Walter Diggles, pastor of Lighthouse Church of God in Christ in Jasper, Texas, was arrested and charged with fraud, as were his wife and daughter.
In December 2015, the Beaumont Enterprise reported:
The executive director of the Deep East Texas Council of Governments schemed with his wife and daughter to illegally divert more than $1.3 million in federal grant money intended for hurricane assistance, federal prosecutors said Monday.
Walter Diggles, Rosie Diggles and Anita Diggles were jointly charged with conspiracy to commit wire fraud.
Walter Diggles, 62, was charged individually with eleven counts of wire fraud, two counts of theft from a program that receives federal funding, and three counts of money laundering.
Rosie Diggles, 61, his wife, also was charged individually with 10 counts of wire fraud and one count of money laundering.
Anita Diggles, 39, faces only the conspiracy charge.
The government also seeks the forfeiture of $1.3 million, which approximates the amount of the Diggles’ theft.according to the federal indictment.
All three pleaded not guilty Monday in a Beaumont federal courtroom.
Attorneys for the Diggles family called the charges “sensational, but unsubstantiated.”
Walter Diggles has been DETCOG director since 1990 and pastor of the Lighthouse Church in Jasper County since 1980, the indictment stated.
He also ran the Deep East Texas Foundation, a non-profit created in 2005, according to the indictment.
DETCOG, though not a government agency, operates on behalf of an association of city and county governments. It received federal, state and local grant funds to finance and administer programs throughout a 12-county region.
According to the indictment, the Deep East Texas Foundation received about $4.4 million in Social Service Block Grant funding from 2007 to 2012.
The foundation continued to conduct operations even though the Texas Secretary of State forfeited its charter around 2007, according to the indictment.
Walter Diggles defrauded the federal government by inflating the amount his foundation needed for social service programs and taking the difference for personal use, the indictment alleges.
Walter Diggles had single-signature authority over the foundation’s bank account at First National Bank in Jasper, where he also received monthly payments for his service on the bank’s board, according to the indictment.
In a brief statement on the courthouse steps before the hearing, the Diggles’ attorneys characterized the indictment resulting from the government’s 2014 raid of DETCOG headquarters in Jasper and the two-year investigation as a “fundamental misunderstanding of how federal and state block grants work.”
Ryan Gertz, lead attorney for Walter Diggles, said the DETCOG block grants are given on a reimbursement basis rather than by contract and that “the entire indictment reflects a misunderstanding of this simple fact.”
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According to a July 19, 2017 article in the Beaumont Enterprise, jury selection has begun, with opening arguments expected later today.
