Former pastor accused of fraud

From behind the pulpit to behind bars.

Ronald E. Satterfield, a former Charleston preacher who faces civil charges in a multimillion-dollar investment scheme, found himself in jail Friday, accused of using false documents to take out a $250,000 loan in the name of his former church.

Satterfield, 63, who was pastor at St. John's Reformed Episcopal Church on Anson Street, is charged with "crimes against a federally chartered or insured financial institution," more commonly known as bank fraud.

He was being held in the Charleston County jail on $50,000 bail set Friday by Magistrate Linda S. Lombard.

The arrest comes two months after investigators at the U.S. Commodity Futures Trading Commission sued Satterfield, alleging he was part of a $3.3 million Ponzi scheme that wiped out savings for dozens of small investors. He solicited some business from members of his congregation at St. John's, though most account holders lived in a lakeside community in Michigan, according to court documents.

Federal investigators who were pursuing that case are pressing civil charges that didn't give them the power to arrest Satterfield. The more recent bank fraud charges are treated as a criminal offense.

Since the charges surfaced, Satterfield has renounced his license to preach in the Reformed Episcopal Church.

According to the civil charges, Satterfield traded money he collected from more than 70 people through two businesses that were based out of the Gothic Revival-style church where he preached.

Shortly after the first charges were filed, Satterfield wrote his defense to a federal judge, characterizing the scheme as an honest business venture that faltered in an unforgiving type of trading. In a series of letters, he asked both for the court's mercy and said that his actions "resulted in loss not only of money but in matters of the heart."

"The bottom line: I in no way was attempting to run some type of money scam as the complaint accuses. I never had an intent to defraud anyone. I did not use the money in Ponzi-style to accumulate personal wealth," he wrote. "I take responsibility for this losing, but risk was emphasized from day one."

In the criminal case, a Dec. 17 Charleston police incident report stated that a member of the congregation had contacted Carolina First Bank to ask why the congregation was making payments on a loan account the church leaders were unaware of. According to the report, Satterfield forged documents to obtain the loan in September 2006, and he transferred the money from the church's account to his own account in September 2010.

Several years before that loan, Satterfield began trading money on foreign exchange markets, which involves making profits off the changing values of different currencies.

The venture can be profitable, but it's time-consuming. Satterfield said he woke up at 3 a.m. and traded for several hours before tending to his church duties, according to court documents.

Satterfield told the judge in his letter that investors were warned of the trading risks. He said that representatives who funneled money to Satterfield instructed investors to put up only discretionary money, in case the venture failed.

But few seemed to listen to that warning. Satterfield's clients were often older investors who used money from their retirement savings. Investors put in as much as $800,000, though most investments were less than $20,000, according to court documents.

Documents filed in U.S. District Court in Charleston said Satterfield lost virtually all of the $1.9 million that he did invest before his companies failed in early 2009.

In his letter, Satterfield put some of the blame on a $295,000 loan that he granted to a partner to buy a house -- an amount that was supposed to be immediately repaid. With that money tied up and unable to be traded, Satterfield said he could no longer make trades "with adequate leverage," according to his letter.

The court filings also include an apologetic letter that he sent to investors in March 2009, informing them that trading had stopped and their money was gone.

U.S. District Judge Richard Gergel postponed Satterfield's initial hearing, then canceled it indefinitely. It hasn't been rescheduled.

Satterfield wrote in November that he didn't have money to pay for legal representation, lived in a church-owned house and earned a $2,680 monthly stipend for his religious position. His wife teaches at a Mount Pleasant school for children who have learning disabilities.

Facing civil fines, Satterfield warned in the letter that he has little money to offer victims.

"I am not able to produce any financial means to resolve issues," he wrote. "There simply is not any money."

Satterfield was arrested Thursday, said Charles Francis, a spokesman for the Charleston Police Department.

At Friday's bond hearing, he gave the church's address as his own. The Rev. Alphonza Gadsden Sr., bishop ordinary of the Reformed Episcopal Church's Diocese of the Southeast, said the organization gave him approval to remain there for 90 days or until he found a place to live.