SAN JOSE — A federal grand jury has indicted a former Saratoga church elder and his wife on charges they bilked a wealthy foreign benefactor and the church out of more than $7 million.
Jonathan Chang, 60, and Grace Chang, 57, were arrested Monday at their home in Cupertino, according to prosecutors.
The couple is accused of setting up a bogus foundation, Home of Christ Associates, to defraud the benefactor, identified in the indictment only as C.W., and the Home of Christ Christian Church.
As a church elder, Jonathan Chang was responsible for managing finances, according to the indictment, which was unsealed Monday following the couple’s initial appearance in U.S. District Court in San Jose.
Starting in 2002, monthly donations from C.W. meant for the church were instead funneled into the foundation, which was not associated with the church, according to the indictment.
The Changs also allegedly convinced the benefactor in 2004 to provide a $2 million donation and a $3 million loan for a new building, but that money ended up in accounts controlled by the couple.
The church, meanwhile, constructed a new building in Saratoga using $3.9 million loaned by its members. The loans were to be repaid with proceeds from the sale of the former building in San Jose.
While the donor believed the foundation was associated with the church, the church believed the foundation was controlled by the donor for the benefit of the church, and the couple convinced the church to transfer more than $892,000 to the foundation, according to the indictment.
In addition, prosecutors said the church agreed to sell its new building to the foundation to repay the short-term loans.
Following the expiration of a 10-year, rent-free lease in June 2015, the Changs threatened to evict the church and started charging $10,000 per month in rent, according to the indictment.
In total, between 2004 and January 2016, the couple allegedly bilked the benefactor and the church out of $7.4 million.
The Changs are charged with one count of conspiracy to commit wire or mail fraud, four counts of wire fraud, one count of conspiracy to commit money laundering and three counts of money laundering.
If convicted, the couple faces a maximum of 20 years in prison and hundreds of thousands of dollars in fines.
The Changs, who are out of custody on $200,000 bond, are slated to return to court Thursday for identification of counsel and further bond proceedings, according to prosecutors.
Contact Jason Green at 408-920-5006. Follow him at Twitter.com/jgreendailynews.
