Ousted bishop pleads guilty to defrauding historically black churches

OAKLAND, Calif. (CN) — After three years of fighting his case in federal court, a former bishop of the historic African Methodist Episcopal Zion Church pleaded guilty on Tuesday to defrauding congregations throughout California to the tune of more than $14 million in loans obtained by fraudulently mortgaging church properties.

Staccato Powell, 65, entered his new guilty plea at a hearing before U.S. District Judge Jeffrey S. White in Oakland, California.

“Are you pleading guilty of your own free will because you are, in fact, guilty of these charges?” White asked the former church leader.

“Yes, sir,” Powell responded.

As part of his plea agreement, the former church leader pleaded guilty to four criminal charges, including conspiracy to commit wire fraud and mail fraud in violation of federal law.

Shortly after being elected bishop in 2016, Powell formed a business entity called Western Episcopal District, Inc. of which he was the CEO. In 2017, he began instructing his co-conspirators to execute loans to fund WED Inc., using the deeds of several church properties as collateral for the loans.

The properties, located in Oakland, San Jose, Palo Alto and Los Angeles, among other areas, were re-deeded without their congregations’ knowledge.

“In essence, I utilized false statements to leverage collateral against these entities without their consent,” Powell told the judge.

Powell then diverted some of the funds borrowed by WED Inc. for his personal benefit, including the purchase of property in North Carolina for two of his children and a $14,000 payment for mortgage debt that he owed on a residence in North Carolina.

The courtroom was packed with attendees, most of them victims from Powell’s former congregations. The ex-bishop headed congregations in roughly a half dozen western states before he was suspended and disrobed in 2021 following a church trial that found him guilty of mishandling millions of dollars.

Several of Powell’s former flock rose from the audience to give statements about the impact that Powell’s fraud scheme had on their churches and their lives.

“People left the church. They felt betrayed. I felt betrayed,” said Audrey Fambro, a congregant from San Jose. “I was ashamed of the church leadership who failed to protect us.”

Others vouched that Powell’s actions have left them with financial scars that still linger to this day. In the aftermath of Powell’s fraud scheme, many of his former churches had to cut programs, lost their 501(C)(3) nonprofit status and had trouble making necessary repairs. Some have also faced bankruptcy proceedings.

“After all the loans happened to us, we had nothing,” said Forrest Williams, a 56-year member of the AME Zion Church in San Jose. “We were very well thought of as a financial institution, a service institution.”

Powell’s plea agreement proposed a sentence of time served, plus 18 months of house arrest and three years of supervision, with a restitution between $3 million and $12 million to be paid.

However, many congregants in the courtroom disagreed with what they saw as a light sentence.

“A light sentence would send the message that exploiting faith for personal gain would be somehow less than other forms of fraud,” Gloria Clements White, a congregant from AME Zion’s branch in San Jose.

The judge seemed to agree, noting he has the authority to reject the proposed sentence if it was too lenient.

“In this case, where there is such a community interest, I’m going to want to hear some justification for why this plea agreement should be accepted,” the George W. Bush appointee said.

White also questioned a significant amount of missing money in the case, which he said has not yet been returned to the churches.

According to Justice Department officials, WED Inc. listed 11 churches in California, Arizona and Colorado among its assets when it filed for Chapter 11 bankruptcy in 2020, as well as a parsonage and Powell’s official residence. The petition stated that WED, Inc.’s real property was worth over $26 million, with debts totaling over $12 million.

“One of the things I’m going to want to know is — what happened to the money?” the George W. Bush appointee said to applause from congregants in the courtroom.

Despite the setbacks they suffered at Powell’s hands, AME Zion Church members seemed confident that his upcoming sentencing would heal their congregation and that bright times were on the horizon for their community.

“Through it all, we are still a Christ-centered church — a beacon of hope for our Oakland community,” Oscar William Russell, an 82-year member of the Greater Cooper AME Zion Church in Oakland, California.

Powell is scheduled to be sentenced on Sept. 23, 2025.

Powell was selected as bishop of the Western Episcopal District of the AME Zion Church in 2016.

Shortly after his selection, Staccato and his co-conspirator, lay leader Sheila Quintana, took out high-interest loans from private lenders and used the funds for personal purchases, including possible cash payments to Quintana’s spouse.

A federal indictment against Powell was unsealed in January 2022.

Staccato was arrested in Wake Forest, North Carolina in early 2022 and made his initial appearance in federal court in the Eastern District of North Carolina. Quintana was arrested in Vallejo and appeared in court in Sacramento.

Quintana took a similar plea agreement to Powell in April.

Before accepting their plea deals, Staccato and Quintana faced charges of one count each of conspiracy to commit wire fraud and mail fraud and two counts each of wire fraud. Powell was also charged with one count of mail fraud. Each count carried a maximum federal prison sentence of 20 years.

AME Zion Church traces its history to 1796 and has about 1.4 million members worldwide.

This case was filed in the Northern District of California and heard at the Ron V. Dellums Federal Courthouse in Oakland, California.