Millions of Americans invest their life savings, either directly through personal 401(k) plans and the like, or indirectly through their pension funds and other reserves. They all should worry about many investment frauds fleecing defenseless investors.
Each week, the "American Greed" TV series, now in its seventh year, outlines every imaginable type of disgusting white-collar theft. For example, successful-seeming financiers promise fat returns to investors -- until their phony Ponzi schemes collapse upon desperate losers, and the operators go to prison.
Surprisingly, numerous religious congregations have been victimized through church-related scams. Here are some reported by the documentary show:
• Greater Ministries International -- Florida contractor-turned-minister Gerald Payne created a "for-Christians-only" investment empire that promised to double the money of all believers who followed the Bible's command, "Give, and it shall be given unto you." The ministry said it was developing medications to "actually pull the cancer right out of your stomach" and also help church members "survive end-time plagues." An estimated 18,000 parishioners in several states sank about $500 million into GMI. Large dividends were paid to early investors, creating feverish excitement. After securities regulators issued cease-and-desist orders, the operation changed its name to "Faith Promises." Eventually, the pyramid collapsed and Payne drew a 27-year prison term. A half-dozen of his "elders" also got long sentences.
• Baptist Foundation of Arizona -- After Bill Crotts took over this Southern Baptist charity from his father, he specialized in "providing asset management services to Christians." In a single year, 1985, his team of hustlers sold $211 million worth of shaky investments to church members. The BFA became a Ponzi scheme, using incoming new money to pay returns to previous investors, and concealed losses through a maze of dummy corporations. After bankruptcy inevitably occurred, Crotts drew eight years in prison and various aides got lesser terms. The Arthur Andersen accounting firm was forced to pay $217 million for failing to warn parishioners of the fraud.
• Miracle Cars Club -- A young Hispanic man, Robert Gomez, stood in a California Missionary Baptist Church and announced that his "adoptive father," a rich Texas food tycoon, had died and left a large fleet of luxury cars to be donated to deserving Christians. Recipients were required to pay more than $1,000 each in title transfer fees, then wait until the cars were released from probate. Hundreds of believers rushed to give checks to Gomez and his partner. Word spread like wildfire through fundamentalist churches in several states. Eventually, $21 million was given by gullible folks -- until federal agents discovered that the "adoptive father" and luxury cars didn't exist. Gomez got 21 years in prison and his partner got 24 (longer because he lied on the witness stand). Other helpers drew lesser sentences.
• The Rev. Abraham Kennard -- In an episode titled "Preying on Faith," the "American Greed" series profiled this charismatic preacher who induced 1,600 smaller black churches to become "members" of his investment plan to create Christian resorts. He lived like a king -- and his trusting followers eventually lost nearly $9 million. In 2005, Kennard got a 17-year federal prison term.
• Scientology scam -- Minister Reed Slatkin launched an investment operation that took nearly $600 million from fellow Scientologists and rich Hollywood celebrities. He donated lavishly to the Church of Scientology. It was a Ponzi scheme, using money from new clients to reward previous investors. After the pyramid collapsed, Slatkin drew a 14-year federal prison term, and many lawsuits hit his former associates.Many similar cruel swindles are outlined weekly on the "American Greed" show. As we said, investors at all levels should be wary, keeping a skeptical eye on promises of lucrative returns.