Ousted bishop ordered to pay $12 million in restitution to defrauded church

OAKLAND, Calif. (CN) — A judge ordered a defrocked bishop who defrauded his congregants to pay over $12.4 in restitution on Wednesday, after hearing oral arguments Tuesday and debating a monthly payment amount he could feasibly make.

Former African Methodist Episcopal Zion Church Bishop Staccato Powell, 65, pleaded guilty to four felonies after diverting millions in loans obtained by fraudulently mortgaging church properties, using some for his personal benefit. His plea agreement allowed him to avoid jail time.

“Although Powell argued that the government had not carried its burden to support its request for $12,475,453, at the hearing he withdrew his objections and agreed to pay that sum,” U.S. District Judge Jeffrey White wrote. “The government supported its request through Powell’s factual admissions in his plea agreement.”

The Mandatory Victims Restitution Act, which was applied in Powell’s criminal case, requires a payment award, “to make victims of crime whole, to fully compensate these victims for their losses,” White quoted from United States v. Gordon in the order.

White, a George W. Bush appointee, decided $5,000 monthly payments by Powell, through his probation officer while he is on house arrest, to be an appropriate amount.

Assistant U.S. Attorney Jonathan Unruh Lee asked for $10,000 monthly payments, saying it would take Powell 30 years to pay a few million dollars.

John Reichmuth, Powell’s public defender, countered at the hearing on Tuesday with $1,000 monthly payments, noting Powell needed to support his family, which included financial support for an adult and a minor.

One of the stipulations of the plea agreement was Powell’s ongoing employment to pay restitution to several AME Zion churches and affiliates. During court proceedings for the case, which started in 2022, Powell created New Church Believers LLC to minister to followers online. Through the ministry, according to the government, he made $110,000 in the last year.

In September, White sentenced Powell to three years of supervised release for each felony charge, which included mail fraud, wire fraud and conspiracy to commit both, as well as 18 months of home confinement, with stipulations to forfeit the deeds to church properties, not open any new lines of credit and be subject to search at any time.

In the July plea agreement, prosecutors pushed for monetary restitution for AME Zion and its churches instead of jail time so that the victims could be made whole as soon as possible, Lee said during the September sentencing.

In the Wednesday order, White asked both parties to file a briefing regarding the forfeiture of Powell’s interest in specific properties related to the case, as part of his plea agreement.

Shortly after being elected bishop in 2016, Powell formed a business operation called Western Episcopal District Inc., of which he was the CEO. In 2017, he began instructing his co-conspirators to execute loans to fund that company, using the deeds of several church properties as collateral for the loans.

The properties — located in Oakland, San Jose, Palo Alto and Los Angeles, among other areas — were redeeded without their congregations’ knowledge.

Powell then diverted some of the funds borrowed by WED Inc. for his personal benefit, including the purchase of property in North Carolina for two of his children and a $14,000 payment for mortgage debt that he owed on a residence in North Carolina.

Justice Department officials said WED Inc. listed 11 churches in California, Arizona and Colorado among its assets when it filed for Chapter 11 bankruptcy in 2020, as well as a parsonage and Powell’s official residence, but that WED Inc.’s real property was worth over $26 million.

AME Zion Church traces its history to 1796 and has about 1.4 million members worldwide.

White set a restitution monitoring hearing for April 14, 2026.