X
Chuck Hise was one of the doubters. He was also among Priscilla Deters’ first targets.
Hise is Director of Quaker Gardens, the retirement community operated by Friends Church-Southwest Yearly Meeting in Stanton, California. Quaker Gardens is where Eugene Coffin is now being cared for.
Hise remembers meeting Deters as long ago as 1984, when Productions Plus was newly-minted. She made a pitch at a dinner meeting in a restaurant in Whittier, before a dozen or more people from the yearly meeting. Eugene Coffin came with her to the session.
“She talked about her desire to support the Friends ministries,” Hise told me. “She had a sign business, and the signs were to be sold through community involvement by churches and schools. There was profit to be made in commissions from the sales, and then ongoing profits from advertising rentals on the signs. (We will be hearing more about these signs.) From this stream of profits would come the matching gifts to double the investors’ money in a year.
It was an interesting scheme, but Hise didn’t feel he understood it completely (another common reaction).
The sticking point very likely had to do with the safety of the investors’ money. Deters assured people their money would be kept safe and untouched while it waited to be doubled.
But if so, why did they need to make a “deposit” with her at all?
Maybe, Hise thought he also heard, the money was actually going to be used to capitalize her business. But in that case, it wouldn’t be untouched, and it would not necessarily be safe, because small businesses fail at a very high rate.
So how could it be both safe and untouched, while at the same time providing the capital for growing Productions Plus, given the risky character of new businesses?
Deters couldn’t really have it both ways. But over the years, this was the circle that she left many people thinking was really a square.
Hise was not alone in feeling confused after this meeting; nobody nibbled then.
So Deters came back at them, every few months. Hise recalls meeting with her, at her request, as many as eight times in the next several years. He also sent her to Quaker Gardens’ Finance Committee, hoping they could understand better what she was about.
Some of his Board members were not confused at all, but downright skeptical. One doubter was Joe Coffin, a relation of Gene. Joe Coffin told me he had once worked selling advertising to small businesses, and found it a tough, competitive field where profits were not easy to come by and risks were substantial.
Nevertheless, Deters kept coming back. Hise recalled once taking two friends to meet with her; one was a business professor, the other an accountant.
They listened closely, and after the meeting, talking in the parking lot, Hise asked them, “What do you think?”
The CPA said, “Chuck, I don’t have a clue what she’s up to. I’m not saying she’s a thief or a con artist or anything. But if I was you, I’d put my money in my pocket and run.”
Hise and Quaker Gardens kept their money in their pocket until after the news of the 1989 friends ministers Conference hit. Then the Finance Committee said, in effect: “Okay. Maybe this thing is worth a try–IF we can make sure our money really is safe.”
So Quaker Gardens deposited $100,000 with Productions Plus. Priscilla Deters promised them that at the end of a year they would get a 100% match for their money, and that their money would be safe, kept in a certificate of deposit at a federally insured bank.
But Hise and his committee wanted to be sure their money was safe. Damn sure, actually, though they might not admit to using profanity about it. Hise called the FDIC to make sure the bank was insured. He also called an attorney, to double check. Finally, he went to the bank along with the chairman of his Finance Committee, and insisted that the bank give him a letter guaranteeing that no one (read: Deters) could get at that CD without his signature. In advance. Period. The bank wrote the letter.
What happened? The CD sat in the bank, safe and unmolested, for twelve months. And on the anniversary date, Hise made damn sure that the money was returned. He thinks he may even have driven to the bank himself to pick it up.
Along with the original $100,000, Quaker Gardens collected a year’s worth of bank interest.
“What about the match?” I asked. “Weren’t you supposed to double your money?”
“Nope,” Hise said. There was no sign of any match, then or later. But Hise says he didn’t care. The Board hadn’t counted on the doubling, and were simply relieved to have their money back, safe and sound.
After that, neither Chuck Hise nor any other group that was part of Friends Church-Southwest Yearly Meeting deposited any more money with Productions Plus. “I later heard indirectly that Priscilla said we hadn’t followed her plan, and that’s why we didn’t get a match.”
Although secondhand, this comment has the ring of truth. All of the many “service agreements” I have seen between Productions Plus and various churches include the following language about the accounts where the investor’s deposits are to be held:
“Signatories on said account will be designated Trustees of the Beneficiary Savings Fund.”
This language in fact gave control of the deposit to Productions Plus. It was Deters who did the “designating” of signatories, and the designee was always herself.
XI
If there were skeptics on the Quaker Gardens Board, the Friends Ministers Conference Committee was a different story. There may have been a few questions, but there evidently weren’t real doubts. After all, $50,000 was in the bank, and Priscilla Deters continued to have the enthusiastic endorsement of Eugene Coffin.
Coffin’s explanation about coupon book mailings as the source of the $50,000 grant sounds like a variation on the Savings Plus plan. But Phillip Deters, Priscilla’s son, testified that savings Plus had not continued after about 1987, and in her own account of the business, Priscilla mentioned no such campaigns. So while one can’t prove a negative, I’m doubtful there ever were any coupon booklets, or any zip codes reserved for the Friends Ministers Conference.
Besides which, the committee sent its $5700 to Deters in 1988. That was also the year Wayne Ashworth began making his quiet loans to Deters. When it came time to send the Conference a match, maybe she didn’t need Savings Plus anymore.
In any event, the Fourth Friends Ministers Conference in Denver was a success. I was there, and can testify to it. Hundreds of pastors soaked up the atmosphere and perks of the luxurious hotel; we went to many workshops, like one which touted telemarketing campaigns as a surefire way of “planting” new churches, and another about “ministering” to homosexuals who wanted to overcome their “sin.” There were banquets and impassioned sermons. I recall feeling that the conference was a bargain, that we got a lot for our money.
When we had all gone home, the conference committee basked in its success. Not only was a good time had by all; after the bills were paid, there was still $22,000 left over. The Committee looked ahead enthusiastically toward the fifth conference, planned for Orlando, Florida in 1994. It also had a new chairman: Maurice Roberts. In its euphoria, it was happy to send the $22,000 surplus back to Productions Plus, as a new deposit for future matching gifts.
Maurice Roberts had high hopes for the next conference, especially financially. Deters told him that if the committee left their $22,000 with her for four of the intervening five years, she would match the accumulated total each year, for a total of $176,000 by 1994, an 800 per cent return on their investment.
Could they really count on this bountiful amount as they drew up their next conference budget? Roberts insists that Deters assured him that they could. (Deters later said she made no such pledge; but we will get to that in due time.)
The committee figured, with that kind of cash on hand, they could be generous to the ministers who came to the 1994 conference, knowing that many were not well-paid. They made plans to reimburse the planefare of as many of the pastors who needed it, in full.
In the meantime, contemplating these figures, Maurice Roberts began to wonder if there wasn’t more money where their $50,000 had come from, for other projects beyond the Ministers Conference. After all, he had a yearly meeting to run, and it needed money too.
XII
When Andrew Jackson Bailey was three months old, in 1927, no one expected him to produce a gold mine. He wasn’t expected to live to be four months old, because he had double pneumonia.
He survived the pneumonia, but a year later was diagnosed with polio. Polio was then was feared as a plague that paralyzed both the mighty (like Franklin Roosevelt) and the humble, without hope of a cure for either. Many of its victims died. Doctors told Jackson Bailey’s family that their boy might live, but would never walk.
Bailey did walk again, but not til he was eight. In the meantime, a friend gave him a paint set, to help him fill the long hours of his confinement. Bailey not only learned to walk, but also became a self-taught artist.
He was able to marry and attend the University of Georgia, where he was fascinated by history. The subjects of his early art work are mainly religious, patriotic or both: In “Freedom,” the Statue of Liberty is shown cradling the Bible and brandishing the Cross aloft. In “Creation,” the sun and moon hover on opposite sides of a dark background, where they were just hung by God’s hands. These hands are shown poised as if to catch the new earth, which seems to have just dropped like a ripe apple from an as yet uncreated tree.
Another scene, “in God We Trust,” was widely circulated by a Pensacola, Florida promoter in a campaign to gather a million signatures on a petition to Washington. The petition aimed to keep the title phrase on U.S. money, and fend off a lawsuit by atheist Madalyn Murray to have it removed. The painting must have worked; the phrase is still there.
Despite this success as an artist, disaster hung over Bailey like a cloud: In 1960, aged thirty-three, he was felled by a heart attack, then paralyzed by a stroke.
Once again he recovered, and attributed his renewed health to divine intervention. “I made a vow then,” Bailey told me, “that if God let me live, I would show my thanks by painting the complete Life of Christ.”
He got his chance, in spades. An Atlanta attorney, John Chambers, assembled a group of investors to support Bailey in this project. They formed a company called the Life of Christ Foundation; but the backers did not want just another painting; they wanted a monument, a landmark–an attraction which could draw crowds, paying crowds.
Bailey was glad to oblige. He wanted his painting to be authentic; so he spent six years researching everything he could find about what the Holy Land looked like in the time of Christ: the fabric and weave of clothing; the architecture and materials used in ancient buildings; the colors and shapes of the trees and flowers. He went to Israel to do field work, right after the Six Day War in 1967. “There I was,” he told me, “walking past Egyptian tanks still burning, trying to see what things looked like two thousand years earlier.”
After that trip, he was ready to begin painting. The investors made sure he had top-quality materials, importing the finest linen from Belgium, and supplying Rembrandt oils. The preparations and materials cost $250,000. Even with help from several assistants, the painting took three years, and Bailey was drained by it. “I went from 152 pounds to 113 while I was doing it,” he recalls.
When his Life of Christ was completed, in 1970, it was indeed monumental: made up of fifty five panels, the work is eleven feet high and over a thousand feet long. “Three and a third football fields,” Bailey boasts. Everyone I’ve talked to who has seen it, including persons with no strong religious background, reports that the work is indeed imposing and impressive.
It was finished just in time, though, because disaster was waiting to strike again: In 1971, Bailey was accidentally shot in the chest by an antique gun he had collected. After that came a brain tumor, which was successfully removed. Bailey says he is retired now, living in a small town not far from Atlanta, where he still paints some.
Injury and illness weren’t the only calamities Bailey had to cope with. While he claimed to have retained publishing rights to the paintings, the work itself was owned by the investors. They had plans to exhibit it, and produce posters, books, and other objects. From these sales the royalties should have come rolling in for Bailey and his family.
But the backers went broke. The painting was sold two or three times, and each time the new owner lost money, and it was never exhibited, only moved from one warehouse to another. In 1980 a book of reproductions of the painting, called The Painted Word, was printed; then its backers promptly went bust as well. Angry investors quarreled among themselves, and the books sat in unopened cartons, exiled with the paintings to invisibility in a warehouse. There they languished, as Bailey labored to regain his health, and the years passed.
About the only good news for the paintings came late in the decade, when it was measured and selected for the Guinness Book of World Records in 1987, as the largest oil painting in the world. This was at least a plug that would get wide circulation. Maybe someone would read about them and rescue them from oblivion, give them their rightful place in the public eye.
One person who read about the paintings there was Priscilla Deters, or so she told Bailey later. And she decided that she was the one to bring this masterpiece into the world’s spotlight where it belonged.
In fact, in Jackson Bailey’s work she saw the opportunity she had been waiting for, the chance to visibly “raise up the King of Kings.”
XIII
“I chose to believe in her,” Maurice Roberts told me. “My premise is to take a person by faith when they say they’re a follower of Christ out to help the kingdom. I choose to do that with people, unless and until there’s evidence otherwise.”
Sure. But Roberts’ record suggests that it helps if the person to be believed has money, or seems to.
After the $50,000 gift to the 1989 Friends Ministers Conference, Roberts thought that what worked there ought to work for Mid-America Yearly Meeting too.
But he didn’t want to rush into anything. He made calls to people who had worked with her; the feedback seemed positive.
That was not enough, though. Roberts is a Christian, and he trusts in Christian witness and spiritual discernment. Once he was introduced to Priscilla Deters, she seemed like a faithful Christian. “It was unusual,” he told me, “if a month went by that Priscilla didn’t call me to tell of a blessing, or ask for prayer. Even prayer on very personal needs and concerns.”
This impressed Roberts. But he wanted another perspective, from someone he trusted. So at one point he took his wife Peggy to meet her. The two women spent a long time together, and then Peggy prayed over what she had heard. Afterward she told her husband she had been shown that Deters was a very spiritual person, one with a special call to serve, and to do so without drawing attention to herself as an individual.
Roberts also did his own work of discernment, and found a verse from the Book of Exodus decisive. In Chapter 4, when God is preparing Moses to return to Egypt and free the Hebrews from slavery, Moses asks, “What if they don’t believe me?” God tells him to use what is in his hand, namely his long wooden staff, which later performed various wonders to startle his countrymen and gain him a hearing.
Roberts concluded that he should use what was in his hand, namely the surplus funds of Mid-America Yearly Meeting, in pursuit of God’s purposes, as localized in the yearly meeting agenda of church planting, youth work, and building a new headquarters building.
He talked this idea over with the yearly meeting Trustees, who were ultimately responsible for Mid-America’s investments. There were some questions, but the glow of the $50,000 match was still bright, and he was given the green light. On December 27, 1989, Roberts sent $5,000 of Mid-America’s funds to Productions Plus. It was the first of several such checks.
Roberts did not bother to tell the Trustees about all the subsequent checks. In operational terms, he didn’t need to; he was a signatory to the Yearly Meeting’s checking accounts. And by 1991, there were new Trustees, including one named Leatha Hein, who kept asking persistent, annoying questions.
He also became an evangelist, or perhaps more accurately an agent of Productions Plus. Roberts told me that he did not try to persuade anyone to invest with her, just answered questions honestly about his experience. This statement is contradicted by letters and statements in court documents, in which he is seeking out and urging other Evangelical Quaker leaders to take part. Two examples will suffice; there are more in my files:
In February, 1991 he wrote to Richard Felix, the former President of Friends University in Wichita, who was now President of Azusa Pacific University in California:
“You may remember that many months ago, I proposed to the Finance Committee of Friends University that we look at a plan whereby a dollar-for-dollar match would be made. This is a plan through Productions Plus….It can become a significant tool for endowing a chair or some other special use. The program works!” (Azusa didn’t bite.)
Or a letter of July, 1991 to Deters on behalf of Evangelical Friends Mission(EFM), which sent–and lost–lost $10,000 it had planned to use to provide scholarships for students in its third world missions:
“I have encouraged the [EFM Finance] committee to consider this opportunity for several months.”
Roberts later vehemently insisted that he never, ever received a penny from Deters as commission for these sales efforts. People in Kansas say they believe him. There are no specific payments to him in her financial records, as there are each year for Eugene Coffin. But these records are not complete, as we shall see; and in this case, after all that has happened, I think the question is better thought of as unresolved.
XIV
By 1989, whatever else Productions Plus was becoming, it was definitely a family affair. Available records show that Priscilla Deters paid three of her sons, Loren, Phillip and Randy, substantial amounts of money each year between 1989 and 1994, from the accounts containing investors’ funds. Her sister, Phyllis Beaver, also received frequent payments.
Even Priscilla’s aged mother, Bessie Kuhn, shows up regularly as a payee on checks.
What were these payments for? In July 1996, Loren Deters was asked at a deposition:
Q….And to your knowledge, did [Bessie Kuhn] ever work for Productions Plus?
A. No.
…
Q. Okay. So from your recollection, she wouldn’t have worked for Productions Plus even in the mid-`80s, then?
A. No.
Q. Do you have any knowledge as to whether or not she would have invested money in Productions Plus?
A. No, she didn’t.
Nevertheless, the aged Bessie Kuhn was paid $120,695 over five years.
Deters’ generosity to her sons was likewise notable. For instance, Loren Deters was a full-time law student during the years 1991 to 1994. In those years, according to her records, Priscilla Deters paid him a total of $37,986.
What for? This is what Loren testified in 1996:
Loren Deters: …(W)hile I was in law school, my mom would ask me to look up specific issues for her….
Question: So when you would look up legal issues in law school, would you be paid for that?
Loren Deters: It was kind of a nebulous thing. I’m not sure what–there wasn’t, you know, an agreement. If you do this, then I’ll give you this.’ It wasn’t like a regular employment contract.
But I might say, Mom, you know, my financial aid ran out. Can you send me some money.’ And she’ll say, Well, I’ve got to know about this particular issue.’
So I’m not sure what the primary motivation was, if she was giving me money like a mom would give her son money, or if it was for like work that I would do.
Question: Okay.
Loren Deters: But I did have access to a great law library, and I needed the practice, for goodness sake.
His brothers were not neglected, however: Randy, Phillip and Bryan received a total of $371,426 between 1992 and 1994.
There were numerous other items; a Lexis bought at the end of 1992; $20,000 spent on dental work, and so forth.
After the search of her house, Investigator Gary Fulton of the Kansas state Securities Commission, testified that, “My review of the documents obtained from productions Plus and Mrs. Deters discloses that she spent at least $1,820,450 of funds obtained from investors in the matching gift program for expenses of Productions Plus and/or herself. That amount includes $512,250 paid to members of her immediate family….” He also noted that these totals did not include up to one third of the bank records for the years involved, because these records were missing when the house was searched.
This pattern is in rather sharp contradiction to Deters’ pledge to investors that “management costs are borne by Productions Plus. There are no other costs involved.”
However, it is a mistake to infer from these figures that Productions Plus was simply intended to enrich Deters and her family. As the financial records also show, in these same years she spent hundreds of thousands of dollars, not on herself, but on her plans to “lift up the King of Kings.” especially through the work of Jackson Bailey. This effort, I believe, became the real driving force behind her activities.
It is speculation, but plausibly such, that she may have rationalized that she needed to use investor’s money as she did in order to get where she needed to be to pay them off the way she had promised. She wouldn’t have been the first to make such rationalizations. Or for that matter, the first to succeed.
And for that matter, she might well have succeeded, if it hadn’t been for an unlikely adversary, one undoubtedly selected by Providence, who didn’t want the job of bringing her down, and did not in fact realize that’s what he was doing.
XV
How many Catholic priests can there be who are nicknamed “Bubba”?
Robert Graves is one. He earned the nickname, by virtue of his roots, and particularly by his career before taking the cloth.
His family were among the original white settlers of the central Florida area where he was raised, “right south of Orlando, in Osceola County, where the railroad tracks crossed.” His father’s background is Old Virginia (his son is named Robert Lee Graves), and he owned a construction company which prospered and brought affluence and respect to the family.
Robert Graves thus grew up a rich kid, “around the pool” he puts it, and by his own account, was something of a hellion as a teenager in the late 1960s: He had his own airplane at 16. He drove fast cars, says he was a lady’s man. Bubba, indeed.
But he also tells of another, buried side of his personality, which burst through the surface one night at a drive-in. He was there with his high school girlfriend, and one of the features was, Brother Sun, Sister Moon, about the young St. Francis. Francis was also the scion of a wealthy family, who left it all behind to follow his image of “Lady Poverty.”
Watching it, Graves found himself suddenly weeping. “Everybody figured that the girl and I were going to get married and have a family there,” he told me. “But that wasn’t really me.”
Out of high school, though, he seemed headed in a respectable and promising direction: to the U.S. Military Academy at West Point in 1973. And if he didn’t ultimately stay in the military as a career, there would be the family construction company.
Where could he go from there? Well, look what happened to Jimmy Carter, just to the north in Georgia, who went to the Naval academy and then came home to run the family peanut farm. The sky was the limit.
Graves’s course was perhaps just as unique, but in a very different direction. The big event of his plebe year at the academy was, of all things, a religious conversion: he left his family’s Episcopalianism to become a Catholic, and a fervent one. When his mother fell terminally ill late that year, he left west Point and the promise of a military career without regret and returned home, buried his mother, and finished college at Georgia Tech in 1977.
Over the next five years, Graves pursued both his “Bubba” lifestyle of fast cars, ladies, and work at the family firm, and a parallel spiritual quest to find out what God wanted him to do with the intense faith he had developed. He made long retreats with various orders, starting with Franciscans, and proceeding on to the stricter, more ascetic Trappists and Carthusians.
Finally, in 1982, he left America for Italy, the homeland of his new church. There he found what he had been looking for: a small religious community called the Sons of the Divine Will, based in the old roman town of Civitavecchia.
The Sons of the Divine Will was a young group, founded only in 1974. The members were mostly lay people, men and women, who pursued a kind of neo-primitive Franciscan discipline, depending on freewill donations to live, and never charging fees for their religious services–masses, baptisms, marriages.
This no-fee policy got them in trouble with local church hierarchs, who lost business to the upstarts and cried foul; but Graves is proud of it. “The church is in the hearts of the people, not in the institutions,” he affirms. Francis would understand.
Graves says he wasn’t interested in becoming a priest, but was told by those he respected that he had a vocation and should pursue holy orders. He was ordained on June 21, 1987 in Rome, by none other than Pope John Paul II.
At home, however, there were changes: his father died. What would happen to the business? There was also the matter of the estate. Graves had two sisters, and the three of them were to share a large inheritance. In his culture, however, it is up to the son to settle these things, and Graves took on the task. He wanted out of the business, and declined to take any of the money for himself; he was through with all that. But what was to happen to it?
In the end, Graves turned his share of the family estate over to the order, to help build a center for the Sons of the Divine Will in Kissimmee, his old home area. The order’s founder, Father Gustavo, lives there now. Graves says there are about a thousand members of the order in the US, Canada and Mexico, and he spends much time traveling and conducting retreats among them. He is happy with his lot.
At least, he was until October 1, 1991, when he was contacted by a stranger named Priscilla Deters. Mrs. Deters said she wanted to talk to him about some paintings.
XVI
Mark Griffin, where were you in 1991?
Griffin is president of the North American Securities Administrators Association. Its members are the financial watchdogs of the fifty state governments. On November 12, 1997 he held a press conference, to warn the public about the growing threat of “affinity group fraud.” Here is a bit of what he said:
“Religious affinity group fraud continues to be a widespread, pernicious problem…. you can trust me because I’m like you,’ continues to be the siren song of all of these con artists. But don’t be fooled. Affinity group swindlers play the loyalty angle for all it’s worth.
“To help investors guard against affinity fraud, NASAA is releasing an Investor Alert with the following tips:
— Beware of testimonials from other group members. Affinity fraud scam artists frequently pay out high returns to early investors using money from later arrivals.”
—Obtain a prospectus or other form of written information that details the risks in the investment and procedures to get your money out.
—Ask for professional advice from a neutral outside expert not in your group–an accountant, attorney or financial planner–to evaluate a potential investment. And–
—Before investing any money, call your local securities agency to learn more about the salesperson and firm. The simplest inquiry is to ask if they are registered to do business in your state. And is the investment allowed to be sold. Don’t take the word of a salesperson! Check out the investment yourself.”
In 1991, almost all of Priscilla Deters’ new clients failed to follow any of this advice. Except for at least one, whose identity we can only guess at.
This nameless person received a letter dated February 26 of that year, from one Ed Steele, an evangelical adman and direct mail consultant. The letter announced the newest wrinkle in the Productions Plus program, something called the Worldwide Community Service Charitable trust.
Later testimony suggests there was little more to this trust than one of the ninety-eight bank accounts–that, along with a letterhead, listing a Board of trustees, made up of Phyllis Beaver, Wayne Ashworth, Eugene Coffin, and another of Deters local investors, George Brown; plus Priscilla as Director. But the name makes it sound like a foundation, and Ed Steele’s letter promoted the idea in glowing terms. It is worth quoting at length, both because of the way it almost perfectly illustrates what Mark Griffin and NASAA were talking about, and because it is a fateful link in the chain of events we are following. (Note: Italics added; capitals and bold in the original.):
“After thirty years in development efforts for ministries and institutions and seven years of personal observation, I’m convinced that Productions Plus’ World-Wide Community Service Custodial Trust Fund is an…
AUTHENTIC SOURCE OF GIFT INCOME FOR NON-PROFIT
MINISTRIES WHICH IS TRULY UNIQUE
“Let me quickly explain that the WCSC Trust Fund is not an investment program, a fundraising scheme or a plan whereby something is sold to your donors….
“It is a risk-free, savings-based plan through which new money is generated and GIVEN TO YOUR MINISTRY.
“Simply put, when funds are placed in a CD with World-Wide Community Service Custodial trust in an accredited, federally-insured banking institution, interest is paid to the depositor….
“Then, for every $500 unit of the principal placed in the WCS Custodial Trust, a 100% matching grant is given to the registered beneficiary at the end of one year.
“There are no administrative costs, no fees, no commissions to middlemen and no finders’ fees. I personally receive no compensation from the WCS Custodial Trust. Furthermore, at the end of each 52-week period, several attractive roll-over options are available, some of which offer exponential increases to qualified non-profits.
“I’ve been given the unique privilege of selecting a number of non-profit organizations and ministries to whom these funds can be given. Several million dollars are available for immediate release to appropriate ministries. For this reason, we need to hear from you within thirty days. Conditions may not hold after that time….”
Among the untruths in Steele’s letter were the following: there were not “several million dollars” available for immediate release; Steele played no role in selecting participants; the program was very much an “investment,” and one that was certainly not “risk-free”.
Nevertheless, the letter had its impact. Copies of it have turned up in several court statements filed by clients in different parts of the country.
It was also important in another way: Someone who read it had sense enough to do what the NASAA Investor Alert recommended: He or she turned it over to the appropriate regulatory agency, in this case the California Department of Corporations, to find out if it was legal.
It wasn’t.
XVII
Deters did not rely on the Steele letter alone. In January of 1991 she hired Charles F. “Chuck Crosby,” a former pastor in the Church of the Nazarene from Colorado as a “consultant,” to follow up leads and make presentations, especially to Nazarene churches.
Why Nazarenes? Deters’ background was very close to, if not part of the Nazarene tradition. The Nazarene Church is an offshoot of Methodism, generally more conservative in character, favoring revivalism and devoted to the pursuit of “sanctification” or “holiness.” As a current Nazarene statement on the Internet puts it:
“The doctrine that distinguishes the Church of the Nazarene and other Wesleyan denominations from most other Christian denominations is that of entire sanctification.
“Nazarenes believe that God calls Christians to a life of holy living that is marked by an act of God, cleansing the heart from original sin and filling the individual with love for God and humankind. This experience is marked by entire consecration of the believer to do God’s will and is followed by a life of seeking to serve God through service to others.”
Most of evangelical Quakerism shows a heavy influence of this Wesleyan Holiness tradition; this familiarity undoubtedly has something to do with Deters’ inroads among Friends. Almost all her Quaker clients–or victims–were drawn from those groups most influenced by this Wesleyan Holiness tradition.
Chuck Crosby’s pay was set at $6,000 per month, not including bonuses. By the end of 1992, Deters had paid him $99,500.
He earned it. Over the next two years more than a score of Nazarene churches in at least ten states poured money into Productions Plus; two million dollars is a reasonable estimate. In North and South Dakota, Nazarene churches bundled their investments together, and what Deters called “the Dakota Project” brought in over half a million dollars. A list of the churches was seized in the search of Deters house; but there were also numerous individuals who invested with her, and no complete list of their names has turned up.
Among Friends, Deters had energetic recruiting help from three principle allies: Eugene Coffin in California, and in Kansas, two key figures in Mid-America Yearly Meeting: Maurice Roberts, and Roberts’ Assistant Superintendent for “church planting,” Randy Littlefield. Even Roberts’ Youth Superintendent, Royce Frazier, got in on the act a bit later. As the Kansas investigator wrote, “Roberts told [me] that he wanted to share this newly found wealth with other member churches and ministers in Kansas, Oklahoma and Colorado.”
If Nazarenes, with their much greater numbers, put in more money than Friends to Productions Plus, the Quakers got in earlier, and across an even wider geographical span, from California to North Carolina; and among them can be found some of her most loyal supporters still.
Not that these four recruiters always worked in harmony. In Kansas particularly, Roberts and Littlefield clashed early on. Roberts wanted to “share the wealth,” but he also wanted to be the man with the keys to the vault. He insisted that all the “deposits” for Productions Plus should be channeled through him, and kept information about the ones he handled very close to the vest.
Littlefield didn’t like this centralized control. Why, he wanted to know, shouldn’t individual churches be able to make their own arrangements with Deters? Practically all of them had needs, and why should headquarters keep such a tight grip on everything? Was this some kind of ego thing with Roberts?
Littlefield soon left the yearly meeting staff for Friends pastorates in League City, Texas and Cherokee, Oklahoma. In both places he successfully urged the congregations to send money to Deters. In fact, Cherokee sent almost half a million dollars, rivaling the Nazarenes’ “Dakota Project,” from one small church in a declining little town.
The Cherokee plan was to build a community center as well as a larger church, and it was supposed to breathe life into the small, depressed community. Since the Friends church was small, investments were solicited from other townspeople, like Mary Washburn, and the response was enthusiastic. After all, who wouldn’t want to help their community, and make excellent profits at the same time?
Royce Frazier’s contribution was more a matter of doing a good deed: his job as Youth Superintendent meant among other things that he was sent to the planning committee for YouthQuake, a national triennial conference of young Friends.
In 1991, YouthQuake was held in Burlington, Vermont between Christmas and New Year’s Day. YouthQuake was a creation of evangelical Friends, as a kind of revival conference for teens; but its reach had expanded, and in Burlington an unexpectedly large contingent of kids came from the liberal unprogrammed branches of Friends showed up as well.
This mix occasionally proved volatile, as youths from widely divergent religious cultures tried to understand each other. But after some early tumults, all ended well, and part of the upside was that the big turnout meant the planning committee, like that of the Friends Ministers Conference, ended up with a $20,000 cash surplus.
When the YouthQuake committee met in March, 1992, to take stock and begin work on the 1994 gathering, Royce Frazier knew just what they should do with that extra $20,000: put it to work doubling with Productions Plus. They could end up with $40,000 or more by then; and with that kind of cushion, the next YouthQuake could be made affordable for families of even modest means.
Who could argue with that?
Evidently some could, for there were loud complaints when the Committee heard about it later. In fact, the Committee then adopted a policy prohibiting any such ex parte transactions afterward; but by then the deal was done.
Accounts conflict as to exactly how, when and by whom the $20,000 deposit was approved; the most plausible account appears to be that Frazier, with the cooperation of the Treasurer, Sheila Bach of Baltimore Yearly Meeting, simply sent the money in and reported on it later. What is beyond question, is that the money was sent, through Maurice Roberts, on April 17, 1992. The YouthQuake Committee did not meet again until September, 1992.
XVIII
The Productions Plus bandwagon hit a few bumps in 1991, but was not thrown off track.
At the end of May, Deters was surprised to see a process server show up with an official looking document. Ed Steele and Wayne Ashworth also got copies. It was a “Desist and Refrain” order from the California Department of Corporations. Although signed by the Commissioner, the state attorney who did the work was named George Crawford.
The body of the letter was a single, legalese-weighted sentence that ran on for fifteen lines. Its message was plain enough: “…you are hereby ordered to desist and refrain from the further offer or sale in the State of California of securities, including, but not limited to, evidences of indebtedness and/or investment contracts in the form of Resource Development Fund Agreements’….”
Deters took immediate action, of a sort: she dissolved the Worldwide Community Service Charitable Trust. She rewrote Chuck Crosby’s contract, including language about how he was supposed to use only approved printed materials when making his sales presentations, and to avoid talking about the program as an “investment.”
And on June 22 she fired off a letter to the Department of Corporations, challenging the order and insisting, among other things:
“1. I am NOT a corporation.
2. I DO NOT SELL SECURITIES….”
She also alleged that “…there have been aggressive efforts to re-direct and exploit the program for the benefit of individuals profitable gain rather than the true purpose of our work.”
(Just who these nefarious individuals might have been was not specified. Deters would later finger Maurice Roberts as the arch-fiend. But at the time of this letter, and for more than two years thereafter, she continued doing business with Roberts without complaint.)
The letter closed with the affirmation that, “As a servant of the State of California since 1968, I deny all the allegations and deem them to be false.” She asked for time to prepare a formal appeal. She also called George Crawford, to seek an extension of time to respond to the order, explaining that her 93 year-old mother was quite ill. (Bessie Kuhn often seemed to fall ill at such moments.)
Crawford followed up the call with a letter on June 27, in which he shrugged off her first two claims. “It is not significant that neither you nor Productions Plus is a corporation,” he replied. Further “…both state law and the Department of Corporations, stress the substance of a transaction–and not its form–in independently determining whether that transaction is a “security.”
He added, however, that she was welcome to file a formal appeal of the order, and when she did he would “immediately” schedule a hearing date.
No formal appeal was ever filed by Productions Plus. That has not prevented Deters’ supporters from confidently asserting, as both Randy Littlefield and Ed Steele did to me, that “The California order was proven false and lifted,” (Littlefield) and “the case has been thrown out….”(Steele). We also heard Deters herself telling the ministers in Lincoln, Nebraska that, “I am free and clear in California.”
In truth, once the dust settled, very little had changed. Dick Johnston, of the National Center on White Collar Crime, understands what happened: “The problem there is more the system,” he told me. “By and large, enforcement types think they’ve done good job when they identify somebody and issue a cease and desist order, or revoke a license; then they think they’ve succeeded. Usually they haven’t.”
Just so. In this case, the “Desist and Refrain” order was a civil action, which meant Deters would not be arrested for violating it. It also meant that if the state ever suspected she was violating the order, it would have to go to court to seek an injunction to stop her.
That would be a long, slow process, if it ever happened at all. Regulators have limited resources, and lots of crooks to chase, especially in large, populous states. “California,” notes Johnston, “has been a hotbed of this kind of scam.” So the enforcers triage their cases, and set dollar amount thresholds for frauds, below which they can’t usually be bothered.
This practice was news to me but not, evidently, to the crooks. “The reality,” Dick Johnston says, “is that the career criminals in white collar crime know better how to work the system, and what will or won’t happen than most cops, often state-by-state.” Many are well aware of the unofficial thresholds, and work to stay beneath them, at least in their home areas. It is a notable fact that many of Deters’ clients in California got their money back, or most of it.
Nevertheless, her basic operation was not changed an iota by the order. If anything, the California experience made her bolder. In the fall of 1991, Chuck Crosby’s work among the Nazarenes on the “Dakota Project” was briefly jeopardized when someone called that state’s Securities Commissioner. On November 1, the Commissioner issued a cease and desist order directed at Deters and Crosby. More alarming, somebody called the Grand Forks Herald, which snapped up the story like raw meat.
“Church investment’ plan likely scam,” was the headline in the Religion section of the November 10, 1991 edition.
The article had the annoying triumphalist tone of the investigative reporter with a scoop: “So far,” the piece declared, “it appears no money from North Dakota churches was sent to California. But it was close.” It characterized a telephone interview with Deters as “vague and short on details.” She referred them to Maurice Roberts, who blandly told them that Mid-America Yearly Meeting had benefited from it.
On the inside page, where the piece was continued, a different story emerged. The local promoter, a Nazarene superintendent named Roger Wegner, laid it on the line:
“I happen to believe people that are in the church,” he said, echoing Maurice Roberts’ sentiments almost exactly. “I happen to believe Priscilla Deters. I happen to believe Chuck Crosby, and in others that have had the results. I will believe those people.”
Wegner also knew who not to believe: “It’s not illegal. I don’t care what [the] Securities [Commissioner] says….”
And he didn’t. A few weeks later, the money was sent, well over $200,000 worth. And it kept coming. The article was forgotten, the order was ignored, and nothing happened.
(In 1995, after the “Dakota Project” was long since a done deal, the South Dakota Securities Commissioner issued a similar cease and desist order. But this order didn’t get any local press, and when I called the Commission office to ask for a copy, they vaguely remembered it, but couldn’t find a copy. Such is law and order in the world of white collar crime.)
XIX
In the early eighties, John Chambers had assembled another group of Atlanta investors to have a go at displaying Jackson Bailey’s Life of Christ paintings. They raised some money, and bought a piece of property in what must surely be the prime tourist location in North America: Orlando, Florida, right near Disney World. Their plan, like the previous ones, was to build an exhibition hall for the art, and charge admission. They figured, with good reason, that there should be plenty of tourist traffic to tap. They called their company Theme Park Ventures.
Theme Park Ventures got as far as designing the building, selecting a contractor, obtaining permits, and starting the preparatory work at the site. The building was supposed to cost more than $3 million. In October, 1984 they shipped the paintings to the contractor in Florida, who parked them in a large shed, confidently expecting speedy completion of the project. The parties were so confident they didn’t even have a written agreement with the contractor. That was fine, in the beginning; business was still done that way in some corners of Florida then.
But then they went broke also. Details are hazy and arcane, but there was an unpaid mortgage on the land, investors demanding their money back, threats of foreclosure, and the likelihood of more litigation. Once again, the paintings languished in a storage shed for several years.
This particular warehouse belonged to the Graves Company, which had been hired to construct the exhibit hall.
When all this happened, Robert Graves was in Italy, learning the way of the Sons of the Divine Will and studying for the priesthood. He wasn’t interested in what the family company was doing back in Florida, though he heard about this project and even saw the paintings as early as 1984, as the Theme Park Ventures project was taking shape.
But after his parents died, he felt obliged to sort out the estate, both for the benefit of his two sisters and their families, and later his religious community. When it comes to the matter of Theme Park Ventures, an element of family pride also seeps into his voice. His background is Old South, after all, a culture in which honor is everything. And he feels the Graves Company had been ripped off, essentially robbed of a $3 million job, and made to look foolish by Theme Park Ventures’ collapse. That’s cutting pretty close to a southerner’s sense of honor.
So when Priscilla Deters came calling in October, 1991 to talk about the paintings, and her desire to have them put on display, Robert Graves also had some things to say: Mainly, that he wanted the Graves Company compensated by Theme Park Ventures for the work the company had done on the site, and several years of storage, before the paintings went anywhere. A deal is a deal, he insisted.
But is an unwritten deal also a deal? Theme Park Ventures didn’t think so; John Chambers contended the contractor had agreed to store the paintings for free. But he did send Graves a “courtesy check” for $30,000, as a compromise gesture.
Graves was insulted by this token payment. He retorted by sending Theme Park ventures a bill for more than $2,700,000, and warned if it wasn’t paid, he would auction off the paintings to satisfy it.
The figure seems grossly inflated on its face. Graves now insists that it was more of an initial bargaining position; his opponents called it a brazen attempt to steal the paintings.
Deters, at least initially, seemed unfazed by his attitude. She assured him that would be no problem; something would be worked out.
How could she be so sure? Graves wanted to know.
Easy, Deters said: because she owned the paintings now.
XX
“They buy and sell you like they do ballplayers,” Jackson Bailey said, remembering what had happened.
Not that he was complaining. Major league ballplayers may be chattels, but they command high prices. And so did he.
He watched Theme Park Ventures collapse with a certain bemusement, but also with frustration. “I just wanted the paintings to be shown, so people could see them,” he said.
His motives were not entirely selfless, however. After all, he still claimed publishing rights to the paintings; but who was going to buy posters, tee shirts or collectible plates bearing images of a painting that no one had ever seen? Besides, his health was still marginal, and if anything was to come from his masterwork, he would need help.
Help seemed to arrive in 1988, in the person of an attorney from Gainesville, Georgia named Sylvester Singleton. Singleton told Bailey he could handle all the promotional and publishing work associated with the paintings for him. He was sure they would make a lot of money. In fact, he was so sure, he had formed a corporation, Life of Christ Ministries, as the vehicle for this enterprise; and he offered to pay Bailey five million dollars, at the rate of $100,000 per year, in management fees, plus royalties on all the products sold.
On May 16, 1988, Bailey signed a management agreement with Singleton. He was to receive monthly payments of $8333 per month for the next fifty years, if he lived that long.
Evidently, Singleton soon fell victim to the jinx that seemed to follow anyone who tried to profit from the paintings, and couldn’t keep up the payments. This is hardly surprising: the exhibit hall project in Florida had flopped, and the paintings were still out of sight. There was no revenue to manage. But in addition, Singleton evidently ran into unrelated legal problems of his own. By early 1989, Singleton was needing help himself.
“Singleton called me one day,” Bailey recalled, “and said, this lady wants to meet you.” He drove to meet Priscilla Deters in a restaurant, and she said, “I’m buying your contract.” On November 30, 1989, Singleton assigned his management agreement to Deters, effective January, 1990.
One provision of the agreement Deters purchased from Singleton read as follows:
“Said [management] license shall be interpreted to include an ownership interest in said works of Artist to the extent necessary to effectuate this Agreement.” (Emphasis added.)
This is probably as close as Priscilla ever came to owning the paintings. But when she called on Robert Graves, she seemed to think it was close enough.
