Former Orange County Church Pastor Sentenced to 14 Years in Federal Prison for Orchestrating $ 33 Million Scam That Defrauded Investors | USAO-CDCA
SANTA ANA, California – The former pastor of the Westminster-based Healthy Self Church was today sentenced to 168 months in federal prison for orchestrating a church-based investment scam that grossed more than $ 33 million of dollars.
Kent RE Whitney, 39, formerly of Newport Beach but currently residing in northern California, was convicted by U.S. District Judge Josephine L. Staton, who also ordered him to pay $ 22,662,668 in restitution. Whitney pleaded guilty in November 2020 to a two-count information accusing her of mail fraud and filing a false federal income tax return.
From September 2014 to April 2019, Whitney conspired to defraud investors through the Church of the Healthy Self (CHS), a not-for-profit corporation, and its related entities, including CHS Asset Management, Inc. Whitney founded these entities, operated them from a shopping center in Westminster, and claimed to be the pastor of CHS.
Under Whitney’s direction, CHS representatives have appeared on television and in live seminars at CHS offices to solicit investments in CHS Trust, the church’s investment arm. Recordings of these appearances were frequently uploaded to YouTube.
During these appearances, at Whitney’s request, representatives of the CHS made false or misleading representations, including: CHS Trust guaranteed an annual rate of return of 12%; CHS Trust guaranteed a risk-free return of capital because it was insured by the federal government; the worst return obtained in the previous five years was a profit of 1.5% for the month of January 2015; the traders used by CHS had not lost money for 15 years; and CHS has been audited by the accounting firm KPMG.
In fact, little investor money went into trading accounts.
Based on these false statements, victim-investors sent more than $ 33 million to the CHS from 2014 to 2019. As part of the program, Whitney ordered that monthly statements be sent to victims containing false reports of the victims. returns on investment. Whitney intended to trick victims into believing their money had been invested and was consistent with false claims made by CHS officials. Whitney also made around $ 11 million in Ponzi-type payments to investors, taken from money brought in by subsequent victims.
Whitney also knowingly and willfully signed and filed a false federal income tax return stating that her total income for the 2018 tax year was $ 17,539. In fact, as Whitney knew, her real income for that year was at least $ 452,872, of which about $ 435,333 came from Whitney’s cheating at CHS. The resulting tax loss was at least $ 130,808.
The FBI and IRS criminal investigation investigated this matter. The Securities and Exchange Commission provided substantial assistance with the investigation.
Assistant United States Attorney Gregory W. Staples of the Santa Ana branch continued this case.