created a pipeline of young laborers from its two Brazilian congregations who say they were brought to the U.S. and forced to work for little or no pay at businesses owned by church leaders.
Those stories led to investigations in the U.S. and Brazil. In March, Brazilian labor prosecutors filed suit to close one of the churches and its school in Sao Paulo, saying its leaders “reduced people to a condition analogous to slavery.”