Written by The Business Journal Staff
A former Clovis pastor was sentenced to more than seven years in prison and ordered to pay $2.18 million in restitution for a development fraud scheme.
Sherman Smith, 74, of Monterey, formerly the executive pastor of Sonrise Church in Clovis, was indicted on seven counts of wire fraud in August 2019, pleading guilty to the charges in September of this year.
Smith induced investors, which included church congregants, to contribute money to the church by claiming the money would be used to finance a real estate development project for the benefit of the church.
Smith appealed for monies from the pulpit, via email and in person to pay off the church’s mortgage and fund an income-generating development. He collected cash, checks, and rolled-over retirement accounts to fund the church’s project, but did not tell investors that he used the money for personal expenses, to operate a publishing business and to invest in foreign ventures.
In sentencing Smith on Friday, U.S. District Judge Dale A. Drozd said, “Mr. Smith is a con-man and a thief.”
“Smith’s actions in this case went far beyond ‘misappropriation,’” said U.S. Attorney McGregor W. Scott. “In asking for church donations to support his scheme, he targeted widows for their deceased husband’s life insurance money; he asked for money to be withdrawn from retirements accounts; he damaged marriages and family relationships; he took away parents’ dreams of affording college for their children, and he destroyed lives. Today’s sentence is the second federal sentence for Smith, who previously served 37 months in prison for securities fraud that caused a loss of over $5 million with 38 different victims. Our office is committed to protecting the public from financial predators like Smith.”
“Smith abused his trusted role as executive pastor of a community church by diverting funds intended to help the church and congregation to fund his personal and business expenses,” said Special Agent in Charge Sean Ragan of the FBI Sacramento Field Office. “The FBI is committed to investigating allegations of significant financial crime, especially those involving individuals who exploit trusted, valued relationships. While today’s sentence offers some justice to Smith’s victims, many face a long journey to financial recovery from the hardship this scheme created. We ask the public to commit to researching all financial investment opportunities, regardless of who is proposing or coordinating the investment.”
This case was the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorney Laura D. Withers prosecuted the case.