More than $1-million intended for the National Baptist Convention USA Inc. went into a secret Wisconsin bank account set up by Bernice Edwards, the convicted embezzler placed in a top convention job by the Rev. Henry J. Lyons.
The account helped pay for personal purchases by Edwards and Lyons.
Some $136,000 was withdrawn from the account as a down payment on the Tierra Verde waterfront house the two own together. Another $28,700 went toward a diamond ring they bought.
Hundreds of thousands of dollars more were transferred from the Wisconsin account into the National Baptist Convention USA Inc. Baptist Builder Fund, another secret account that Lyons alone controlled in a St. Petersburg bank.
The Wisconsin account was held at the Guaranty Bank under the name J.H. Associates. It was into this account that The Loewen Group, a funeral company in business with the convention, wired more than $1-million. Loewen officials would not discuss the wire transfers or say who provided them with the account's number, 8234256.
That account was opened by Josephine Hicks, who owns a Milwaukee diner and is a longtime friend of Edwards. In an interview Friday, Mrs. Hicks said she opened the account to help Edwards cash checks but closed it after learning that large wire transfers were going into the account. Hicks said the transfers made her uncomfortable.
"I had no control over what was being wired in there," Mrs. Hicks said. "I didn't know. I didn't know anything about The Loewen Group."
In a prepared response to written questions from the St. Petersburg Times, Lyons distanced himself Wednesday from the J.H. Associates account.
"The implication that monies were "diverted' by Dr. Lyons is contradicted by the facts expressed in your own letter," the response states. "To wit . . . the underlying bank account was opened by Ms. Hicks at the request of Ms. Edwards, NOT at the request of Dr. Lyons. Only Ms. Hicks and Ms. Edwards had access to the funds in the underlying bank account, NOT Dr. Lyons."
Guaranty Bank officials have said their records were subpoenaed by Pinellas-Pasco State Attorney Bernie McCabe, whose office has been investigating Lyons' handling of convention money. Loewen officials, who recently ended their partnership with Lyons, also have turned over records to prosecutors.
"It would be inappropriate for us to comment at this time," Loewen spokesman Dave Laundy said Wednesday. "As you know, there is a criminal investigation under way."
Edwards came to the door of her Milwaukee house one afternoon last week. Greeted by a Times reporter, Edwards slammed the door.
Customer who called her "mom'
Josephine Hicks sits behind the cash register of the QF & H Diner, a bustling place for home cooking in a depressed section of Milwaukee. This morning, Hicks is gently warning one of her regulars, an elderly man with failing eyesight, not to carry so much cash. "You shouldn't have all that in your wallet."
Mrs. Hicks, 64, has been here a long time. She and her late sister, Pearl, started the diner in 1961 with a $29 bag of groceries. It was in the diner, Mrs. Hicks says, that she got to know Bernice Edwards.
Edwards, 41, was a customer who sometimes called Mrs. Hicks "mom." They aren't related, but they wound up sharing a bank account.
In the summer of 1995, shortly after a National Baptist Convention meeting in San Diego, Edwards asked Mrs. Hicks for a favor. "She asked me to cash some checks," Mrs. Hicks said. "She said she had lost her I.D."
The checks, Mrs. Hicks said, were made out to the convention from concessionaires at the San Diego event. Mrs. Hicks said that she was aware Edwards was the convention's corporate public relations director and that the request did not strike her as odd.
One of the checks bounced. Mrs. Hicks said she decided she didn't want to complicate her diner bank account with bad checks. "I said, I can't have this." So Mrs. Hicks said she agreed to open a separate bank account, exclusively to cash Edwards' checks.
That was the start of J.H. Associates.
Why would Mrs. Hicks go to so much trouble for Edwards? In part, Mrs. Hicks said, it was because she had loaned Edwards money and hoped to get it back by helping her cash checks.
Although Mrs. Hicks didn't mention it, her daughter also has a connection to Edwards: The daughter worked for the convention affiliate created by the partnership with Loewen.
Other than having lost her identification, Edwards may have had another reason for asking Mrs. Hicks to open the account. A year before, Edwards had been ordered not to open new bank accounts or write checks without permission from her probation officer.
Once the J.H. Associates account was open, Mrs. Hicks said Edwards sometimes asked her to cash checks. Other times, Mrs. Hicks said, Edwards wanted her to write checks on the account on Edwards' behalf.
"She didn't write checks," Mrs. Hicks said. "She'd say: I need a check for whatever. I signed them. I would give her them."
At one point, though, a bank employee called Mrs. Hicks, she said. Large amounts of money were being wired into the account, the official told her.
During this period, more than $1-million was wired into the account from The Loewen Group.
In several conversations, bank officials assured her the transfers were legal, Mrs. Hicks said. But the transfers of such large sums made her nervous. "When I saw what was happening, I closed the account."
Mrs. Hicks says the account was empty when she closed it, more than a year ago. She said she still sees Edwards. "She's just a regular customer." Mrs. Hicks said she knew Lyons only slightly. She spoke to him by phone once, she said. He promised to come by the diner but never did, she said.
Account was not mentioned
About the time the J.H. Associates account was opened, Lyons formed a partnership with The Loewen Group to market cemetery plots to members of his convention.
The form of this partnership was the National African-American Church Council, an NBC affiliate headed by the Rev. John D. Chaplin, the convention's first vice president.
It was a small operation.
Chaplin said he had 100 "counselors" selling funeral services in three pilot cities. He said the NAACC generated less than $2-million in sales over two years of operation.
Lyons has offered conflicting explanations of how much money Loewen paid the convention.
His 1995-96 annual report states the convention received a $100,000 gift from Loewen. Neither that report nor the report for 1996-97 mention the J.H. Associates account. The account also is not mentioned in the convention's 1995-96 audit.
In another document, Lyons said the convention got $200,000 from Loewen, with Edwards receiving $75,000.
In an August interview, Lyons said the convention may have received $300,000 or $400,000 from Loewen. He said he was "foggy" about his or Edwards' commissions from the Loewen deal.
Later still, Lyons reported to the convention's special investigative commission that Loewen paid a total of $800,000 _ $300,000 of which went to the convention. He did not say where the other $500,000 went.
Lyons spent hours before the commission, but two members said Lyons never mentioned the Milwaukee account.
"I'm certain that he did not give a reporting of an account in Milwaukee," said the Rev. Kenneth Whalum, who quit the commission in disgust after the convention voted to forgive Lyons in September.
"I have not heard anything about a Milwaukee bank in all of the deliberations," said the Rev. C.L. Bachus, who also quit the commission in protest.
The Rev. E.V. Hill, a staunch Lyons' supporter who chaired the commission, declined comment, as did the Rev. Roscoe Cooper, general secretary of the convention.
Chaplin, the NAACC's chief operating officer, accused the Times of publishing "smut" about Lyons. But had he ever heard of the J.H. Associates, or any such account in Milwaukee?
"No," he said.
IRS steps in
Investigators from the Internal Revenue Service have begun making inquiries into purchases made with money from the J.H. Associates account.
According to IRS guidelines, heads of tax-exempt organizations _ like the National Baptist Convention _ cannot operate the entity for private gain.
In February 1996, Lyons and Edwards purchased a 5.56-carat diamond ring at a St. Petersburg jewelry store. They paid a $10,000 deposit on the $38,700 ring from a check drawn on the Baptist Builder Fund, the secret account Lyons held at the United Bank in St. Petersburg.
Two weeks later, the store received a $10,000 cashier's check from Guaranty Bank. That check was drawn off the J.H. Associates account, as was a second cashier's check delivered a few weeks later for the balance on the ring.
On March 1, 1996, Lyons and Edwards attended the closing on the Tierra Verde home. As part of the down payment on the property, they submitted a $90,000 cashier's check drawn from the Baptist Builder Fund and a second bank check for $136,000 from the Guaranty Bank. That $136,000 bank check was drawn from the J.H. Associates account.
Lyons, however, has steadfastly insisted that no convention money was used in the purchase of the ring or the house. All of the money, he has said, came from Edwards.
Lyons was asked about the $136,000 Guaranty Bank check in an August interview with Pinellas prosecutors. The prosecutors were investigating his wife for setting fire to the Tierra Verde home.
Asked who provided the $136,000 check, Lyons replied: "I'm sure it was (Edwards') check."