Broken Trust: How Henry Lyons cheated a Temple Terrace church and one of the world's wealthiest charities

TAMPA — Before he was sent to prison nearly 20 years ago, the Rev. Henry Lyons apologized for a litany of sins. Extortion and laundering of church funds. Hidden properties, secret mistresses and an opulent lifestyle that included luxury cars and a personal chef.

But the former St. Petersburg pastor who once presided over the nation's largest black religious organization never said a word about Rochelle McCanns.

FOR PREVIOUS COVERAGE: For a history of Henry Lyons' rise and fall from the pulpit, go to tampabay.com/henry-lyons.

McCanns is a convicted prostitute who rose to an administrative position at Lilly Endowment Inc., an Indianapolis-based philanthropy that is one of the world's wealthiest charitable foundations.

In the 1990s, records show, Lyons secretly funneled thousands in National Baptist Convention U.S.A. money to McCanns, including $10,000 donated by the Anti-Defamation League for the rebuilding of black churches damaged by arson.

Authorities knew McCanns received the diverted money but she was never charged with a crime. Prosecutors and investigators say they were focused on bigger targets.

Now a Tampa Bay Times investigation finds the relationship between the two continued decades later in a new Lyons' scheme, this one targeting Lilly's generosity.

Interviews and records show McCanns and Lyons arranged to have more than $130,000 in Lilly money sent to New Salem Missionary Baptist Church in Temple Terrace, which made Lyons pastor in 2004 after his release from prison. The stated purpose was to help finance youth programs and community service work. Records show most of the funds ended up in accounts controlled by Lyons.

McCanns, 70 and now retired, denies doing anything wrong. She says she never received a dime from Lyons, past or present.

"I don't have anything to do with Henry Lyons or his money,'' she told a reporter before abruptly ending a recent interview.

Lyons, 76, who was fired from New Salem last year, did not answer questions about his relationship with McCanns or about bank records that show Lilly money moving in and out of his accounts.

Warren Hope Dawson, his attorney, declined to discuss specifics. He said, however, that there was no contract or church bylaw that prohibited Lyons from opening personal accounts and depositing New Salem money in them.

"Rev. Lyons denies any wrongdoing in connection to the New Salem church," Dawson said. "Any wrongdoing that was done in the past, he was punished for it, and he accepted his punishment like a man."

Last summer, the FBI seized a computer and multiple boxes of financial records used by Lyons and his wife from New Salem offices. As is its practice, the FBI will not comment on investigations.

But McCanns acknowledged agents have contacted her. And more recently, church officials say agents have been questioning them. Several said they were asked if they would be willing to testify against Lyons.

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•••

Wynie Anderson was the secretary at New Salem for 19 years. When an invoice or donation arrived, Anderson was usually the first to know.

She made bank deposits and notarized property transactions. She scoured the Internet looking for ways to raise money for the church. One day in late 2009, she told the Times, Lyons called her into his office. He told her he had stumbled onto a new grant prospect and needed her help.

The Lilly Endowment of Indianapolis — created by members of the family that built Eli Lilly and Co., the giant pharmaceutical firm — had money the church could get, Anderson said Lyons told her. But there was a twist. Lyons would have to send money to get money.

"He says to me, 'This funding comes from this endowment where they pay pastors if the pastors give X amount of dollars,'?'' Anderson said. "I say 'really?' He said, 'Yeah.'?''

Lilly says nothing like that has ever existed. But the organization does have an "incentive for personal giving" program open only to Lilly employees, who can apply for a 2-to-1 match of every dollar they donate to an outside charity. Employees must certify the donation is coming from them and not from outside individuals or organizations.

For months, Lyons mailed at least $1,500 to a contact at Lilly, Anderson told the Times. When a Lilly check arrived at the church, he told her where to deposit it. For her help with each transaction, she was typically given $300.

Occasionally, Anderson would talk by phone to a woman at Lilly who wanted to make sure the church had the forms it needed.

Her name, Anderson said, was Rochelle McCanns.

•••

From 1975 until her retirement in 2015, McCanns held a number of administrative positions at the Lilly Endowment. The last was overseeing its matching gift program for employees.

The Lilly Endowment is one of the largest private foundations in the world, with more than $10 billion in assets. In a typical year, it awards hundreds of millions in grants, much of it to education and religion programs.

The matching gift program is designed to encourage employee giving.

Between 2009 and 2014, Lilly paid New Salem's nonprofit arm — New Salem Ministries — $132,200 in matching grants. In each instance, McCanns signed a form certifying she had made the initial contribution personally, according to a statement by Clay Robbins, the Lilly Endowment chief executive.

At the time, the church charity provided food for the poor, child day care, an after-school program and other social services. It was supposed to receive $20,000 in 2009; $23,400 in 2010; $18,800 in 2011; $21,000 in 2012; $26,000 in 2013 and $24,000 in 2014.

Bank statements and church records show at least $94,000 was diverted into other accounts controlled by Lyons.

Most of it went to Regions Bank in Tampa. Lyons directed an 82-year-old deacon to start the new account, called the New Salem Missionary Baptist Church Benevolence Fund, on Feb. 11, 2013. Bank statements show the deacon opened it with $3,000 from church members' tithes and donations.

That was the same day the U.S. Attorney's Office informed Lyons of its plans to audit his finances to ensure he was paying his legally required restitution for crimes committed while president of the National Baptist Convention. It was also the same day prosecutors filed a subpoena on BB&T bank, demanding records about Lyons' checking and savings accounts there.

Until that time, New Salem kept its benevolence funds at SunTrust and PNC banks. They were small pots of money set aside to provide loans to church members in crisis.

The fund would range from as little as $100 to as much as a few thousand. Dispersals were capped at $300, with each case required to be approved by Lyons and one other church leader.

Between February 2013 and December 2014, $69,800 in Lilly matching money moved in and out of the account at Regions. The cycle of deposits and withdrawals was repeated 15 times, with checks from Lilly or McCanns coming in and money going out to Lyons or accounts he controlled.

Breach Ministries, a charity created by Lyons, received $42,100. Almost $15,000 went to Lyons directly while $10,700 was paid to National Trusted Partners, an organization founded by Lyons.

Church officials say the benevolence fund at Regions was created without their knowledge. They say they didn't learn of the Lilly checks until told by the Times.

The deacon has since left the church.

G.W. Stewart, treasurer for National Trusted Partners at the time of the transactions, told the Times he was unaware the organization had received thousands intended for New Salem Ministries. Lyons alone controlled the checkbook, he said, as well as related financial transactions. He insisted he was a treasurer in name only and never saw financial statements or held any real oversight power.

"One time Lyons brought the checkbook with him and I saw something that I couldn't understand,'' he told the Times. He said he asked Lyons to identify the recipient of a particular check.

"And he said, 'Well, I have some personal business mixed up with that. So don't worry about that,'?'' Stewart said. "I left it alone. After that I didn't ask any more questions. I figured if I don't know nothing about it then I'm not involved."

Most of the Lilly donations do not appear to have been disclosed to the Internal Revenue Service by New Salem Ministries, as required by law.

Tax records show New Salem Ministries only informed the IRS of the money once, in 2011. And it apparently underreported the gift, claiming only to have received $6,000 that year when Lilly's records show giving at more than three times that amount — $18,800.

Four other years went unreported.

Questions have also surfaced about the legitimacy of signatures used by Lyons and McCanns to acquire the Lilly funds.

Anderson, the former New Salem secretary, and Rufus Spencer, a former church president, told the FBI the handwriting was forged on some of the paperwork.

Lilly used the forms to guarantee all parties agreed with the terms. No money would be released without signatures. Anderson says that while she did sign forms at Lyons' request, investigators produced one document that truly alarmed her.

"They had my name spelled wrong and my signature was wrong," Anderson said. "They had Winnie Anderson and signed it Winnie. But my name is Wynie Anderson. So I told the agent, 'Nope. That is not mine.'?"

Spencer, who maintains he knew nothing about the Lilly gifts, gave FBI agents several handwriting samples to prove his name and signature had been faked.

"I know that wasn't me. Everything in the form was neat. I mean it's legible. But my handwriting isn't neat. You can't read my writing. I can't even read my writing," Spencer said. "I just don't have good penmanship. But now I'm glad I don't."

•••

So who is Rochelle McCanns? And what was her connection to Lyons?

Records and interviews tell the story of a woman who has had a difficult life, especially in her early years.

Born in Indianapolis, McCanns didn't know much about her father. Her mother, a hotel maid, died of breast cancer when McCanns was 14. She was living with foster parents when she became pregnant. She was 16 at the time.

She was able to earn a high school diploma through night classes, but by 1967, the 20-year-old was on her own, and soon, police records show, on Indianapolis streets trading sex for cash. She went by the name of Beverly Bell and police got to know her well.

Because of the age of the crimes and McCanns' use of fake names and birthdates, her prostitution past isn't easily found. The Times pieced together her history through fingerprint records, court files from the late 1960s, prison records and interviews.

During an 18-month period from 1967 to early 1969, McCanns was arrested 56 times, according to Indianapolis police records. She was finally sentenced to two to five years in prison.

Not long after McCanns was paroled two years later, Charles G. Williams, a Lilly Endowment vice president, decided to give her a job, making her an Endowment receptionist. It's unknown whether he was aware of her criminal past.

He later promoted her to an assistant to the program officer working with black churches.

"All I knew was she had overcome some problems or some charges. I never knew what they were,'' said Charles Blair, a former Lilly program officer who remembers McCanns fondly. "For whatever reason, they (Lilly) decided she was worth taking the risk. And they were correct. She was very good.''

While McCanns was rising up the corporate ladder in Indiana, Lyons was firmly established as the fiery, charismatic pastor of St. Petersburg's Bethel Metropolitan Baptist Church.

But he had his sights set on the presidency of the National Baptist Convention, which now claims about 30,000 congregations and more than 7 million members.

He had supporters in the Midwest and while campaigning in Indianapolis, Lyons met McCanns. The Rev. Melvin Girton, a retired Indianapolis pastor, is now a historian for the National Baptist Convention. He remembers watching an attraction develop between Lyons and McCanns, who was divorced and living alone.

Whenever local pastors arranged for Lyons to speak in town, Girton told the Times, she was there. Then Lyons started to show up in Indianapolis unannounced. A few times, Girton said he discovered Lyons and McCanns together at her apartment.

During the Convention's 1994 assembly in New Orleans, Lyons was announced the winner of the presidential vote — and McCanns was there. About a year later, Lyons sought Lilly financing for a prison ministry. For months, he sent checks to McCanns. State investigators later determined the money came from the Baptist Building Fund, a secret Convention bank account established by Lyons that prosecutors said he operated like a personal slush fund.

According to copies of checks, registers and ledgers obtained by the Times, McCanns received $8,000 from the fund in April 1996. The following month, Lyons sent another $3,000.

His biggest check — for $10,000 — went out in November. Records show that money came from a $225,000 donation from the Anti-Defamation League of New York, a Jewish civil rights group. It was supposed to help repair black churches damaged by arson.

At the time, Lyons was living large. He flew first-class, bought multiple homes and showered female friends with gifts. Then his third wife, Deborah, discovered Lyons had purchased a house with another woman. She tried to burn down that $700,000 home in Tierra Verde.

Deborah's arrest led to a closer examination of Lyons' lifestyle and business dealings. He was soon under arrest and convicted in state court of grand theft and racketeering. He later reached a plea agreement in federal court on tax evasion and bank fraud charges. He eventually served five years in prison.

In the state trial, there wasn't a focus on McCanns even though the case against Lyons was largely about his theft of church arson funds.

Limited money and manpower hampered how broadly Pinellas investigators could chase down leads, remembers William Loughery, a former Pinellas County assistant state attorney who worked on the case.

The Pinellas-Pasco State Attorney's Office knew McCanns was one of several recipients of the arson funds, investigative notes obtained by the Times show. But when an investigator couldn't reach her by phone or track down an accurate address, prosecutors dropped it. They believed her out-of-state status would have posed thorny legal challenges and that other aspects of the case had stronger potential. Still, Loughery hoped the bigger, better-resourced FBI would pursue the lead.

But former FBI special agent Neil V. Palenzuela, who led the Lyons investigation, thinks the FBI had a higher priority than McCanns. They were trying to determine whether Lyons disbursed the money to needy burned-out churches, as he claimed. Agents eventually found numerous pastors across the country who said they never received a dime.

"(She) probably didn't make our threshold,'' Palenzuela said about McCanns. "There was so much to deal with. That's why I think at some point we made a decision that we're going with the most egregious transactions.''

Many of Lyons' acquaintances deserted him once he entered prison. But not McCanns.

Lyons was only authorized to call 10 people a year while incarcerated and McCanns was on the institution's approved list. He put her there every year of his five-year stint — a privilege not given to his wife, Deborah, prison records show.

He petitioned prison officials to add McCanns to a list of special visitors who could avoid a criminal background check, and then tried to get authorization for a Thanksgiving meeting.

When prison officials balked over a married Lyons seeing any woman who wasn't his wife or immediate family, he began describing McCanns in subsequent requests as his sister-in-law and aunt-in-law, according to Lyons' prison file.

Meanwhile, friends said McCanns' regard for Lyons was so high that she wouldn't allow guests to eat holiday meals until Lyons called from prison and blessed the food.

•••

In a statement, Lilly would only confirm McCanns' years of employment. Officials said employee privacy interests prevent them from providing anything else, including whether Lilly was aware of her criminal background.

"The matters that you describe are disturbing, and we would be deeply disappointed if it is proven that an employee broke our trust and misused philanthropic funds," wrote Robbins, Lilly's chief executive. "We are taking appropriate steps in response to the situation.''

The decision to remove Lyons has left New Salem Missionary Baptist Church reeling. Some longtime members exited, feeling Lyons was treated unfairly. Others who stayed, like Rufus Spencer, have seesawed between anger and regret.

The church's lofty dreams for New Salem Ministries have vanished. Created in 2005, the nonprofit organization was meant to serve Tampa's young and needy, to honor God by giving back to the less fortunate. Instead, New Salem Ministries became a source of angst and frustration, an insatiable money pit swallowing critical church resources year after year. It was finally shuttered last summer.

The after-school programs, the child day care, and the food drives are distant memories as are the referrals for substance abuse problems and HIV testing. The Lilly money would have saved it all, Spencer said.

"We were almost broke. We were trying to keep the bank off our butt. We were fighting for our lives," Spencer said. "I just get so mad. We took him in out of love. And this is how he did us."

Times columnist John Romano and Times senior news researchers Caryn Baird and John Martin contributed to this report. Contact Corey G. Johnson at cjohnson@tampabay.com or (813) 490-7260.