By Jim Hannah
The Cincinnati Enquirer

COLD SPRING - A Campbell County grand jury heard more testimony Thursday in the continuing investigation into the finances of First Baptist Church of Cold Spring.

Church member Darlene Barnes of Fort Thomas was called before the grand jury less than 12 hours after the congregation voted to put up more collateral to avoid a foreclosing on its year-old sanctuary.

Barnes, who said she held various positions in the church, declined to discuss what she told the grand jury. Other current and former members of the church called before the grand jury in recent weeks include Darryl Neltner, former church treasurer; Ted Wallace, former chairman of deacons, and John Roseberry, current chairman of trustees.

Commonwealth's Attorney Jack Porter said he had asked Rev. Larry Davis, pastor of the church, to appear before the grand jury, but Davis wanted to review the dozen boxes of financial records police have collected before he would agree to testify.

Davis couldn't be reached Thursday for comment, and his attorney, Jim Morgan of Newport, didn't return a phone call.

Detectives have issued subpoenas asking for records concerning First Baptist's finances at Fifth Third, Huntington National and Provident banks and Fidelity investments.

Local officials say the Internal Revenue Service has agreed to review the ever-expanding case to see if any tax laws were broken.

Kentucky State Police are investigating whether hundreds of thousands of dollars of church money was misused. Monthly financial statements released by the church show money from accounts controlled by Davis was spent at the MGM Casino in Detroit, an Internet gambling site and services providing tips to sport bettors.

The transactions caught the attention of Fifth Third Bank, which holds the church's $4 million construction loan.

The bank declared the church in default earlier this month and froze $40,000 in a church account.

Applause broke out Wednesday night when the church's congregation voted to provide the bank with additional collateral. Davis said the vote prevented foreclosure.

"We have to move forward as a church body to get this issue behind us," said Roseberry. "This is the best agreement we could come to with Fifth Third."

Members said virtually all of the church's assets were put up as collateral under the agreement.

E-mail jhannah@enquirer.com