BALTIMORE (ABP) — A Baptist preacher will serve more than three years behind bars after admitting that he filed false documents to obtain a loan and didn't pay taxes on hundreds of thousands of dollars he profited while leading a prominent Southern Baptist church in Maryland.
A federal judge in Baltimore sentenced Otis Ray Hope, 53, of Aiken, S.C., to 37 months in prison followed by three years of supervised release Aug. 4 for tax evasion, subscribing to false document and conspiracy to commit bank fraud. U.S. District Judge William M. Nickerson also ordered Hope to pay restitution of more than $2.4 million.
Prosecutors say Hope created false financial statements to defraud a bank into approving a $1.75 million loan for a conference and retreat center in Hagerstown, Md., that he falsely claimed had reopened for business after a fire. Before that they say he diverted tuition payments for an educational program at the church where he was pastor into an account he used to pay for golf outings, a family vacation to Hawaii, airline tickets, cars and home improvements.
"This sentence holds him accountable for a pattern of fraud and deceit," said U.S. Attorney Rod Rosenstein.
Hope took over as senior pastor of Montrose Baptist Church in Rockville, Md., in 1996, at the time the second-largest church in the Baptist Convention of Maryland/Delaware with more than 2,000 members.
He followed Bob Crowley, the church's pastor for four decades. Crowley is best known outside of Maryland as chairman of the board of trustees at Southeastern Baptist Theological Seminary in 1987. That is when President Randall Lolley resigned instead of carrying out the board's agenda and was replaced by a successor sympathetic to the "conservative resurgence" in the Southern Baptist Convention.
According to a Department of Justice press release, Hope admitted in a plea agreement that he supervised the Montrose Christian School and another educational program called English as a Second Language, or ESL.
In 2001 Hope advised church leaders the ESL program could be more lucrative if expanded and operated as a separate corporate entity. He then formed a company of his own called the Maryland International Student Association to take over the program. Between June 2001 and December 2003, foreign students admitted into the ESL program wired about $1.3 million in tuition payments into MISA bank accounts.
Except for paying the salary of an ESL employee and incidental expenses, Hope kept most of the money. He did not claim it on his tax returns, resulting in evasion of $287,131 in income taxes in 2001, 2002 and 2003.
After church leaders confronted him about a conflict of interest between his company and Montrose Christian School, Hope resigned as pastor in 2002.
Hope invested some of the money in a company that operated the Shiloh Conference and Retreat Center in Hagerstown, Md. In 2006 he and a partner borrowed $1.75 million to refinance and renovate the camp closed three months earlier because of a fire. Hope and his co-conspirator falsely told the lender the camp had reopened, submitted fraudulent financial statements overstating the company's assets and cash flow and gave the bank a bogus corporate resolution and minutes from board meetings that never took place.
Hope also lied on an application for exemption from federal taxes for Shiloh Ministries by claiming that recipients of services did not have to pay for them, the company's financial support was derived from donations and the company conducted worship services. In fact, the U.S. Department of Justice reported, the company charged for services, derived support from rental fees and other charges and did not conduct worship services.
Hope was serving as pastor of First Baptist Church in Warrenton, Ga., last August when a federal grand jury in Baltimore indicted him on three counts of tax evasion and one count of subscribing to a false document.
Hope said at the time he had done nothing wrong, but he resigned as pastor after telling the church about his indictment.
Hope pleaded guilty June 4 in a deal he made with prosecutors. If convicted in a court of law, he could have faced up to 30 years in prison.
Hope's six-plus year tenure at Montrose Baptist Church was a tumultuous affair. Before taking office, the Washington Post reported in 2002, Hope warned the congregation that his management style was "going to hurt people." He fired or reassigned several staff members and restructured the church's congregational governance to a corporate-CEO model that prompted many long-time members to leave.
In 1997 he dismissed three school employees who filed suit saying they were unfairly fired for not being members of the church. A judge ruled in their favor, but they were overruled on appeal.
In 1998 hope and his brother settled an 8-year-old Securities and Exchange Commission complaint for fraud, while neither admitting nor denying guilt.
According to its listing in a database of Southern Baptist churches, Montrose Baptist Church now has 475 members and an average attendance of 300.
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Bob Allen is senior writer for Associated Baptist Press.
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