F E A T U R E
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BY THOMAS WETMORE AND KARNIK DOUKMETZIAN
The first two employees invested his money, and by the time the employer returned from his trip, the sums invested with them had doubled. The last employee, however, simply held on to the cash. We don't know how long the master was away, but we do know that on his return, after being advised of the doubling of the investments, he congratulated and promoted those two hardworking employees. "Well done, you good and faithful servant!" said the employer to each of them. "You have been faithful in managing the funds I gave you, so I will now put you in charge of much more. Come on in and share in my happiness." A growing number of sincere Christians have misread this familiar biblical parable and have incautiously assumed that just about any method will suffice to increase their means so long as the ultimate goal is to "further spread the gospel." Blinded by greed and religiosity, they have let common sense take a backseat. Financial scam artists are reaching into new enclaves of society today to swindle just these kinds of trusting, unsophisticated investors with unrealistic expectations. Christian faith is no guarantee of being able to easily recognize these slick and smarmy promoters of fraud, for they have put on an insidious disguise. In many cases they are part of the groups, the organizations, even the congregations in which we participate. Those promoting these scams often say something like this: "You can trust me, because I'm like you. We share the same religion; we have the same desire to spread the gospel message to all the world. I can help you achieve your goal of financing the spread of the gospel and at the same time protect your financial well-being. My plan can guarantee returns in excess of 500 percent per year. Your investment is secure, guaranteed, and fully protected. You will start receiving returns on your investment in short order, and you can then utilize your generated funds for various ministries you wish to support." Relying on the dual motivators of personal greed and evangelistic interest, these cunning individuals have been able to gain entry into the hearts and bank accounts of thousands of believers. Law-enforcement officials in North America have coined a new term for this type of activity--affinity fraud. What Is Affinity
Fraud? It's only natural to feel you can trust someone with whom you identify or share a common belief. Our tendency to be cautious about strangers and their claims breaks down if we sense or are told that we have something in common with them. Our natural (and sometimes healthy) skepticism dissipates when we are lulled into a false sense of security by reports and testimonials from a few prominent members of the group who claim to have received spectacular returns on their Hi investment." A testimonial from someone you know and trust who has benefited from the investment sets the trap most effectively. It doesn't seem to matter much which product is being promoted when you talk with a living, breathing person who has made a lot of money on it. Therein lies the common denominator of all of these scams--quick and easy money. Promises of double- and triple-digit returns on investment are the norm, and are often combined with assurances of little or no risk. There are even some offers that appear to be promising as much as 3,000 percent annualized return! The most diabolical modern snake oil salespersons prey on those who pray. What activities do the con artists claim will result in this level of profit? Most of the double-talk usually mentions such things as international financial transactions in prime bank guarantees, offshore investing, gold mining, oil drilling, high-tech inventions, etc. The "opportunities" are usually just "smoke and mirrors" serving as a front for a pyramid, a Ponzi scheme,* or a blatant theft of your hard-earned dollars. But the most diabolical modern snake oil salespersons prey on those who pray. Cloaked in piety, quoting Scripture, and claiming to be believers, these con artists appeal simultaneously to members? desire to make good while doing good for the Lord. Easy assurances of a blessing from God are given to those who "step out in faith." Taking advantage of the trust that Christians invest in fellow Christians and in God's promises is the chosen tactic of the unscrupulous. The most notorious recent example is Greater Ministries International, of Tampa, Florida. Seven leaders of that organization are facing criminal charges for conspiracy, money laundering, and various counts of fraud. The authorities believe that this organization was operating a massive Ponzi scheme. Such scams eventually collapse as the available pool of new money dries up because there is no real source of income or profit for the "investment" It's quite simply robbing Peter to pay Paul. Promises of investments doubling in 17 months or less lured an estimated 17,000 predominantly conservative Christians to invest as much as $200 million in Greater Ministries. The faithful were promised by the Bible-quoting promoters that they would be blessed according to their faith; distressingly, a number of the promoters were ministers of the gospel. Investors were also assured that the federal and state securities laws didn't apply to their transactions because their investments were "gifts" to the "church," and that the payments they received from the "church" were "blessings" not subject to federal and state income taxes. It comes as no surprise that the government takes strong exception to these representations. In the legitimate investment arena, success breeds success. In a perverse way, the same holds true for these scams. Many Christians from a range of denominations are now being victimized by these con artists, and there is compelling evidence that an increasing number of Adventists are being duped and taken advantage of by unscrupulous promoters. Such types advance quoting the Bible. Their favorite text is Luke 6:38: "Give, and it will be given to you. A good measure, pressed down, shaken together and running over, will be poured into your lap. For with the measure you use, it will be measured to you" (NIV). They maintain that the text promises a double return for every dollar invested--within a few weeks, a month, or at most a year. What they don't offer, of course, is that the context of Luke 6:38 talks about giving gifts to the poor without expecting anything in return. They write that "God has given us a system by which we can take the blessings of God and cause them to increase." Or that "the Lord has spoken this program into existence by prophecy." These plans routinely promise returns of 35 to 40 percent per month. Con artists also advance by seeking out pastors and prominent members of the church who invest early and receive great returns. These leaders are then used to encourage other members to invest. Some leaders are tempted by finder's fees or a percentage of the profits to encourage others to invest, but grow strangely silent when members ask and expect them to return lost investments personally. Why Should We Be
Concerned? What should you do when offered such "opportunities"? The North American Securities Administrators Association recommends that individuals follow these simple rules when approached to invest in such schemes: 1. Beware of the use of names or testimonials from other church members or officials. Scam artists frequently pay out high returns to early investors using money from later arrivals. Early investors may be wildly enthusiastic about a scheme that may collapse entirely after you have invested. 2. Obtain written information that details the risk of the investment. 3. Ask for professional advice from known professionals (accountants, lawyers, or financial planners) who are neutral and outside the group being solicited. 4. Check references. 5. If you don't understand the investment, stay away from it. Sophisticated, technical jargon about international banking transactions may sound impressive, but don't be fooled. It may be that you don't understand the pitch, not because you are ignorant of the market, but because it really doesn't make any sense. 6. If it sounds too good to be true, it probably is. 7. For more information, visit the website of the North American Securities Administrators Association at www.nasaa.org/investoredu. One state securities commissioner summed it up well: "Treat all investment tips, no matter where they come from, with skepticism. Just because someone in the church, even the minister, says that something about an investment is so doesn't make it so. Be very skeptical of returns that sound too good to be true, because they probably are." When the master in Jesus? parable left his employees in charge of the finances, the first two invested wisely. They were faithful in managing the funds in their possession. The master expected at least a minor return on each of his investments, and all but the lazy servant complied. Those contemplating get-rich-quick schemes would do well to remember that even this useless servant, who was thrown into the darkness, still returned the original investment to the master. That's considerably more than many of the victims of today's sophisticated scams have left. Thomas Wetmore is associate general counsel, General Conference of Seventh-day Adventists. Karnik Doukmetzian is claims counsel, Adventist Risk Management, Inc. Both work in Silver Spring, Maryland. *Named for Charles Ponzi, who ran such a scheme in 1919-1920. A Ponzi scheme is an investment scam in which returns are paid to earlier investors entirely out of money paid by newer investors. |
nce there was a
rich man who was about to leave home on a trip. He called his staff
together and put them in charge of his financial affairs. He assigned
to each employee responsibilities that matched his or her ability. To
one he entrusted $100,000; to another $40,000; and to another $10,000.
