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Thursday, April 7, 2005 - Page updated at 12:00 AM

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Oregon pair may reach fraud plea deal

PORTLAND — The onetime leaders of a now-defunct Wilsonville church may strike a deal with federal prosecutors that could send one of them to prison for three years.

Pastor Mary Morrissey and her husband, Edward Morrissey, once led the 4,000-member Living Enrichment Center in Wilsonville, which collapsed last year amid charges of financial improprieties after congregants lent thousands of dollars to the church.

Edward Morrissey, 57, intends to plead guilty to one count of money laundering, said his lawyer, Michael Levine of Portland. Federal prosecutors are recommending that he be sentenced to three years in federal prison.

Mary Morrissey, 55, will not be charged with any crimes under the pending deal, said Levine and Steve Ungar of Portland, who represents Mary Morrissey. The Morrisseys both have signed a consent decree with state securities regulators agreeing to repay $10.7 million to creditors.

Mary Morrissey will be required to put 25 percent of her disposable earnings into an account to repay congregants who lent money to her church and investors in New Thought Broadcasting, an ill-fated media company founded by Edward Morrissey.

Living Enrichment Center filed for Chapter 7 bankruptcy in December 2004 to liquidate the church's remaining assets.

Mary Morrissey will declare personal bankruptcy, but she won't try to have her financial obligation to former churchgoers and New Thought Broadcasting investors discharged in her bankruptcy, Ungar said.

In a statement, Mary Morrissey apologized to her congregants.

"I am very sorry that somewhere between dreams and reality and faith and logic, I lost my perspective and, without meaning to, led people whom I care for deeply down a risky financial road that would eventually end in bankruptcy for the church and myself," the statement said.

The deal has upset some former Living Enrichment Center members.

"Here's a woman who started this church from her living room and grew into an organization with thousands of people. But while this beautiful thing was being built, money was being diverted. I would like to know where and by whom," said John Trudel of Newberg, Ore.

Trudel and his wife made two loans totaling $100,000 to Mary Morrissey in 2000 and 2002. The terms of the loans called for the first to be repaid in a year, the second in 75 days.

Though the Trudels got interest payments for a while, the principal remains outstanding.

Copyright © 2005 The Seattle Times Company

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