Former Cleveland, Tennessee, church administrator to plead guilty to wire fraud

Staff photo / The Joel W. Solomon Federal Building and United States Courthouse is seen downtown on Jan. 11, 2019, in Chattanooga.
Staff photo / The Joel W. Solomon Federal Building and United States Courthouse is seen downtown on Jan. 11, 2019, in Chattanooga.

A former business manager at a Cleveland, Tennessee, church is set to plead guilty to felony wire fraud for alleged misuse of tens of thousands of dollars of church money for personal expenses.

While in charge of finances at the Broad Street United Methodist Church, David Michael Apps avoided paying payroll taxes, passed himself unauthorized checks and used church credit cards to buy things, including plane tickets, firearms and watches, according to filings in federal court.

(READ MORE: FBI investigating Cleveland, Tennessee, church administrator for embezzlement)

Apps entered a plea agreement this week, court filings show, instead of sending his case to a grand jury. He has yet to officially plead guilty to the single charge, lawyers in the case said, but should do so in the next several weeks. He will receive a sentence following his plea.

Since the FBI began investigating the fraud, Apps has been cooperating with authorities, said his lawyer, Lee Davis.

"We have turned over hundreds of thousands of dollars of assets to the church," Davis said in a phone interview.

Those assets include cash and other assets, which Davis declined to specify.

Steven Neff, an assistant U.S. attorney in Chattanooga, said some of the non-cash assets will likely be liquidated and sold as part of an effort to make the church whole.

An affidavit for a search of Apps' East Brainerd home and storage unit said an FBI investigation found Apps had spent at least $61,000 of the church's money on firearms, gun accessories and other outdoor supplies. He also made more than 100 charges, totaling around $177,000, on the card for his own firearms business, FMJ Supply, court filings state.

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Apps also reportedly used church credit cards to pay for plane tickets and a hotel stay for himself and his daughter, multiple luxury watches, a watercraft, boating insurance and storage unit space, the affidavit says.

While working at the church between 2014 and 2021, Apps handled its expenses and receipts, controlled its operating and brokerage accounts, maintained its checkbook and was the only person with online access to its bank account. He also oversaw donations and payroll for church employees, court documents state.

Broad Street United Methodist Church is part of the the Hiwassee District of the Holston Conference, the governing body for methodist churches throughout East Tennessee. District and conference officials did not respond to emails and voicemails requesting comment by press time.

In 2020, Apps received a $3,500 check from the church to help with medical bills, after he said he was undergoing treatment for prostate and brain cancer. He then received several more checks, without church authorization, and lied when questioned about it, court filings state. An FBI investigation did find Apps was being treated for cancer, but an affidavit for a search warrant did not say whether his bills were paid using money from the church.

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Apps' fraud also included underpaying the payroll taxes owed by the church, court filings state. As a result, the church fell behind on taxes by more than $900,000, according to documents filed this week.

"Not paying the taxes left him more money to steal, I guess," Neff said. "It was just another consequence to the church as a result of his criminal activity."

The investigation also reportedly found Apps had written checks appearing to reimburse himself for construction costs that he had already paid from the church's account, essentially doubling costs for certain invoices.

As part of his plea agreement, Apps was also ordered to forfeit $4,200 to the federal government, which court documents say was seized in the April search.

There may also be additional restitution payments required as part of Apps' sentence, which would go to the church instead of the government.

Staff writers Andrew Schwartz and La Shawn Pagán contributed to this report.

Contact Ellen Gerst at egerst@timesfreepress.com or 423-757-6319.

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