The investigation targets four individuals and three national leasing companies. They are believed to be part of a nationwide scam involving churches in at least 10 states.
The computer kiosk at Bryant Temple African Methodist Episcopal Church was moved back to the church lobby. It was hoped it would generate money and convenience. Instead it became part of a costly and possibly criminal scam.
"People have to deal honorably and this operation looks loose at the very least and intentionally deceptive at the worst," said California Attorney General Jerry Brown.
Bryant Temple is one many African-American churches trying to help their congregations without spending money, adding to their collections without passing the plate.
Hundreds of similar churches were targeted nationally by United Leasing Associates and Television Broadcasting Online. Some churches had several computer kiosks.
The churches signed leases and would be reimbursed. The kiosks would show advertising and print coupons for local merchants. The sales offices were in Beverly Hills and Washington, D.C.
"Mine never worked. I didn't even have the loop, didn't have any advertisements, I didn't have anything," said Reverend Gayle Davis-Culp, Holy Trinity AME.
Davis-Culp, like other ministers, got stuck with the lease costs of as high as $45,000 when the companies skipped town.
The kiosks are just wooden cabinets with a cheap desktop computer inside and programs that often didn't work.
"People who are predators know exactly what to do with people who actually want to do right," said Davis-Culp.
A.G. Brown is also looking into whether the national leasing companies should be charged. They kept demanding money from the churches even after the churches told them they had been defrauded.
The companies are Balboa Capital Corp., United Leasing Associates of America and Banc of America Leasing, affiliated with Bank of America.
"I would hate to say that I allowed myself to be a victim, but we are a victim, and that's difficult to say. Because you want to protect your church, your members, you want to be as wise as possible. We didn't see this coming," said Reverend Clyde Oden, Bryant Temple AME.
In small- and medium-size churches, the loss of thousands of dollars can really hurt.
So far the California investigation involves possible civil charges. In at least one other state, Michigan, criminal fraud charges have been filed.
There's been no comment from the leasing companies.