Edward Morrissey pleads guilty in taking millions from church

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.

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.

DCBS announces settlement in securities case

PORTLAND – The director of the Department of Consumer and Business Services, Cory Streisinger, announced today an agreement with Mary Manin Morrissey and Edward Morrissey resolving allegations of violations of state securities laws. This agreement was reached in conjunction with the U.S. Attorney’s Office in Portland.

The consent limited judgment, which requires restitution of more than $10 million to investors, the imposition of civil penalties, payment of attorneys’ fees and investigative costs, and injunctive relief, was filed today in Multnomah County Circuit Court. A plea agreement with Edward Morrissey was also reached between him and the U.S. Attorney’s Office.

As part of this settlement, neither of the Morrisseys may offer or sell securities. Further, Edward Morrissey agreed to plead guilty to a single federal count of money laundering. The plea agreement reached between Edward Morrissey and the U.S. Attorney’s Office calls for the government to recommend a 36-month sentence, but that recommendation is not binding on the court.

DCBS alleged violations of state securities laws including unlicensed activity, sale of unregistered products, and fraud in connection with the offer and sale of securities. DCBS contends that many congregants of the Living Enrichment Center (LEC) invested money in promissory-note programs and the purchase of stock in entities controlled by either or both of the Morrisseys.

“The investigation and resolution of this case reflect the strong working relationship between state and federal authorities,” Streisinger said. “Cases like this one should remind people that basing investments on trust and personal relationships is not a substitute for conducting their own due diligence before investing.”

Streisinger reminds Oregonians that due diligence begins with calling the Division of Finance and Corporate Securities to check out the investment and the people offering the investment before making a decision to invest.

Anyone who may be owed restitution from this settlement may contact Rob Brunner, investigator for DCBS, (503) 947-7855. Questions concerning the federal component of the settlement may be referred to Assistant United States Attorney Allan M. Garten, chief of the White Collar Crimes Unit, (503) 727-1043.

List of remedies follows:

• Restitution of over $10 million is due to investors. The consent decree is generally structured to provide for a garnishment of wages, payment of income not included in wages, and a minimum payment in the event there is no income.

• Restitution will be made through an escrow agent. A down payment of $50,000 is due in full by October 15, 2005, with incremental payments due at 90 and 120 days prior to that.

• There is an injunction against Ed Morrissey and Mary Manin Morrissey prohibiting them from selling securities, acting as officers for any issuers, or serving as directors or other officers of nonprofit organizations.

• Civil penalties totaling $200,000 were imposed, of which $150,000 is suspended so long as the consent judgment is complied with. The amount not suspended, $50,000, is due in full by December 31, 2005, with incremental payments due 90 and 120 days prior to that.

Attorneys fees and investigative costs in the amount of $7,500, are due December 31, 2005.

DCBS imposed compliance reporting provisions and retains the ability to obtain documents and talk to individuals concerning compliance with the judgment.