Three pastors settle illegal loan charges brought by N.Y. AG

NEW YORK (Legal Newsline) - New York Attorney General Eric Schneiderman announced a settlement on Thursday with three pastors to resolve allegations they took illegal loans against church funds to pay for their lifestyles.

Donna and Carl Keyes, the husband-and-wife pastors of Glad Tidings Tabernacle Inc., allegedly made a series of illegal loans to themselves, including a loan to purchase a New Jersey home. The Keyeses and Mark Costantin, the former executive pastor of the church, allegedly violated fiduciary duties and caused the waste of church assets. The Glad Tidings board of directors also allegedly breached its fiduciary duties when it allowed the loans.

"Carl and Donna Keyes and Mark Costantin abused the trust of their congregants and used Glad Tidings Tabernacle as their personal bank," Schneiderman said. "As with any not-for-profit entity, those who run religious organizations are bound by the requirements of New York law governing the administration of charitable assets. The law forbids officers and directors, and that includes ministers, from taking any loans from the entity they serve -- much less loans to finance personal expenses and lifestyle choices."

Under the terms of the settlement, the Keyeses must return $1,231,105 they allegedly took and failed to pay back. Costantin must return more than $482,397.53 to the church. Three other members of the church's board must pay $50,000 for attorney costs. The Keyeses and Costantin are permanently banned from acting as a fiduciary of any New York not-for-profit or religious corporation.

Glad Tidings has replaced its old board and is now being supervised by the New York District Assemblies of God.