As you have written it, it doesn't make sense. And yes, your version with "is" does make sense.
BUT - you said "a lady said". Did you transcribe this yourself?
There are quite a few possibilities for what she said. We would usually use punctuation to clarify the meaning. The tones used in speech can have different meaning, and would probably make the meaning clear to a native speaker.
e.g. a couple of possibilities:
Mr. Church: continuing to make wild accusations against senior members of staff.
Mr. Church: continuing to make wild accusations against senior members of staff?
Your second suggested version does correspond to my first. My second would be: Mr Church: Are you...
Although the sentence structures may be a little odd, they are perfectly valid.