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Regulation and Compliance > Federal Regulation > SEC

SEC Smites Pastor of Fake Church Over Ponzi Scheme

Jeff Berman By Jeff Berman

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What You Need to Know

  • David Lee Parrish was one of two pastors charged with running a $33 million Ponzi scheme.
  • The Church for the Healthy Self held no religious services but ran an investment program promising 12% returns.
  • The SEC barred Parrish from the industry. He pleaded guilty to conspiracy in 2020 and is in prison.

The Securities and Exchange Commission on Friday barred one of two California pastors who had been charged in 2019 with operating a $33 million Ponzi scheme.

As part of an agreement, David Lee Parrish, 50, can no longer associate with any broker, dealer, advisor, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization, and also can’t participate in any offering of a penny stock ever again, according to an SEC order filed on Friday.

In 2019, the SEC announced fraud charges and an asset freeze against Parrish and Kent R.E. Whitney, founder of a fake church called The Church for the Healthy Self.

As part of their Ponzi scheme, they promised high annual returns with minimal to no risk to investors in the Vietnamese community of Orange County, California, according to the SEC.

Whitney founded the phony church three months after being released from federal prison for orchestrating a prior investment scheme involving commodities, the SEC said in 2019.

Undeterred by prison, Whitney established a church to defraud more investors after he was released in 2014, according to the SEC. Shortly thereafter, he became an ordained minister through an online program. A month later, he formed The Church for the Healthy Self, purportedly as a nonprofit, religious organization.

The church’s websites provided the facade of a “virtual church.” For example, they provided links to YouTube channels offering religious videos and online prayer request forms. But The Church for the Healthy Self did not hold religious services typically associated with churches. The primary mission of the church appeared to be obtaining investor funds, according to the SEC.

The Church for the Healthy Self’s investment program, CHS Trust, promised investors tax-deductible, guaranteed and insured returns of at least 12%, via reinsurance investments and options trading, according to the SEC.

Parrish, who assisted Whitney’s earlier fraud, joined his friend as a co-pastor of the fake church and as the purported director of CHS Trust.

Prior to the SEC filing its charges in 2019, the FBI obtained a criminal seizure of the funds in CHS Trust’s main account, citing potential violations of federal wire fraud and money laundering statutes as the predicate for the seizure. Despite the FBI seizure, Whitney and Parrish continued to solicit investors.

In March 2020, Parrish pleaded guilty to one count of conspiracy. In November 2021, he was was sentenced to 12 months and one day in prison followed by three years of supervised release and ordered to pay $166,574 in restitution.

Parrish is incarcerated at Terre Haute FCI in Terre Haute, Indiana, according to the SEC order filed Friday.

Jeff Berman

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