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Protect Yourself from Wolves in Sheep’s Clothing: Scammers

by Chuck Bentley September 29, 2020

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

  1. Lifestyle. You will seldom meet a scammer that looks down-and-out or in humble circumstances. Typically, they wear nice clothes, flashy jewelry, show up in expensive cars, and live in luxury – homes, boats, airplanes, helicopters, etc. They want to give an appearance of success and pretend that they don’t need you, that you need them.
  1. Likable People. To con someone, you have to first win their trust. Scammers have made it an art to quickly make a friendship and do whatever is necessary to build trust. They may even pretend to be humble and willing to be generous with your needs. They want the possibility that they are a bad person to be the farthest thing from your mind. Don’t be surprised if there are some in your circle of friends who may be capable of cheating you out of your money if they become desperate enough.
  1. Making a Connection. The fraudster wants you to believe you have something in common that makes them a familiar or normal person. Do you have faith? They have faith. Do you like dogs? They like dogs. Did you lose a son in the war? They lost a son in the war, too. Typically, they will weave a series of connections built upon lies to create a false sense of security.
  1. Attention-Grabbing Returns on Your Money. Since most people are not interested in making a change unless something seems worth the effort and the risk, con artists will assure you that they are doing better than others in their business, their line of work, their field, or in the whole world. If the average Joe is getting 6% on their retirement funds, Mr. Big Shot is getting 20%, year over year, with very little risk of loss. 
  1. Emotional Selling. The age-old emotions that move people to part with their money are fear and greed. Almost universally, a con man will use one or both of these appeals to attempt to get you to take action. Using a fake deadline, they will convince you to be afraid of missing out on the opportunity of a lifetime if you do not sign on the dotted line now.
  1. Selling Smoke and Mirrors. The common denominator is that the con man has nothing of value to offer you but must deceive you into believing that he or she does. This means that any effort to get facts, documents, references, historic records, and information to support the investment claims will be met with complex stonewalling, falsified documents, or an accomplice willing to lie on their behalf.

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

  1. Be skeptical about anything that sounds better than average. If they are doing so well with their investments, they should not need your money.
  2. Ask for two and three deep references. When they give you their list of references, ask those people to give you a reference outside of the typical circle of people involved with the company.
  3. Seek to disprove the claims, not prove them; especially if you do not know the person or organization.
  4. Check all sources online for complaints, lawsuits, or a trail of bad reviews of the person or business. It is difficult in today’s online world to hide a bad reputation.
  5. Never give anyone control over your funds or invest more than you can afford to lose.

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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