Pastor Bao Guohua, his wife, and 5 other church employees have been falsely accused of embezzlement and disrupting social order. 1,200 crosses have already been removed.
Seven Christians have been detained, on charges lawyers say are trumped up following their refusal to remove a cross from their church building.
Pastor Bao Guohua and Xing Wenxiang, his wife, of the Holy Love Christian Church in the city of Jinhua were detained by Chinese authorities in Zhejiang, along with five other church employees.
Chinese state media said that they had "conducted illegal business" and they are also accused of embezzlement and disrupting social order.
But the church's lawyer Chen Jiangang told the BBC he believed they were being punished for protesting against the removal of their church cross.
“Based on our current understanding of the situation, these charges are false. If they had actively cooperated with the demolition of the church's cross, there would not be any case today”, Chen told Reuters.
He said that Pastor Bao and his wife had not been able to meet with their lawyers since their detention, which contravenes Chinese law.
Chinese state media on Wednesday said that Mr Bao and his wife, Xing Wenxiang, who are pastors at the Holy Love Christian Church, had embezzled hundreds of thousands of yuan in church funds and "conducted illegal business".
They are also accused of "deliberately hiding accounts, and on several occasions distorting the truth to incite social unrest among believers," according to a widely reproduced report by Zhejiang Daily newspaper.
The police claim that they found more than 20 pieces of jewellery and a large sum of money at the Pastor's house, and reportedly released a statement titled 'Honest pastors' greedy lives' saying, "What kind of life is this honest and upright Pastor Bao Guaohua leading?.”
"What is unusual is that this was an official church, recognised by the Communist Party. Everything had been properly approved by the authorities," Chen commented, adding that the church gained approval in 2008.
1,200 CROSSES REMOVED
A crackdown on churches in China has been widely reported over the past year. The majority of those that have had their crosses forcibly removed or that have been torn down completely, have been in Zhejiang, on the east cost of the country.
A significant number were state-sanctioned buildings, including Holy Love. The crackdown has been protested by Christians in the region, who see it as an attempt by the Communist government (CPC) to increase its control.
Church leaders demonstrated in Wenzhou - known as the 'Jerusalem of the East' because of its large Christian population - two weeks ago, claiming that the CPC wanted to turn Christianity "into a tool that serves the party".
They compared the demolition campaign to the Cultural Revolution of 1967-1976, when under then-leader Chairman Mao religious persecution significantly intensified.
A number of churches have also been demolished after the government said they broke building regulations
China is officially atheist but constitutionally guarantees religious freedom. But churches, which have flourished in particular in the country's southeast, have to be approved by the state.
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