Md. couple sue church, saying it reneged on $887,000 loan

Two former churchgoers say they were swindled out of a small fortune by the leaders of the Soul Factory, a large African American church in Prince George's County -- accusations the church denies.

In a lawsuit filed against the church, the married couple, Jose and Yvette Strickland, say they lent nearly $900,000 under a verbal agreement to the Soul Factory so that it could open a satellite church in Atlanta. The church says the money was a gift.

"It was not a loan; it was a donation," said Timothy Obitts, a lawyer hired by the church. He said the church is in the process of filing a motion to dismiss the lawsuit.

The suit, filed Sept. 30, has surprised members of the Soul Factory, a popular church among young blacks in Forestville. The church is known for its use of hip-hop and pop culture and its contemporary plays, such as "Two Angry People in Love Going Thru Hell." It draws a few thousand congregants each Sunday.

According to the Stricklands, they began regularly attending the Soul Factory in 2000. In 2005, the church's founder and pastor, Deron Cloud, began courting Jose Strickland's financial help, the couple said, by inviting him to Wizards basketball games, on trips to Las Vegas and other activities and introducing him to top church leaders.

In 2006, the Stricklands say, Cloud asked Jose for $1.5 million to help open a satellite church in Atlanta. A few weeks later, Strickland, Cloud and other church leaders discussed financing the Atlanta church while in a private booth at a professional fight in Atlantic City, the couple said.

Months later, according to the lawsuit, Strickland gave the church $886,500, which Jose, a mortgage banker, and Yvette, a real estate agent, said they raised by mortgaging several properties they owned to a private lender.

The Stricklands said that Cloud and the church initially made nine payments to the private lender but stopped making payments in mid-2007. In their lawsuit, the Stricklands allege that the non-payments led to the loss of seven mortgaged properties to foreclosure and $6.8 million in financial losses. Both have filed for bankruptcy.

Obitts, the church's attorney, declined to go into detail about the lawsuit but said the church did not borrow money from the Stricklands. "This guy's allegedly a sophisticated businessman," Obitts said, "and yet he claims everything was done verbally. It doesn't make sense."

When asked why they gave the church such a large amount without any written agreement or contract or a structured loan, Jose Strickland said, "It was a trust situation, because they were a church, because we had a relationship."