Alleged Church Ponzi Schemer Arrested on Federal Fraud Charges

Ephren Taylor, once a financial adviser to congregants from some of the most prominent mega-churches in the country, was arrested today on federal fraud charges.

The Department of Justice announced in a news release that Taylor, 31, was arrested on a federal indictment charging him and his business partner with "defrauding investors across the country of more than $5 million."

The charges allege that Taylor, the former CEO of City Capital Corporation, and the company's former COO Wendy Connor "participated in a conspiracy to defraud investors" between April 2009 and October 2010, and allegedly managed to defraud "hundreds" of people nationwide, according to the DOJ.

Taylor surrendered to the U.S. Secret Service in Kansas City, Mo., this morning following an arrangement with the agents handling the case. A court date has yet to be announced.

His attorneys, Chris and Jane Bruno, declined to comment on their client's case other than to tell ABC News in a statement that, "Mr. Taylor voluntarily surrendered to law enforcement immediately upon learning of the indictment and he is anxious to address the pending charges."

Watch the full story on "Nightline" tonight at 12:35 a.m. ET

Taylor's arrest comes over two years after ABC News first aired an investigation into his lifestyle and his "Building Wealth Tour," in which Taylor crisscrossed the country touting wealth management seminars and followed-up with private meetings with interested investors.

Some congregants from some of the most prominent mega-churches, including Bishop Eddie Long's New Birth Missionary Baptist Church in Lithonia, Ga., and Joel Osteen's Lakewood Church in Texas, turned over their life savings to Taylor. The DOJ claims that more than 80 people from Georgia alone "lost more than $2 million because of Taylor's scheme."

New Birth told ABC News in a statement today, "It has always been our prayer for a resolution to this matter in which many lost their investments. Our hearts go out to anyone who suffered losses, and we pray for healing."

The DOJ alleges that Taylor pushed churchgoers to invest in small businesses he knew wouldn't be profitable, and made up revenue numbers. The agency also claims that Taylor pushed people to invest in "100 percent risk free" sweepstakes machines, or computers with games where players can win cash prizes.

The Securities and Exchange Commission has been looking into Taylor for years and entered a judgment against him in 2013, ordering him to pay back $14 million owed to investors, including interest and fees. The SEC claimed Taylor spent his investors' money on his car payments, credit card bills and rent on a New York City apartment.

The SEC also alleged that he doled out cash to pay for studio time for the musical career of his wife, Meshelle, with the money that came pouring in. The couple even made a splashy music video starring Meshelle Taylor draped in white fur and diamonds. The name of the song was "Billionaire."

Taylor first gained national attention with a rags-to-riches story of growing up dirt poor in Blackwater, Miss., before developing a video game that he said turned him into a teenage millionaire.

In a 2007 interview with ABC News, when asked how much he was worth, Taylor said, "Maybe $20 million on a bad day."

His personal history, coupled with what he claimed was a philosophy of "socially conscious investing," made him popular with church congregations.

Lillian Wells, who met privately with Taylor in 2009 after hearing him speak at New Birth told ABC News in an interview last year that Taylor convinced her to invest her entire life savings in a North Carolina-based real estate venture, which he claimed was turning around homes in inner cities. In exchange, she said she was promised a 20 percent return on her money.

But, Wells said, when she wanted to recoup her initial investment, Taylor disappeared. Wells said she was forced to file for bankruptcy in September 2012.

Lisa Conway also became suspicious of Taylor after she went to work for him in 2010, but then she started to think that the money coming in was lining Taylor's pockets. In an interview with ABC News in 2012, Conway said investors began suspecting trouble as well. Panicked families began banging down the doors of the North Carolina office where she and Taylor worked, she said.

In Texas, Gary and Anita Dorio first met Taylor in Joel Osteen's Lakewood Church, and later gave Taylor $1.3 million, their life savings and her mother's retirement. And for about a year, they say it seemed like a good deal. At the beginning, Taylor was sending them monthly checks for $11,000.

The Dorios told ABC News in a previous interview that the paperwork Taylor provided was very convincing. They thought they were investing in an inner city laundromat, a juice bar and a gas station. But ultimately, they said they discovered that many of the businesses they thought they were investing in never even existed. In the end, the Dorios did walk away with a rental property in Cleveland, but it came with a catch: A $67,000 bill for back taxes on the property. The head office of the businesses Taylor listed in their documents was nothing more than a post office box inside a UPS store in Tennessee.

While the Dorios said they are still devout Christians, they have left Lakewood Church. Anita Dorio acknowledged that the church was careful not to explicitly endorse Taylor.

Lakewood Church told ABC News last year they opened their doors to Taylor to speak on the subject of "Biblical financial principles," but "when he began to promote his services as a financial adviser," he "was stopped from doing so."