Did you see the recent headline of three men posing as pastors to scam about 1,200 unsuspecting, gullible Christians out of more than $20,000,000 in three states with an investment scheme called “1st Million”?
How about the California pastor who swindled his very own congregants out of a million dollars in a Ponzi scheme?
Or the Christian politician who conned folks out of millions in an “end-times” coin scheme?
The problem is so bad that an official of the Securities and Exchange Commission contacted me several years ago asking for our help to make others aware of the widespread crime known as affinity fraud.
Like defrauders who target groups such as seniors and military veterans, there are those who target people of faith.
How to Spot the Con Artist
Spot the Fraudster
Bill and Sally are comfortably retired. They like to host the seniors in their church for social activities about twice a year. It is always a very nice event complete with food and fun ice breakers. During one summer get-together, more than 20 couples attended; some for the first time and others just checking out the church. The ice breaker that year was to share the destination of their best vacation. Jim and Brenda, although shy about their wealth, shared they had just returned from a Caribbean cruise complete with sunburns. Dale and Megan perked up and asked, “Which islands? We just got back from our cruise: Miami to Costa Rica!” Jim said, “Wow, we must have just missed each other…. like two ships passing in the night!”
As the party was winding down, Jim and Dale were able to confer in the corner about their mutual cruise experiences. This led to an exchange of business cards since Dale was new to the church. Dale’s card indicated he was into commodity investing. The crazy thing was, Jim had just been thinking that he and Brenda needed to diversify as they faced a longer-than-expected retirement. Jim asked if he and Dale could have lunch. Unfortunately, Dale said he was too busy with client meetings and a trip to New York for an investor update from the world’s largest investor in gold mines, but he could meet in a few weeks.
“Wow, Dale,” Jim says, “you must be doing pretty well with the price of gold reaching historic highs.”
“Oh yeah,” says Dale, “Megan and I are going on another cruise in just a few weeks. Maybe you and Brenda can join us.”
Bill sees the men talking and joins the conversation. “Dale, thanks for joining us. We hope you and Megan will consider joining the church.”
Dale replies, “We sure like the church, but we travel so much for business it probably won’t be possible to really become members. Maybe when things slow down a bit.”
Bill asks, “What is it that you do, Dale, that keeps you so busy?”
Dale answers, “I manage Christians’ investments so they can give more…and take more cruises!”
“I’d like to know more about that, Dale. How about you, Jim, and I grab lunch soon?”
This story is based upon a real scenario of a real fraudster that is currently serving time in federal prison. “Dale” in this story lived the high life by subtly luring wealthy people into his Ponzi scheme. That means he took one investor’s money in order to give a portion back to previous investors to make it appear that they were getting real returns. Unfortunately, Jim, Bill, and their wives did not spot it before losing a large portion of their life savings.
Separate the Wolves from the Sheep
I hope this helps you identify, avoid, and/or report affinity fraud in your church or circle of friends. I have counseled far too many who have seen their lives devastated by these types of crimes.
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