ATLANTA (AP) — A businessman accused of swindling churchgoers in an investment scheme was arrested Tuesday on fraud charges, federal prosecutors in Atlanta said.
The arrest of Ephren Taylor II, 31, came a week after he was indicted by a federal grand jury, prosecutors said. Taylor and a co-defendant are charged with conspiracy and multiple counts each of mail fraud, wire fraud, and money laundering, according to the indictment.
Taylor, former chief executive of North Carolina-based City Capital Corporation, is accused of convincing members of mostly African-American church congregations across the country to invest in small businesses — such as juice bars and gas stations — when prosecutors claim he really used their money to pay personal expenses.
Taylor and another former City Capital executive, Wendy Jean Connor, conspired between April 2009 and October 2010 to defraud hundreds of investors out of millions of dollars, prosecutors said, adding that Taylor traveled the country presenting "Building Wealth Tour" seminars to churchgoers. Authorities say Taylor, originally of Overland Park, Kansas, told investors a portion of the company's profits would be donated to charity.
Aside from pushing fraudulent small business investments, prosecutors say Taylor also convinced victims to invest in sweepstakes machines — computers loaded with games that allow players to win cash prizes. Taylor told victims the machines would generate 300 percent returns on their investments and that the machines were 100 percent risk free.
Taylor also convinced investors to use self-directed IRAs to make their investments and used victims' retirement money to pay City Capital's business expenses, personal expenses and pay returns to some investors, prosecutors said.
The Securities and Exchange Commission filed a complaint in April 2012 accusing Taylor and Connor of defrauding investors out of more than $11 million. A federal judge ordered City Capital to forfeit nearly $15 million in profits, interest and civil penalties.
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