Edward Morrissey, husband of embattled former church pastor Mary Manin Morrissey, admitted in federal court Wednesday that he defrauded members of his wife’s church in soliciting $10.7 million in loans.
He pleaded guilty to one count of money laundering, a felony that could get him 36 months or more in federal prison.
Edward Morrissey, 57, acknowledged he misled parishioners of the Living Enrichment Center, the now-defunct Wilsonville church led by his wife, about the terms and security of the loans. He also admitted using parishioner loan proceeds for personal expenses.
Edward Morrissey “deceived congregants into thinking they were loaning to the church and that their loans were secured,” said Allan Garten, the assistant U.S. attorney who helped investigate the case. “Not only were the loans not secured, but some of the money was also going for the personal use of Mr. Morrissey and his wife.”
The church, which once boasted 4,100 members, collapsed last summer amid growing questions about the Morrisseys’ handling of the loan proceeds.
Mary Morrissey, 55, did not attend her husband’s plea hearing in U.S. District Court before Judge Michael W. Mosman.
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Edward Morrissey’s plea will probably not put to rest lingering questions over the deal that the Morrisseys cut with federal and state officials. Some former Living Enrichment parishioners were angered that Mary Morrissey eluded federal charges. Mary Morrissey leaned hard on parishioners to make the loans, some said, but she has claimed she had no knowledge of her husband’s use of that money.
Garten said it would have been difficult, if not impossible, to convince a jury that Mary Morrissey was complicit in her husband’s financial maneuvers.
“When you have the vice president for finance saying he was completely responsible for the fraudulent schemes and he’s prepared to testify to that under oath, it becomes difficult to prove beyond a reasonable doubt that it was otherwise,” Garten said.
The couple signed a consent decree with Oregon regulators earlier this month pledging to repay the entire debt owed to congregants, which stands at about $7.7 million after some borrowing was forgiven or repaid.
Mary Morrissey agreed to contribute 25 percent of her disposable income to retiring the debt until parishioners are fully repaid or for the next 20 years, whichever comes first.
To pay the entire sum within 20 years, the Morrisseys would have to put more than $350,000 a year into escrow. And that doesn’t include the 9 percent interest the couple is required to pay under the consent decree.
Nevertheless, state and federal officials say they’re confident the entire debt will be repaid. Mary Morrissey has maintained a busy speaking schedule despite her brush with the law.
“It looks to us like there’s a reasonable chance she’ll make enough to repay the money,” said Michelle Teed, enforcement director for the Oregon Division of Finance and Corporate Securities.
“Mary’s large following continues to grow,” said Steve Ungar, her Portland lawyer. “We are confident that her endeavors will result in . . . financial success, which in turn will translate into restitution payments for the lenders.”
The consent decree calls for the Morrisseys to pay $1,000 a month minimum into the restitution fund.
Edward Morrissey is scheduled to be sentenced by Mosman on June 27.