Evidence of financial misconduct by the Rev. Don Armstrong, former rector of Grace and St. Stephen's Episcopal Church in Colorado Springs, was presented to the Ecclesiastical Court of the Diocese of Colorado on July 31.
The three-hour evidentiary hearing, held at St. John's Cathedral in Denver, featured testimony from Sheri Betzer, a tax fraud examiner and former IRS agent who investigated parish financial records ranging over a 10-year period, and Karl Ross, an attorney and co-executor of the Clarice C. Bowton Trust, established to fund seminarian scholarships, which Armstrong is accused of misusing for personal purposes.
Diocesan attorneys Hal Haddon and Ty Gee presented 650 pages of affidavits and documentary evidence related to the year-long investigation of Armstrong. They included a written statement from former parish bookkeeper Sara Hopkins, who said Armstrong told her the church had approved paying his children's educational expenses with money from the trust. Ross testified that Armstrong's children were not eligible to receive scholarships.
The diocese says Armstrong diverted $392,409 from the parish's operating fund and the Bowton Trust for apartments, computers, cars and cell phones for himself and his family, and committed tax fraud by not reporting $548,000 in non-salary income and benefits to state and federal tax authorities.
Some of the funds were represented to parish leadership as going for the support of the Anglican Communion Institute, a conservative think tank whose board dissolved their connection with Armstrong in April.
Armstrong is also accused of using discretionary funds, which by canon are designated for the support of the poor, for conference travel or entertainment for visiting dignitaries.
Bishop Robert O'Neill of Colorado attended the hearing, but neither Armstrong nor his attorney, Dennis Hartley, was present. Claiming lack of jurisdiction, Armstrong earlier filed a motion to have the charges against him dropped, which the court denied.
Armstrong and some 340 members of the 2,500-member congregation voted to join the Nigeria-based Convocation of Anglicans in North America (CANA) as Grace CANA Church in May and continue to occupy the parish's property. Grace and St. Stephen's Episcopal Church continues to meet at nearby First Christian Church until a civil lawsuit filed with the El Paso County District Court is decided.
"This is nothing more than (O'Neill's) witch hunt of Don Armstrong because of his conservative views," said Hartley.
The Ecclesiastical Court is composed of three clergy and two lay people, elected at Diocesan Convention. The court operates independently of the diocesan bishop and is governed by the Episcopal Church's canons.
The court is expected to issue a preliminary order no later than early next week. After that, both parties have 30 days to comment before the court issues a final order -- along with sentencing recommendations, if applicable -- to the bishop. Under Title IV, sentencing could range from verbal admonition to removal from the priesthood.