A former Allen University trustee has filed an amended federal lawsuit accusing the school’s board and leaders of the African Methodist Episcopal Church of racketeering and financial mismanagement tied to school assets and federal funds. The allegations appear in a nearly 400-page complaint filed last month in the U.S. District Court for the District of South Carolina, according to The Christian Post.
Who is suing and why
Karol Widemon Montgomery, a Georgia attorney who served on Allen University’s board of trustees alongside U.S. Rep. James Clyburn, D‑S.C., alleges trustees and AME Church officials failed to investigate, or refused to investigate, multiple reports of financial misappropriation and misuse of school property. “What I am looking for is accountability and independent accounting and a record of what occurred,” Montgomery told The Christian Post.
Montgomery’s filing characterizes the defendants as participating in a pattern of racketeering activity and a RICO‑related conspiracy that harmed the university and students. Defendants include the Allen University board, the AME Church, current board Chairman Bishop James Davis, former Chairman Bishop Samuel Green, former President Ernest McNealey, the AME Church Council of Bishops, and other entities.
Power, overlap, and the Vision Center
The complaint notes that Green and Davis served as presiding bishops of the AME Church’s Seventh Episcopal District, chairmen of Allen University’s board, and presidents of the Vision Center, a 218‑acre religious retreat and conference center in Winnsboro, South Carolina. Montgomery alleges this concentration of roles enabled control over institutional finances and over whether the board would investigate conduct.
The Waverly Building allegations
According to the complaint, McNealey transferred the university’s Waverly Building—once home to a historic Black hospital—into a network of entities he controlled and used the property to generate funds through loans, mortgages, investments, and approximately $12 million in New Markets Tax Credits. The filing alleges Allen University did not benefit from the transactions and later spent about $8 million in operating funds to renovate the building.
Claim of a falsified HUD reimbursement attempt
The lawsuit alleges school officials attempted to obtain about $4.2 million from the federal government using false documentation to convert the Waverly Building into a multipurpose venue. After an initial U.S. Department of Housing and Urban Development request was rejected as ineligible based on dates, the school allegedly resubmitted the same work with changed dates to appear eligible. The filing states the second submission occurred with McNealey’s knowledge and approval and that Green approved McNealey’s actions. HUD did not release funding for the project.
Fundraising and Pell Grant claims
Montgomery’s complaint further alleges that the university did not receive a significant portion of roughly $1 million raised annually through Seventh Episcopal District fundraising and “Allen Days.” It also alleges Pell Grant funds belonging to eligible students were not released after university expenses were satisfied.
How the university’s side has been presented
At a board meeting last December to discuss Montgomery’s complaint, a university attorney stated that McNealey does not own the LLCs created to secure tax credits for the Waverly project and did not receive rent or interest from the arrangement, The Post and Courier reported.
Court timeline and response window
Defense attorneys, in a joint motion for more time that was granted, noted that Montgomery added more than 820 new allegations not in her original March filing. Magistrate Judge Kaymani D. West extended the deadline to Oct. 5 for defendants to respond.
Clyburn’s recusal
Montgomery told The Christian Post she raised concerns directly with Rep. Clyburn, who “recused himself” and would not discuss them. The outlet reported Clyburn’s office did not immediately respond to a request for comment.
Parallel drawn to AME retirement plan losses
Montgomery likened the alleged mishandling at Allen to oversight failures cited in a now‑settled lawsuit over the AME Church’s retirement plan, which alleged that the former head of the denomination’s Department of Retirement Services was given sole authority over tens of millions and made risky investments. That complaint described a “complete and total abrogation” of fiduciary duties.
Removal from the board and stated goal
Montgomery told The Christian Post she was removed from the board in 2025 in violation of bylaws and is seeking reinstatement. “If Allen is owed millions of dollars, as I’m alleging … then give them their money back,” she said, adding that she is “advocating on behalf of Allen University, its students, its faculty, its staff and its donors.”
Allen University is a private, historically Black institution in Columbia, South Carolina, founded by AME ministers in 1870.
