By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
By Anna Merlan
By Lee Escobedo
By appearances, Kathy and Richard Kingsmore's world was picture-perfect. The thirtysomething couple had three kids and a $413,000 house on a quiet street, with purple impatiens bordering the manicured lawn.
The Kingsmores were shining stars at Prestonwood Baptist Church, a North Dallas megasanctuary that attracts a wealthy congregation. Richard was the music minister, paid well to create and arrange the theatrical extravaganzas that are part of the church's lavish services.
His wife, a sweet-smiling brunette, sang in the choir. She'd gained several pounds since winning the junior miss title of Pulaski County, Kentucky, as a teenager, but still had her sparkling smile and flawless retrousse nose.
While Richard ministered through music, Kathy managed business investments, working from the family's three-story house in the Bent Tree subdivision. The family traveled often and had a full-time housekeeper and nanny for their children.
"Her husband's position and their visibility in a large church, the neighborhood they lived in, the schools they sent their kids to--well, it just seemed right," says an acquaintance.
But this summer, the Kingsmores abruptly yanked their children out of private Christian school and fled, leaving behind their home, furniture, clothes, and the family cat.
The explanation for their sudden disappearance showed up later, attached with masking tape next to the forest-green front door of the Bent Tree house: a federal judge's order stripping the Kingsmores of control of their assets, including the house.
The federal Securities and Exchange Commission believes Kathy Kingsmore found more than fellowship among the other choir members and Sunday-school moms at Prestonwood Baptist. In a complaint filed in mid-September, the SEC alleges that Kathy Kingsmore bilked some 34 people--many from her church--out of more than $3 million. Kingsmore's husband, the SEC claims, also benefited from his wife's scheme.
The acquaintance who thought Kathy Kingsmore's life "just seemed right" allegedly lost more than $75,000 by investing money with her.
U.S. District Judge Joe Kendall has given the SEC permission to place the couple's assets into receivership, and has forbidden the Kingsmores from spending more than $5,000 a month--including attorney fees--while the investigation continues.
The Collin County District Attorney's Office is also after Kathy Kingsmore; it is investigating a $13,000 bad check she allegedly wrote to a car dealership in Birmingham, Alabama. The SEC believes she may have written more than $150,000 worth of other bad checks.
A Dallas luxury-home builder has stopped work on a 15-acre piece of land near Frisco after the Kingsmores twice bounced a $5,000 earnest money check, and Kathy Kingsmore is being sued in Florida by one of her investors.
Dozens of others who did business with Kingsmore--most too embarrassed by their own mistakes to speak publicly--want their money back, or at least some kind of explanation.
A soft-spoken woman with an almost childlike voice, Kingsmore, 35, spoke several times with the Dallas Observer, but only briefly. She denied the allegations contained in the SEC complaint. Carl Generes, Kingsmore's defense lawyer, issued a press release in early October. "Kathy S. Kingsmore is a God-fearing, lovely Christian woman," wrote Generes. "She is being falsely accused, and we will vigorously defend her. This is a government witch hunt initiated by a few who are promoting their own vindictive agenda. Ms. Kingsmore is innocent and is being tried in the court of public opinion by the government. She will prevail in a trial on the merits."
If the SEC's suspicions prove right, the "God-fearing, lovely Christian woman" intentionally lured dozens of her friends and family and fellow church members into a fraudulent scheme. But for now there are more questions than answers buzzing about the church where the Kingsmores worshiped and in the neighborhood they called home.
Why would a mother of three with such a comfortable life engage in a scam that ultimately forced her to take it on the lam? Where would a music minister's wife and former junior miss have learned how to conduct a financial con in the first place? How could her husband not have known about it? And how could Richard Kingsmore let his wife go forward with such an ill-fated scheme if he did know?
"None of it makes sense," says Kim Shoemaker, Kathy Kingsmore's stepsister, a secretary for the state of Kentucky's transportation department. "We were raised in the Christian ways of right and wrong."
On a videotape of the Christmas pageant held last December at Prestonwood Baptist Church, Kathy Kingsmore plays a starring role. Dressed in a glittery silver-and-red gown, she sings half a duet in a soft, melodic voice, appearing every bit the country girl who won the countywide beauty pageant while growing up in Somerset, Kentucky.
Kathy Kingsmore's mother and stepfather still live in Somerset, a farming community of 10,000 people about 100 miles south of Lexington, not far from the Tennessee border. Her stepfather raised cattle and grain while Kathy Kingsmore was growing up. At one point, he also owned a landfill where the county dumped its garbage.
In that part of Kentucky, Kingsmore's stepfather's family--the Weddles--ranks as both prominent and large. There are 27 Weddles in the local telephone directory, and when the newspaper publishes lists of contributors to local political campaigns, invariably there's at least one Weddle on each of them.