MUNSTER | The Family Christian Center, the state's largest mega-church and one of the 20 largest in the U.S., is facing foreclosure, with Pastor Steve Munsey telling congregants Wednesday night the church owes $750,000 in back payments on its sprawling worship center.

During a one-hour emotional appeal at the 7 p.m. service, Munsey told congregants the church pays an onerous 8 percent interest rate on a modified mortgage. He called on his congregation to fast, pray and submit tithes by the end of September to get part of the mortgage paid up and the interest rate reduced.

Munsey acknowledged it was unusual for him to speak about such matters from the pulpit rather than have a worship service, but he said the time had come for him to have such a "meeting" with the congregation. He had a similar meeting during the 5 p.m. service, one church member said.

Munsey also revealed Wednesday night the church has been the target of a three-year federal investigation that has drained its coffers.

No charges were filed in the investigation that wrapped up a few weeks ago, Munsey said. The televangelist, a regular on the internationally broadcast "This is Your Day" show, said he kept the matter private because he "really didn't know what to do but trust God."

His remarks were delivered following elder-anointing ceremonies at 5 and 7 p.m., and were streamed live online. They concluded with a choir singing the hymn "Through the Fire." The lyrics were superimposed on three jumbo screens.

The Family Christian Center, 340 W. 45th Ave., has 15,000 weekly worshippers and a congregation of more than 30,000. Outreach magazine lists it as one of the 20 largest mega-churches in the nation. Worship services and extravagant stage productions take place in its 3,000-seat auditorium, which has a state-of-the-art sound system.

Munsey told congregants he and his wife had slashed their salaries by 80 percent as a cost-cutting measure. Despite the advice of creditors, he said the couple has refused to sell their horses, crowd-pleasing favorites at the church's events and programs. Other live animals also appear on stage in various productions, some which include many actors and musical productions.

"You don't rent a horse on the night you do 'Jesus of Nazareth,'" Munsey said, referring to the church's annual sellout performances of the Easter story. He explained their horses and other animals are trained, used to being ridden on stage and being part of their theatrical shows.

Family Christian Center General Counsel Roy Dominguez on Friday said the church continues to negotiate with Evangelical Christian Credit Union, of Brea, Calif., to stave off the foreclosure case the credit union filed in May 2011. A hearing in the case was called off earlier this year to allow more time for negotiation.

The case has been sealed by Lake Superior Court Judge Diane Kavadias-Schneider, so the total amount owed by the Family Christian Center could not be determined. Dominguez, who also is acting as church spokesman in this matter, would not divulge the total amount owed when asked Friday.

Dominguez, a former Lake County sheriff who said he has been a church member for 10 years, said Friday the federal investigation was conducted by the Internal Revenue Service after a complaint was filed against the Family Christian Center. He would not give any details on the complaint or its nature. The IRS was assisted by other federal agencies.

Dominquez also spoke briefly to the Family Christian Center congregation Wednesday at Munsey's request. He described Munsey as "a humble man of God" and described the Munsey family's ordeal in these words: "It was more than trying. It was very difficult. ... They never gave up. The reason they didn't is they love you all."

Those remarks drew a standing ovation, one of several throughout the 7 p.m. service.

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Munsey on Wednesday said church officials were interviewed by federal officials during the course of their investigation. He said he had no idea what they were asked about or what federal agents were seeking.

Munsey suggested he was a target due to the rapid growth of his congregation. He referred several times to the devil in his talk. Munsey said a legal "dream team" based in Chicago and headed by Dominguez had come to the church's defense last year.

"The devil wanted to take us out," he said at one point.

To compound matters, an internal audit revealed the church had failed to pay some state payroll taxes, he said.

Church officials reported the oversight to the state, Munsey said.

Dominguez on Friday said Family Christian Center had cooperated fully with the federal tax investigation, confirming it had turned over about 90,000 documents. He said the investigation was "successfully concluded as far as we know," with no charges filed.

The church hired a law firm specializing in tax work as well as certified public accountants to work on its behalf, Dominguez said. He verified those were costly undertakings that had stressed the church's finances.

Records on file at the Lake County recorder's office show a string of refinancings and mortgage modifications for the church since it opened more than a decade ago. It moved to its Munster location from Griffith.

A mortgage modification for the church filed in 2009 increased the outstanding principal at that time to $12,308,220. A subsequent modification filed in 2010 does not list the amount owed.

Munsey on Wednesday said the church had paid $8 million in interest but had less than $200,000 equity in the building, a comment that elicited gasps from several congregants.

Records on file at the Lake County recorder's office show Munsey and his wife, Melodye, took out a $2,305,000 mortgage on their home in the gated Briar Ridge subdivision in Schererville in July 2010. They have lived there for a number of years.

Dominguez would not give specifics on why the church foreclosure case was sealed. A status conference is set for Aug. 30.

The court docket for the church foreclosure case was available at the Lake County clerk's online database Friday morning and early Friday afternoon. But after a request by The Times to view a copy of the case at the clerk's office, those dockets no longer were available online.

"There were several issues and we are litigating those issues, and negotiations are coming along well," Dominguez said Friday.

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Times Staff Writer Dan Carden contributed to this report.

Editor's Note: Comments on this article were disabled due to multiple violations of The Times' terms of service, as well as the posting of several off-topic comments.


Lake County Reporter

Bill has reported in Lake County since 1972 after graduating from Indiana University. He has worked for The Times since 1997, covering the courts and local government during much of his tenure. Born and raised in New Albany, Ind., he is a native Hoosier.