Commentary; Posted: 8/23/06
Churches can be targets of fraud
Rev. John C. Blackford,
Religion Columnist
It should not happen, but it is happening increasingly, that churches are targets of fraud, and some have been victimized.
ěThe size and the scope of the fraud is getting larger,î said the administrator of the Division of Securities, Wisconsin Department of Financial Institutions. ěThe scammers are getting smarter, and the investors donít ask enough questions because of the feeling that they can be safe in church.î
Randall W. Harding sang in the choir at the Crossroads Christian Church in Corona, CA, and gave generously to its ministries. He called his investment firm JTL, or ěJust the Lord.î Pastors and members entrusted their money to him. He was eventually unmasked as a fraud, but by that time he and his partners had stolen more than $50 million from members of the congregation and their friends.
Crossroads Church is only one example of what is a worsening problem among the nationís churches.
Billions of dollars have been stolen in religion-related fraud in recent years, according to the North American Securities Administrators Association, a group of state officials who work to protect investors.
They claim that about $450 million was fraudulently raised between 1984 and 1989, and that from 1998 to 2001, the amount had grown to $2 billion. Since then religious scams have only increased.
On an even larger scale, Greater Ministries International of Tampa, FL, defrauded thousands of people of half a billion dollars by promising to double their investments on projects they claimed had Godís blessings.
Several of the con men were given prison sentences of more than a decade each in 2001.
Because the fraudulent schemes often appear to be legitimate and worthy, the targets, whether congregations or individuals, need to be wary of financial propositions, especially any which make large claims and promises.
ěTypically, a con artist will target the pastor first by making a generous donation and appealing to the ministerís desire to expand the church or its programs,î according to the director of the Alabama Securities Commission, who was instrumental in uncovering the Greater Ministries scheme.
If the pastor approves, the people in the church will see it as an implied endorsement.
Those who are reluctant may be persuaded by the promise that a part of their earnings can go to local church projects.
ěIf a skeptical church member openly questions a deal, that person is often castigated for speaking against a fellow Christian.î
Early this year the Forest Lake Times had this headline: ěShiloh Church official accused of bank fraud.î
The accompanying article told that ěThe US Securities and Exchange Commission filed an emergency action last month against Shiloh Ministries International operator Neulan D. Midkiff, of Forest Lake, and five business associates from Georgia, Texas and Norfolk Island, a territory of Australia.î
Government investigators claimed these people were involved in a $36 million ěPonzi Scheme,î also known as a pyramid scheme, in which only a few people profit.
ěHow many people were sold into the scheme in Forest Lake is still an unknown number. And so is the amount of the investments,î was the statement of financial consultant from Atlanta, GA, who was called in on the case.
Several months later there was a follow up article announcing that Midkiff was facing possible Texas contempt of court charges in the matter, and that he is ěa central figure in a massive federal investigation into a multi-state and international bank fraud scheme or Ponzi program.î
There are many fine and commendable fund raising programs deserving of support, being promoted by the churches and other charitable organizations.
Yet there are fraudulent schemes being circulated.
It behooves us to analyze thoughtfully and prayerfully the appeals that come to us and our congregations.
Perhaps a good rule of thumb is that ěif a thing is too good to be true, it is too good to be true.î
Being good stewards of what God has given us involves our discernment as well as our generosity.
Acknowledgements: The Minneapolis Star Tribune, Aug. 14, 2006, and the Forest Lake Times, Jan. 18, and April 6, 2006.
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