From 1984-89 Americans were swindled out of $450 million via religious-affinity fraud.
In the early 1990s a North American Securities Administrators Association report, “Preying on the Faithful: The False Prophets of the Investment World,” described scams and cons by ‘religious’ entrepreneurs. One outfit cited the blessing of the tribe of Asher by Moses in Deuteronomy that ‘the feet of the people will be bathed in oil’ as the basis for drilling for oil that was never found.
From 1998-2001 people lost $2 billion between in religion-related scams.
From 2002-2012 American investors had $23 billion stolen from them due to affinity frauds of all kinds, not just religious affinity frauds. No one has a reliable number for smaller frauds over the same period. In all, affinity-fraud losses in America could be as much as $50 billion.
Religious fraud is particularly common, because people find it hard to imagine that the pastor is a perp. Joseph Borg, Alabamaʼs securities commissioner, reckons half of all affinity frauds in the American South are faith-based. The problem stretches across all types of belief, and ranges far beyond the Bible Belt. In September, a 77-year-old man from Ohio was indicted for allegedly defrauding 2,700 fellow Amish of $17m. The state thought to have the most affinity fraud per head is Utah, where 60% of the population are Mormons… with the three largest cases involving combined losses up to $700m. LuElla Day lost $1.2m in a deal hatched by Daniel Merriman, a fellow Mormon she had known for four years. Another factor is the rise of “prosperity theology”, or the belief that God wants Christians to be rich as well as good. This idea has taken root fastest in black and Hispanic churches. The problem is that it puts pressure on congregations to invest successfully, which makes them more vulnerable, says Ole Anthony of the Trinity Foundation, which investigates church fraud.
Religious scams are among the most common and Christians are easy targets. Investors are often following the advice of trusted leaders. Barry Minkow says that in just one year he has personally uncovered more than $1 billion in church-based scams and other fraud targeting Christians. Some schemes donʼt target Christians but spread quickly once introduced in a church. Others go unreported, or regulators canʼt shut them down because victims refuse to testify. In one case, Joe Borg (director of the Alabama Securities Commission) said church members “were told that if they spoke to us, they would be excommunicated and their souls damned to hell. We had a lot of folks who said, ‘Look, I may have lost everything I own, but Iʼm not going to take a chance.’” Borg says they play on victimsʼ greed (promising huge returns) while easing their conscience by saying that the investment comes from God or that the money is being invested in ministry.
Ole Anthony (the head of the Trinity Foundation who also publishes The Wittenburg Door) revealed (in 2006), “U.S. Attorneys tell me that there is more fraud committed in the name of God in America than any other kind of fraud.”
SOURCES: Ted Olsen, “Bilking the Brethren,” and, Rob Moll, “The Fraud Buster: The Faithful Are Being Defrauded of Billions,” Christianity Today, Vol. 49, No. 1, Jan. 2005; Walter Hoops, “At Random,” The American Rationalist, Jan./Feb. 1991; The Wittenburg Door Insider [an online publication], Oct. 2, 2006; Fleecing the flock: The big business of swindling people who trust you, The Economist, Jan 28th 2012
Enron: A Corporation Run by a Passionate Christian
The CEO and Chairman of Enron corporation, Dr. Kenneth Lay, was the son of a Baptist minister. He accepted Jesus Christ as his savior when he was 12, and remained passionate about his beliefs as he explained in his own words:
Iʼve always just felt a strong presence in my life, a faith, and the will of God directing my life and giving me guidance for what Heʼd like to do with my life. There have been too many events in my life where it would be hard to say, That was just coincidence. Certain roads were crossed and certain directions became apparent, which at the time—maybe for many people—didnʼt look all that apparent. But the results have later turned out to be exactly the right thing at the right time. I can give you any number of examples… Throughout my life, things have fallen into place that turned out to be the right thing to do at the time… Looking back, 30 or 40 years later in some cases, those were the things that just really fit together perfectly… I am convinced that God was—and is—guiding all the way… multiple coincidences, they just seem to occur one after another. Whether it was meeting certain people at certain times, certain jobs appearing suddenly, or certain opportunities appearing… These things just fit in place… I became convinced that my true calling was business… I think, in my case, Iʼve been able to make a bigger and more positive impact through business than I could have in any other profession, including the ministry. Iʼve been able to impact more lives, more communities, and more causes than I could have otherwise… I begin many of our business dinners, and particularly special ones with directors and senior employees and community leaders, with a prayer. I think that sets the tone as to the importance of faith, at least in my life and sets the tone for the entire meeting. I have a retired minister on staff at Enron who does a lot of counseling for our employees. Itʼs at their discretion, at their request, but heʼs available particularly when employees are going through or experiencing the death of loved ones, or tragic accidents, or maybe depression or whatever. Obviously as he counsels, he also ministers. My employees know that I take basic religious principles very seriously… We have nearly 20,000 employees worldwide and we obviously have a lot of different religious faiths practiced by these employees… We really try to respect everybodyʼs beliefs. But itʼs widely known that I have a very strong Christian background and Christian faith… I basically try to create an environment at Enron where everybody has the opportunity to realize his or her God-given potential. That means that our people are always striving for excellence and to set the standard for our businesses by which others will measure their success.
Dr. Lay in an interview, published in the May/June 2002 issue of The [Wittenburg] Door
On July 7, 2004, Kenneth Lay was indicted by a grand jury on 11 counts of securities fraud and related charges, and was found guilty on May 25, 2006 of 10 counts against him. Legal experts said Lay could have faced 20 to 30 years in prison. However, he died about three and a half months before his sentencing due to a heart attack.
Fortune magazine had named Enron “Americaʼs Most Innovative Company” for six consecutive years. However, Enronʼs global reputation was undermined by persistent rumors of bribery and political pressure to secure contracts in Central America, South America, Africa, and the Philippines. Especially controversial was its $3 billion contract with the Maharashtra State Electricity Board in India, where it is alleged that Enron officials used political connections within the Clinton and Bush administrations to exert pressure on the board. After a series of scandals involving irregular accounting procedures perpetrated throughout the 1990ʼs Enron underwent one of the largest bankruptcies in corporate history, itʼs “healthy” financial condition had been sustained mostly by institutionalized, systematic, and creatively planned accounting fraud.
Baptist Groupʼs Leaders Convicted:Investors Lost $585 Million
Two former executives of a failed Southern Baptist foundation, Crotts and Grabinski, were convicted… in a scheme that cheated investors out of about $585m. The investors were recruited in Southern Baptist churches (and by Bible-quoting salesmen who visited their homes) who claimed that the money would help Southern Baptist causes, such as building new churches, and they were promising above-market returns.
Defense attorneys argued that the foundation could have been able to pay off investors if state regulators had not forced it to stop selling securities in 1999. James D. Porter, a foundation investor and Crotts family friend, said he believes that Crotts is innocent despite the verdict. “The truth is not determined by what this court said,” Porter said. “Righteous people have spent time in jail before.” [Itʼs common for Christians to pull out the “weʼre being persecuted” card whenever another Christian is caught doing something wrong (or poorly). In this case they resorted to illegal means to try and cover up just how inept they were at investing their brethrenʼs money.
—Austin Cline, your guide to the Agnosticism/Atheism section of http://www.about.com] Since the foundationʼs 1999 bankruptcy, five other employees or associates have pleaded guilty in connection with the fraud. The foundation was an official agency of the Arizona Southern Baptist Convention, which is affiliated with the national Southern Baptist Convention.
SOURCES: Tom Tingle (AP), “Former Baptist Foundation of Arizona President William P. Crotts is Led from a Phoenix Courtroom;” and, Terry Greene Sterling, “Baptist Groupʼs Leaders Convicted: Investors Lost $585 Million,” Special to The Washington Post, Tuesday, July 25, 2006; Page A03; special correspondent Steve Elliot contributed to the report.
The Black Bernie Madoff
WITH a nudge from their pastor, the 25,000 members of the New Birth Missionary Baptist Church near Atlanta opened their hearts, and their wallets to Ephren W. Taylor who led a series of financial seminars in October 2009 at the mega church and took more than $1 million in investments from members. Mr Taylor billed himself as the youngest black chief executive of a publicly traded company in American history. He had appeared on NPR and CNN. He had given a talk on socially conscious investing at the Democratic National Convention. Snoop Dogg, a rapper, had tapped him to manage a charitable endowment. So when Mr Taylorʼs “Wealth Tour Live” seminars came to town, faithful ears opened wide. Eddie Long, the mega-churchʼs leader (who was accused of having abusive homosexual relations and settled out of court), introduced Mr Taylor at one event with the words: “[God] wants you to be a mover and shaker… to finance you well to do His will.” Mr Taylor offered “low-risk investment with high performances”, chosen with guidance from God. Divine inspiration, alas, has given way to legal tribulation. For many investors, the 20% guaranteed returns proved illusory. Mr Taylor (whereabouts unknown) stands accused of fraud in a number of lawsuits. An essential element of Mr Taylorʼs approach was to make those he targeted want to invest in him personally, says Cathy Lerman, a lawyer representing some of the victims. “He was a master of creating a marketing presence. He would say: ‘If you want to check me out, just Google me.’” He had no problem convincing them that he was an ordained minister, even though he had no formal seminary training, according to court documents. It will take time to gauge the full extent of the losses, not least because it will require untangling a web of companies, some of them shells. Victims, many of whom entrusted their life savings to Mr Taylor, are still coming forward. Some call him “the black Bernie Madoff.”
Mr. Madoff, whose victims lost perhaps $20 billion, perpetrated the largest “affinity fraud” ever. The Madoff fraud fed on multiple affinity circles: wealthy Jews in Florida and Israel, country-club types and European old money.
The next-largest alleged investment fraud of recent years, the $7 billion collapse of Allen Stanfordʼs empire, also concerned specific groups, including the Latin American and Libyan diasporas and Southern Baptists.
Last August a South Korean pastor was indicted for misappropriating 2.4 billion Korean won ($2.3m) that the faithful had handed over to set up a Christian bank.
Fleecing the flock: The big business of swindling people who trust you, The Economist, Jan 28th 2012
One of the Most Devout Christian CEOʼs Presided Over One of the Largest Frauds in U.S. History
Head of WorldCom, Bernard Ebbers was known as one of the most religious CEOs in the high-tech sector. He invoked God regularly in speeches and press interviews, and started each board meeting with a prayer. He was a deacon at his Baptist church, where he also led a weekly bible study class. According to those who took the class, he was remarkably fluent in scripture. If someone missed the class, Ebbers would be on the phone to see if they were okay.
And yet, Ebbers presided over the largest fraud in U.S. history, a fraud that wrought massive financial pain on present and future retirees across America. After the revelations of this crime, a tearful Ebbers told his congregation: “More than anything else, I hope this doesnʼt jeopardize my witness for Jesus Christ.”
It sounds as though Ebbers was more concerned with whether public knowledge of his crimes would harm his ability to evangelize his religion than he was with whether his crimes caused actual financial harm to his employees. What a great guy, huh? He may have been a poster boy for traditional sexual and Christian morality, but that didnʼt stop him from helping defraud those around him.
David Callahan, The Cheating Culture: Why More Americans Are Doing Wrong to Get Ahead
Regular Church Goer and Social Conservative Stole 100ʼs of Millions
Or look at John Rigas, who headed Adelphia Communications, one of the largest cable television companies in the United States. The son of Greek immigrants, Rigas was a regular church goer guided by social conservatism. He raised his four children in a small town in upstate New York with a strict set of traditional values. His sons went to work with their father after graduating from the nationʼs best colleges and they, too, became pillars of the upstate community where Adelphia was headquartered. The sons, like the father, were social conservatives. No porn channels were allowed on Adelphiaʼs cable system.
A very different morality guided the Rigases in business. By the time investigators caught on, the Rigases had appropriated hundred of millions of shareholder funds for their personal use through various shady loans and frauds. Prosecutors accused father and sons of “systematically looting” Adelphia…
David Callahan, The Cheating Culture: Why More Americans Are Doing Wrong to Get Ahead
Crusader Against Homosexual Rights and Investor in Prayer Radio Also Swindled
Philip Anschutz is yet another business leader who publicly embraced religion and “family values” while indulging in greed and financial chicanery at the office. A billionaire who is the largest owner of movie screens in America, Anschutz is a religious man who has crusaded against homosexual rights and the medical use of marijuana. He has bankrolled a variety of Christian conservatives and invested in prayer radio.
Yet as the founder and chairman of Qwest Communications, a telecommunications firm, Anschutz ranks among the most corrupt insiders of the late 1990s. He sold nearly $2 billion of Qwest stock as it plunged in value from $63 a share to $3. As these sales took place, many in a secretive fashion, Qwest was encouraging its employees to hold on to their own stock and to build their retirement plans around 401(k)s heavy with Qwest shares. Anschutz was investigated and eventually agreed to give up $4.4 million in illegal gains from his shady business dealings without admitting any wrongdoing.
David Callahan, The Cheating Culture: Why More Americans Are Doing Wrong to Get Ahead
Randall W. Harding sang in the choir at Crossroads Christian Church in Corona, Calif., and donated part of his conspicuous wealth to its ministries. He named his investment firm JTL, or “Just the Lord.” He and his partners stole more than $50 million from pastors, churchgoers… another cautionary tale in what investigators say is a worsening problem plaguing the nationʼs churches.
For some additional cases of Christian related fraud click here
Nice. I expect that they were mostly men... in suits and ties... nice cars, homes, well to do. And by all accounts, "respectable citizens."
ReplyDeleteLuke 6:26
"Woe unto you, when all men shall speak well of you! for so did their fathers to the false prophets."