COLORADO: Former rector Don Armstrong found guilty of financial misconduct

August 7, 2007

The Rev. Don Armstrong, former rector of Grace and St. Stephen's Episcopal Church in Colorado Springs, has been found guilty on all counts of financial misconduct presented to an Ecclesiastical Court of the Diocese of Colorado that has been reviewing the evidence since July 31.

The preliminary judgment was made public August 8 by the five members of the Ecclesiastical Court who unanimously found Armstrong guilty of diverting $392,409 from the parish's operating fund and committing tax fraud by not reporting $548,000 in non-salary income and benefits to state and federal tax authorities.

On other counts of misconduct, Armstrong has been found guilty of receiving illegal loans totaling $122,479.16 in violation of Diocesan Canons; unauthorized encumbrance and alienation of Grace Church's real property; violation of the temporary inhibition placed on Armstrong; the improper use of clergy discretionary funds; and failure to maintain proper books of account.

A three-hour evidentiary hearing, held at St. John's Cathedral in Denver July 31, 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.

"Last week's evidentiary hearing before the Ecclesiastical Court is the culmination of a well-defined disciplinary process established by the Canons of the Episcopal Church whereby serious allegations of wrongdoing against any member of the clergy can be thoroughly and impartially investigated, and throughout which the accused has numerous rights and protections," said an August 8 diocesan news release announcing the Ecclesiastical Court's verdict.

Bishop Robert O'Neill of Colorado attended the evidentiary 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.

The preliminary judgment marks the beginning of a 30-day period during which all parties have an opportunity to respond, after which the court will issue a final judgment along with recommendations for sentencing to the bishop, the statement said.

Under the Canons of the Church, it is the bishop's responsibility to impose judgment. The bishop can, at his discretion, lessen the court's recommended sentence but cannot increase it.

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.

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.

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