By Associated Press - Wednesday, December 23, 2015

BEAUMONT, Texas (AP) - An East Texas minister and his family have been accused of using hurricane relief funds to pay off personal expenses and fund operations of a 40-member Jasper church.

Sixty-two-year-old Walter Diggles and his wife, 61-year-old Rosie, face multiple counts of wire fraud and money laundering. Their daughter, 39-year-old Anita Diggles, was charged with conspiracy. All three pleaded not guilty Monday in Beaumont.

An unsealed indictment says Walter Diggles was a “registered agent” of the Deep East Texas Foundation, a nonprofit that continued to operate after Texas forfeited its charter in 2007.

Authorities say he defrauded federal authorities by inflating the amount his foundation needed for social service programs. He received about $4.4 million from 2007 to 2012 through federal Social Services Block Grant funds. Prosecutors say $1.3 million was spent on personal expenses, such as transportation, funeral expenses and church rent.

Prosecutors say members of the Lighthouse Church operated an after-school program, and that Rosie and Anita Diggles prepared documents and reimbursement packets to request funds in support of the learning center.

Two women wrote and filed documents requesting that the Deep East Texas Council of Governments pay the foundation based on an hour of each tutor or teacher’s time, prosecutors said, but these requests “were inflated beyond the actual amounts spent in the program.”

The indictment says certified teachers were paid $15 to $17 per hour, but reimbursement packets requested payment at a rate of $110 to $144.

Attorneys for the Diggles family have called the charges “sensational, but unsubstantiated.”

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