Kent Covington and Diane McKinny indicted on wire fraud conspiracy charges

On Thursday last week, I missed a call from a reporter. Not taking time to listen to the voice mail, a few minutes later, I called them back.

“Have you heard? There were more members indicted today. Kent Covington and Diane McKinny…
“I know them…”
It’s Marion Kent Covington – right? Yes, I replied. Wire fraud involving unemployment benefits…

My mind started racing and my phone started going off with message alerts. My email started filling up. A little later came a call from another reporter asking if I heard. Someone else called asking if for sure Diane McKinny was a WOFF member.

Thus began the next public unveiling of more details of the UI scheme first reported in September of 2017 by the Associated Press. In May of this year, the news was confirmed by the guilty plea of Dr. Jerry Gross and his son, Jason Gross. They plead guilty on May 25th to one count of wire fraud and are waiting for their sentencing. Each was assigned a $200,000 unsecured bond.

Jerry and Jason were charged through a Bill of Information and waived the indictment process- affirming the information presented by the Federal Attorney and pleading guilty without a trial.

Kent Covington and Diane McKinny face a different process. They are facing the indictment and will go through some additional steps. Yes, the recent press release reminds us all that Covington and McKinny are presumed innocent until or unless proven guilty beyond a reasonable doubt in a court of law.

Unless things change as the process goes forward, these two defendants appear to be headed for a highly visible and widely publicized trial. We thought the State vs. Brooke Covington trial was media frenzy, this will be bigger as these charges carry severe and far reaching penalties.

After reading the Bill of Indictment, it mystifies me to consider a plausible defense for Covington and McKinny. Would the US Attorney move forward without highly credible and irrefutable evidence? Would he even waist his time if there were doubts and holes in his case?

From the Bill of Indictment:

3. Beginning around the time of its initial implementation, and continuing until in or around March 2013, COVINGTON and MCKINNY, aided and abetted by others known and unknown to the Grand Jury, promoted the scheme to other business owners and managers in their community. At least five businesses implemented the scheme as designed by Covington and McKinny, resulting in substantial monetary losses to the State of North Carolina and the United States of America.

This reading leaves the door open for other business owners to be indicted. I read this as five OTHER business owners besides Covington. We know of one other, Dr. Jerry Gross.

14. b. Next, Covington called a business meeting at DCT and informed the remaining DCT employees that the company could no longer afford to pay their wages, and that they therefore would be placed on UI Benefits, but that Covington expected the employees to continue to work at DCT full-time in order to help the business survive. Covington used his position of authority within his church community, which included most, if not all, of the employees at DCT, to coerce the employees to comply.

No shock here. Kent walked in “God’s authority” when it came to business matters. And all former members said- Amen.

18. By September of 2009, several other businesses run by members of the same church community to which Covington and McKinny belonged, and employing many members of that church community, were facing financial struggles related to the economic downturn. Covington and McKinny promoted the fraud that Covington and McKinny had devised at DCT to other members of the church community….

c. After the scheme was successful at DCT, Covington implemented a variation of the scheme a second time, with McKinny’s help, at Integrity Marble, Inc., d/b/a Integrity Marble and Granite, another for-profit company that Covington owned and managed, in or about March of 2010.

d. Covington then implemented a variation of the scheme a third time at Sky Catcher Communications, Inc., a company he managed, in or about May of 2011.

Let me explain an underlying dynamic in this all-inclusive “church community.” Employees of the companies mentioned had very little, if any, say in how they were paid or when they worked. If they did not agree with that “scheme” posed as God’s will; they risked unemployment, church discipline and or worse to go against the “plan of God.” I have heard of some who disagreed and sought employment in another church-member owned company. They did it with fear and trembling- knowing the risk.

Isn’t that a sad and pathetic thing to have to navigate in order to keep attending a “church?” There are hidden and unforeseen costs when your membership becomes “all-inclusive.” Many present and former members have discovered this truth.

The first appearance hearing for Covington has been moved to June 25th. McKinny’s hearing is tomorrow, June 18th, in courtroom two on the third floor of the U. S. District Courthouse. This is the same room where Jerry and Jason appeared a few weeks ago. The hearing will start at 9:45AM, unless something changes before then.
As filed – Covington indictment
There is yet more drama to unfold as the hot summer of 2018 rolls along…

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(Copyright © 1954, 1958, 1962, 1964, 1965, 1987 by The Lockman Foundation ) This is post number 637.