Let Us Prey

One Church in the HUD Rehab-Loan Scandal Says It Was a Lamb Led to the Slaughter

It's possible that these kind and sincere people, who greet strangers in a low-key, friendly way, would be crushed by the details of the court documents.

Anastasi's message during the January 14 service includes an acknowledgement that everybody on earth is a sinner. That, like the rest of the service, has a Pentecostal flavor, spiced with electrified live music, some sweet soul singing, tambourines, and altar calls to Christ.

The ritual of passing the collection plate provides a striking contrast to the way the church is portrayed in court documents.

"We're going to continue to worship with our tithes and offerings," Anastasi intones to about 700 people in the church's cavernous auditorium, adding quietly, "Can you sense the presence of the Lord here?"

He calls upon an assistant to read Psalms 116:12: "What shall I render unto the Lord for all his benefits toward me?" The flock, told by Anastasi to be quick and orderly, walks down to the front and deposits checks and cash-filled envelopes into big blue buckets that are carried backstage by the ushers.

That doesn't make Word of Life different from just about any other church or synagogue. Some of the wounded people and politicians of Harlem and Brooklyn have referred to the nonprofits pinpointed in the scheme as "shams" and illegitimate. And one of the entities in the scandal, St. Stephen's, is believed to be nothing more than a name and a mail drop trading on the name of a legit church in California. But Word of Life is a going concern, as real as any other church.

Anastasi conducts services in an old movie theater on the faded main street of downtown Freeport, a town of 40,000 on Long Island's South Shore. Word of Life runs a drug-rehab program and provides marriage counseling. People walk around town testifying that the church has helped save their lives. While church leaders pitch their evangelizing trips abroad, many congregants travel to private, interior places during the lengthy Sunday service and work on themselves.

The church operates ministries in struggling areas where home ownership is often just a dream; it has satellite churches in Far Rockaway, the Bronx, Brooklyn, and Harlem. Anastasi has gone international, planting churches in the Congo and Antigua, but he tries to be a strong political force closer to home. His January 14 sermon includes an announcement from the pulpit supporting mayoral candidate Jack Arias. "Jack, please stand up," Anastasi says, adding to his flock, "I think he has the most qualified credentials to be mayor."

Local politics isn't a new interest of Anastasi's. Thanks to his "impetus,"a Freeport chapter of the Christian Coalition was founded in 1996, according to The New York Times. Claiming a membership of about 150, Anastasi sent letters to three mayoral candidates, offering support if they promoted a "spiritual agenda," which the Times said required "taking a Christian stand on abortion, homosexuality, gay and lesbian rights" and "actively" supporting "new laws that will take back what Satan has stolen." The Times said the last reference was to issues like "prayer in schools."

Word of Life's believers would have a difficult time with some of the details as laid out by prosecutors in the HUD case:

  • A "cooperating witness" used by federal investigators, identified by authorities only as CW-1—but revealed earlier this month by the Voice to be defendant Frank Boccagna—told HUD investigator Danny Min that he "was required to pay Word of Life a $10,000 'donation' [or] . . . kickback for each house" he sold to the ministry, according to a federal criminal complaint.

  • In Morgenthau's criminal complaint against lawyer Kevin Gorry, investigators explain the "A-B-C" and "A-C" flips that artificially inflated the value of the properties (so the schemers could get the maximum allowable guaranteed loans), and the complaint says Word of Life was among "the [not-for-profit organizations] participating in this scheme."

  • The D.A.'s criminal complaint against mortgage banker Mike Fox specifically lists Word of Life's purchase of a building at 159 East 117th Street as being part of the sham flips and loans. The building was purchased for $220,000 on June 1, 1999, and was sold only two days later for $385,000 to Word of Life, which got a federally guaranteed mortgage loan of $384,766. The D.A.'s complaint against Fox says that "fraudulent representations" were made regarding that transaction and many others.

  • Morgenthau's complaint against underwriter Beth Copozzi, who, along with Fox worked for now-defunct Mortgage Lending of America, outlines the illegal manipulation of appraisal figures. "In particular," the complaint by detective investigator Joyce Lam of the D.A.'s office says, "this method of obtaining the appraisals occurred" with Word of Life's purchases of 149 East 121st St. on October 29, 1999, and of 125 West 126th Street on November 24, 1999.

    "As a result, in part, of the fraudulently completed appraisal reports that were ordered by [Copozzi]," the criminal complaint says, "the nonprofits were able to obtain federally guaranteed mortgages. . . . "

    Boccagna told investigators, according to court documents, that Graynor hooked him up with Word of Life in mid-1997 and they started making deals with Fox.

    A source close to the investigation tells the Voice that the nonprofits were induced to participate by being told that they wouldn't have to do rehab of the brownstones or manage them as rentals or sell them. Boccagna and other investors agreed to handle all of that in return for their keeping most of the money. Such management deals aren't necessarily illegal, say investigators, but control of the projects by the investors is forbidden. The alleged coverup of the investors' role resulted in numerous charges of filing false documents against most of the defendants.

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