By Stephenie Steitzer Post staff reporter
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Rev. Larry Davis, pastor of First Baptist Church of Cold Spring, Ky., pleaded guilty this morning to charges that he lied on a loan application and evaded paying his taxes.
Davis appeared before U.S. District Court Judge David Bunning in Covington and pleaded guilty to two counts of a seven-count indictment.
Davis' sentencing is scheduled for Feb. 17. He faces between 24 and 30 months in prison with no chance of parole. He remains on bond.
The preacher - who was among those who helped bring the Billy Graham crusade to Cincinnati - admitted that he made a false statement to receive a bank loan from Fifth Third Bank and failed to pay his U.S. income taxes.
Wearing a dark suit and tie, Davis arrived in court some 10 minutes early, and quietly discussed the plea agreement with his attorney, Patrick Hanley of Covington.
Davis and Hanley refused to comment after the proceeding.
A half-dozen people who broke away from Davis' church, including whistleblower and former church treasurer Daryl Neltner, sat in the courtroom behind Assistant U.S. Attorney E.J. Walbourn. None would comment after the hearing. No one appeared on Davis' behalf.
As part of the plea agreement, the remaining five charges were dismissed.
Praised for his strong support for the city of Cold Spring and his passion for racial unity, Davis oversaw the growth of First Baptist in one of the largest Baptist churches in Northern Kentucky. But federal authorities said he stole hundreds of thousands of dollars from his flock and converted it to his personal use.
The FBI and IRS spent 14 months working on the case after state officials investigated Davis for four months. He was indicted June 17 on charges of theft, fraud and tax evasion.
A federal grand jury had charged Davis in a seven-count indictment with stealing $792,000 from the church and not reporting $845,000 of income to the IRS. For two years according to the indictments, Davis never bothered to file an income-tax form.
Bunning instructed Davis to file income-tax forms for 2002 and 2003 before his sentencing date. Davis also must work with the IRS to settle his outstanding tax bill. The IRS is permitted to invoke penalties or work out a deal with Davis.
The grand jury said Davis lied to a bank to get money for church construction and, through church bank accounts he controlled, diverted $476,000 from one account and $316,000 from another to himself from 2000 through 2003.
Davis also sometimes made cash withdrawals from a church bank account at automatic teller machines at racetracks, federal authorities charged.
Authorities said the charges stemmed from Davis' handling of church money after the church got $3.5 million of financing from Fifth Third Bank and started work on a new building. At some point, Davis took over as general contractor of the project.
Money was taken out of various accounts that were set up with the proceeds from the loan and used for personal purposes, authorities said in announcing the indictments.
Davis has been free on bond. But he had to post his Cold Spring house as bond.