By Kirk Petersen
More than a year after fraud allegations first emerged against the head of one of the oldest Episcopal organizations in America, the former executive director and treasurer of the Clergy Assurance Fund (CAF) has been indicted and arrested on wire fraud charges that could carry penalties of decades in prison.
The current treasurer, who worked with the defendant for more than 20 years, told TLC that while the fund is financially sound, the organization is still recovering from a deep sense of betrayal.
After an investigation by the FBI, prosecutors at the Eastern District of Pennsylvania allege that John A. Miller, 74, “used his position of trust to steal more than $1.6 million intended for widows and orphans of deceased clergy.” Trial is scheduled to begin February 29, 2024 in front of District Court Judge Kelley Brisbon Hodge in Philadelphia, although initial trial dates are often postponed.
Court documents indicated Miller was arrested by the FBI on December 21, 2023, on charges of wire fraud. Bail was set at $75,000, and Miller was released on an unsecured appearance bond, meaning he will owe the money if he fails to appear in court. His bail conditions include a 9 p.m. curfew monitored by an electronic device.
Phone calls to Miller and to his attorney, Timothy J. Tarpey of Philadelphia, were not returned.
As TLC first reported in October 2022, a forensic audit by BBD, a Philadelphia-based accounting firm, revealed that Miller allegedly caused two payments to be issued for certain death benefits, with one payment to the appropriate beneficiary and one to Miller, drawn on separate CAF accounts. In a confidential July 11 letter to the fund’s governing board, the fund’s then-vice president, James L. Pope, reported $1.4 million in duplicate checks between January 2016 and March 2022, when Miller was fired. The district attorney’s press release indicated $1.6 million dating back to January 2015.
According to the six-page indictment, “Defendant JOHN A. MILLER knowingly used fraud proceeds to fund personal purchases for himself, including international cruises, vacations to the Caribbean, and a luxury condominium.”
The Clergy Assurance Fund is older than the United States. It was founded in 1769 to provide financial support to the families of deceased Episcopal clergy in New York, New Jersey, and Pennsylvania, and later divided into separate funds for each state. The Pennsylvania organization was known as The Widows Corporation for most of its existence. CAF adopted its current name in 2019 in conjunction with its 250th anniversary.
CAF is governed by a board comprising the bishops of the five dioceses within Pennsylvania, along with up to 35 volunteers. The current president is the Rt. Rev. Daniel Gutiérrez, Bishop of Pennsylvania. Gutiérrez’s office referred inquiries to the Rev. Noah Evans, vice president of the fund.
When TLC asked Evans what has been done to prevent future fraud, he replied by email that the fund “has restructured internal financial controls including hiring CLA, an accounting firm, that provides outsourced accounting for organizations. This allows us to have a greater separation of duties. We use the payment system Bill to process all payments and use the lockbox for premium payments and other deposits.”
In a phone conversation, Pope, who currently serves as treasurer on a volunteer basis, described the controls in a more colorful way. “I can’t spend a nickel without getting somebody else to sign off on it,” he said with a chuckle, making clear that he supports the precautions.
Pope retired in June 2023 as vice president of CAF. He indicated the lasting damage to the organization is more psychological than financial.
“We have been able to make payments to our beneficiaries as they have fallen due. We’ve been able to fund grants to the people we support with grants and we’ve been able to support the medical programs and so forth that we support for our members and the five dioceses in the Commonwealth of Pennsylvania,” he said. “We have about 150 percent of the actuarially required financial reserves that we need for the insurance in force.”
He described the shock of discovering that the person “who you’re paying six figures a year is also paying themselves,” to the tune of $1.6 million over several years. “Betrayal is a very good word, I think, to describe that.”
Most of the $1.6 million loss is probably gone for good. CAF’s insurance covered $60,000, Pope said, and the fund will have a claim on the proceeds from the sale of Miller’s condominium if he is convicted. The indictment indicates $281,109.96 was seized when the condominium was sold in August 2023.
During its time of reorganization, CAF has not posted annual reports to its website for the past two years. But Pope provided audited financial reports from BBD showing the fund with more than $71 million in assets as of March 31, 2023. That reflected a loss for the year of nearly $7 million, but well over half of that was due to investment losses during a time when the U.S. stock market declined sharply. The S&P 500 Index has since recovered the lost ground, and is trading near its 52-week high.
