INDIANAPOLIS (AP) – A minister-turned-financier who helped finance construction of hundreds of churches across the country allegedly bilked investors by diverting money to an account where he made loans to himself and others.

A federal judge this past week froze the assets of Vaughn Reeves of Sullivan, Ind., his brokerage, Alanar Inc., and three sons who followed him into the family business. The Securities & Exchange Commission alleged in a complaint they had committed “affinity fraud” with solicitations aimed at their investors’ shared beliefs.

“They were dependent on the trust and faith of a large network of Christian investors,” said John Sikora, assistant regional director of the SEC’s Chicago office.

He contends the Reeveses and Alanar, through a network of 26 brokers in the Southeast, Indiana, the Chicago area and elsewhere, preyed on the sympathies of investors motivated by both financial and religious interests.

Peter French, the Indianapolis attorney representing the Reeveses, said they do not deny the allegations. He said Alanar handled bond issues for nearly 700 churches across the country, and in some cases, the churches defaulted. French said the Reeveses are cooperating with investigators. He said the SEC complaint and the order freezing the assets of Alanar and the Reeveses followed 3 months of negotiations with the SEC.

The family raised more than $120 million from buyers of bonds used to finance church construction projects and more than $50 million from investors in church bond funds that they had created, the SEC said.

Over 20 months ending in May, the SEC said the Reeveses and their various companies diverted $8 million held in trust for bondholders into an online brokerage account they used to trade stock, loan money to at least one church and to make unsecured loans to themselves and their companies. They also allegedly transferred nearly $5 million in investor proceeds to their companies.

Reeves, an ordained minister, once led a congregation in Sullivan, about 80 miles southwest of Indianapolis.

Alanar, which had been licensed in 37 states, went out of business July 5.

The fall of Alanar could cut off a key source of capital for small and medium-sized churches.

“If the government takes them out, the government is taking away a resource, at least for smaller groups,” said the Rev. Robert J. Williams, pastor of St. Paul Baptist in Capitol Heights, Md., outside Washington.