Church, pastor face criminal investigation

Authorities examine the Living Enrichment Center in Beaverton as it heads toward bankruptcy

Federal criminal investigators are probing Living Enrichment Center, the financially troubled Beaverton megachurch, which this week lost its charismatic leader and confirmed it will file for bankruptcy and liquidate.

Mary Manin Morrissey, the church’s energetic founder and lead pastor, resigned her position earlier this week and is planning to declare personal bankruptcy as well. She faces at least $1 million in debts, and lenders are repossessing the home she shares with her husband, Edward.

In a letter to the congregation, Morrissey said she is unable to repay loans from church members, some of whom are suing her and the church for their money.

“I am deeply saddened and heartbroken by all of the hardship and hurt that the church community as a whole and many of you individually have experienced,” Morrissey wrote. “It is obvious that I must do some deep reflection and grow in my own spiritual capacity.”

State and federal agencies are conducting a joint criminal investigation of the church and the Morrisseys, according to Steven Ungar, Mary Morrissey’s criminal defense attorney. The Internal Revenue Service issued criminal subpoenas to the church and to certain church officials earlier this summer.

Investigators are attempting to determine what happened to more than $5 million the church and Mary Morrissey personally borrowed from congregants. Another $1 million to $2 million, much of it directly from congregants, went to New Thought Broadcasting, an ill-fated media and Internet startup formed by Edward Morrissey.

Living Enrichment Center officials said the church will continue holding weekly Sunday services at the Valley Theater in Beaverton, where the congregation moved last month to shave expenses.

However, the church will cease to exist upon its bankruptcy filing, said Charles Markley, a Portland attorney representing the organization. A group of Living Enrichment Center congregants is attempting to form a successor church.

Before moving to Beaverton, the church had been housed in a 94,500-square-foot building in Wilsonville, and church officials said the difficulty of paying the facility’s operating costs contributed to the church’s financial woes.

Hawaii-based Watamull Properties took possession of the Wilsonville property in May.

Church officials had announced a restructuring plan in March that included paying off most of its loans to members within five years.

The restructuring plan, said church official Marty McCall, was based on the assumption that members would continue to tithe regularly and wouldn’t file lawsuits to force repayments of their loans to the church.

But in June, McCall said, the lawsuits started trickling in. The most recent, on Tuesday, was from a disabled West Linn woman identified as “Jane Doe” who said she loaned her life savings of $246,650 to the church. She alleged that Morrissey and other church officials promised she’d receive 7 percent interest on the loan and that her money would be safe, statements that she said would later prove false.

The woman claims Mary Morrissey called her personally four times pressuring her to make the loan and assuring her it was a safe investment.

The church already has been ordered to pay $58,000 to a congregant, $12,000 of which came from Morrissey personally, McCall said.

Edward Morrissey, who spent most of this year in treatment for bipolar disorder and depression, is shouldering much of the blame for the church’s financial ills.

“Mary is innocent of any wrongdoing,” said Michael R. Levine, Edward Morrissey’s Portland attorney. “My client believes that he’s responsible for various errors, errors of judgment and business miscalculations, that were made.”

Markley said the church’s debts will exceed $6 million, far in excess of its remaining assets, which consist of office equipment and inspirational books and tapes. Living Enrichment Ministry, the umbrella organization that oversees the church, plans to file for Chapter 7 bankruptcy, meaning it will cease to exist, Markley said. Under Chapter 7, a judge appoints a trustee to liquidate the church’s assets and distribute the proceeds to the creditors, which in this case include the congregants, government agencies and vendors.

Church officials have cut operating hours, eliminated workshops, stopped publishing newsletters and plan to slash staff to a handful of people. On Thursday, they issued the last of the paychecks to employees — including $10,200 in monthly salary to Morrissey.

“Our heart goes out to her while she works through her pain,” said David York, who leads the church’s music ministry. “She, more than any minister I’ve ever met, walks her talk.”

A group of congregants has been meeting to decide the direction of the church and says it’s optimistic about the future. But finding a pastor to draw the types of crowds Morrissey did could prove difficult. The high-profile pastor has written several books, appeared weekly on television in Portland and Salem and on a number of cable channels, and even now is constantly asked to address church groups around the country.

The Living Enrichment Center’s membership hovered around 3,000, although it had declined in recent weeks with the move to Beaverton and families leaving town for summer vacations, McCall said.

The church is aligned with the New Thought movement, a set of ideas stemming from mid-19th-century U.S. philosophers who emphasized the power of thought. The church uses the example of Jesus Christ as a central tenet but also refers to religious figures such as Buddha and Krishna.

McCall said Morrissey will continue to accept speaking engagements to help pay off the loans to members. The church also is receiving outside help. Next month, author Mark Victor Hansen, author of the popular series of books “Chicken Soup for the Soul,” will host a three-day seminar in Portland and will donate the proceeds to help pay the church’s debts to congregants, McCall said.

McCall is one of those waiting to be repaid. She declined to disclose how much she loaned to the church but says she’s confident she’ll get her money back.

“I feel entirely fine about it,” she said. “Mary has made a total and complete commitment to repay the loans, and I have total and complete confidence she will do that.”

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