Accused 'faith-based' con man faces judge

Accused 'faith-based' con man faces judge »Play Video
Stone Phillips III
TACOMA, Wash. -- For four years, KOMO News has been tracking a man trusted as a financial adviser by local church members. Several investors said Stone Phillips III swindled them out of tens, even hundreds of thousands of dollars.

On Wednesday, Philips finally faced a judge.

Phillips promoted himself as a "faith-based" financial adviser through his company, Northwest Financial Solutions. He held investment seminars at churches in King and Pierce counties.

But local investors say their investments didn't grow; instead, their money disappeared.

Laurie Blathers lost more than $40,000. Jojo AK of Tacoma lost more than $5,000. Cynthia Johnson-Colston of Seattle lost her retirement savings.

"We're talking about $116,000," said Johnson-Colston. "He was taking us all the time. He was sitting there, looking at us in the face."

At their home in North Carolina, Johnella and Emanuel McAuley said they lost more than $90,000 after meeting Phillips through a church in Tacoma. Another couple, Steve and Mary Shriver, lost a rental home.

KOMO News obtained video of Phillips at Mt. Zion Baptist Church in Seattle in late 2002. In it he presents a lengthy, almost eye-glazing recap of the historical evolution of the Federal Reserve System. He offers himself as someone able to help them with loans and investment advice in the future.

Consumers confirm Phillips also preyed on the faithful at St. John Baptist Church in Tacoma, Bethlehem Baptist in Tacoma, and Christian Faith Center in SeaTac.

KOMO's lengthy investigation linked Phillips to multiple social security numbers, more than a dozen different names, a driver's license from Missouri, and phone numbers and addresses in Missouri, Washington, California, Georgia and Arizona.

Despite complaints to state regulators, the attorney general and even the local police, Phillips remained free to move south, first to Vancouver then to Arizona.

The complaint that finally got him arrested came from federal officials, who claim Phillips defrauded the King County Housing Authority of more than $8,000 by contracting as a landlord for subsidized housing. Officials said he then illegally collected benefits by living in the house he was supposed to be renting out.

Many of the alleged victims thought they'd never see this day. But on Wednesday, more than four years after sharing their stories with KOMO News, they finally get their day in court.

Phillips is now charged with 21 felony counts for securities fraud, first- and second-degree theft, forgery and identity theft. Neither Phillips nor his defense attorney wanted to comment.

The prosecutor will argue Phillips engaged in major economic crimes that warrant a maximum sentence if convicted.

Opening statements get under way next week after jury selection, and all the consumers who talked to KOMO 4 News are expected to be in court to testify, including the McAuleys who are awaiting word to fly in from North Carolina.

The trial is expected to last two weeks.