Our Founding Scripture
- Chronicles 9:21
21 And later Zechariah son of Meshelemiah
had been responsible for guarding the entrance of the
tabernacle.
22 In all, there were 212 gatekeepers in those days, and
they were listed by genealogies in their villages.
David and Samuel the seer had appointed their ancestors
because they were reliable men.
23 These gatekeepers and their descendants, by their
divisions, were responsible for guarding the entrance to the
house of the LORD, the house that was formerly a tent.
24 The gatekeepers were stationed on all four sides—east,
west, north, and south.
|
|
The Silent Church Crime
- Affinity Fraud
We want to draw attention to a crime that is seldom
talked about in the church, yet perpetrated frequently in congregations
across the country.
The below article is information taken directly from the
Securities and Exchange Commission:
What is an Affinity Fraud?
Affinity fraud refers to investment scams that prey upon
members of identifiable groups, such as religious or ethnic communities,
the elderly, or professional groups. The fraudsters who promote affinity
scams frequently are - or pretend to be - members of the group. They
often enlist respected community or religious leaders from within the
group to spread the word about the scheme, by convincing those people
that a fraudulent investment is legitimate and worthwhile. Many times,
those leaders become unwitting victims of the fraudster's ruse.
These scams exploit the trust and friendship that exist
in groups of people who have something in common. Because of the
tight-knit structure of many groups, it can be difficult for regulators
or law enforcement officials to detect an affinity scam. Victims often
fail to notify authorities or pursue their legal remedies, and instead
try to work things out within the group. This is particularly true where
the fraudsters have used respected community or religious leaders to
convince others to join the investment.
Many affinity scams involve "Ponzi"
or
pyramid schemes, where new investor
money is used to make payments to earlier investors to give the false
illusion that the investment is successful. This ploy is used to trick
new investors to invest in the scheme and to lull existing investors
into believing their investments are safe and secure. In reality, the
fraudster almost always steals investor money for personal use. Both
types of schemes depend on an unending supply of new investors - when
the inevitable occurs, and the supply of investors dries up, the whole
scheme collapses and investors discover that most or all of their money
is gone.
Recent Affinity Fraud Schemes
The SEC complaint alleges that the defendants operated a
Ponzi scheme and used investor funds to pay lavish personal expenses.
The defendants raised over $16 million from more than 190 investors
nationwide. Many of the victims were elderly members of Jehovah’s
Witnesses congregations and were promised returns of up to 75 percent.
Defendants perpetrated an affinity fraud, raising at
least $16.5 million from mostly African-Americans and Christians by
falsely representing they would receive returns through investments in,
among other things, real estate, small businesses, and "markets of the
world."
This nationwide scheme primarily targeted
African-American churches and raised at least $3 million from over 1000
investing churches located throughout the United States. Believing they
would receive large sums of money from the investments, many of the
church victims committed to building projects, acquired new debt, spent
building funds, and contracted with builders.
The victims of this fraud were mainly African-American
Baptists, many of whom were elderly and disabled, as well as a number of
Baptist churches and religious organizations located in a number of
states. The promoter (Randolph, who was a minister himself and who is
currently in jail) promised returns ranging between 7 and 30%, but in
reality was operating a Ponzi scheme. In addition to a jail sentence,
Randolph was ordered to pay $1 million in the SEC's civil action.
The fraudsters allegedly sold members non-existent "prime
bank" trading programs by using a sales pitch heavily laden with
Biblical references and by enlisting members of the church communities
to unwittingly spread the word about the bogus investment.
How To Avoid Affinity Fraud
Investing always involves some degree of risk. You can
minimize your risk of investing unwisely by asking questions and getting
the facts about any investment before you buy. To avoid affinity and
other scams, you should:
Check out everything - no matter how trustworthy the
person seems who brings the investment opportunity to your attention.
Never make an investment based solely on the recommendation of a member
of an organization or religious or ethnic group to which you belong.
Investigate the investment thoroughly and check the truth of every
statement you are told about the investment. Be aware that the person
telling you about the investment may have been fooled into believing
that the investment is legitimate when it is not.
Do not fall for investments that promise spectacular
profits or "guaranteed" returns. If an investment seems too good to be
true, then it probably is. Similarly, be extremely leery of any
investment that is said to have no risks; very few investments are
risk-free. The greater the potential return from an investment, the
greater your risk of losing money. Promises of fast and high profits,
with little or no risk, are classic warning signs of fraud.
Be skeptical of any investment opportunity that is not in
writing. Fraudsters often avoid putting things in writing, but
legitimate investments are usually in writing. Avoid an investment if
you are told they do "not have the time to reduce to writing" the
particulars about the investment. You should also be suspicious if you
are told to keep the investment opportunity confidential.
Don't
be pressured or rushed into buying an investment before you have a
chance to think about - or investigate - the "opportunity." Just because
someone you know made money, or claims to have made money, doesn't mean
you will too. Be especially skeptical of investments that are pitched as
"once-in-a-lifetime" opportunities, particularly when the promoter bases
the recommendation on "inside" or confidential information.
Fraudsters are increasingly using the Internet to target
particular groups through e-mail spams. If you receive an unsolicited
e-mail from someone you don't know, containing a "can't miss"
investment, your best move is to pass up the "opportunity" and forward
the spam to us at
enforcement@sec.gov.
|
