Con artists use Scripture and “divinely inspired” investment advice to bilk the faithful.
While much national attention has been focused on the financial failings of television evangelists and other charities, American securities experts say a different type of fraud is increasingly picking the pockets of unsuspecting Christians. More than 15,000 Americans have lost over $450 million in the past five years to religious investment scams, according to a report released last month by the North American Securities Administrators Association (NASAA) and the Council of Better Business Bureaus (CBBB).
The report, “Preying on the Faithful,” charges that religiously oriented scams are on the rise. “The sharp increase in the ranks of the ‘false prophets’ of investment has resulted in a surge in state-level complaints from consumers about fraud and abuse by self-proclaimed ‘born-again’ financial planners, con artists claiming to be endorsed by local and national church officials, and givers of ‘divinely inspired’ investment advice about coins, precious metals, real estate, and oil and gas well programs,” the report says.
NASAA president John Baldwin told a Washington press conference that religiously oriented swindles have become the “fraud du jour” of the investment world. “The faithful of all persuasions, including Baptists, black churches, Greek Orthodox congregations, and Hispanic Catholic parishes” have been taken in, Baldwin said.
The report, which is based on anecdotal information from 15 “representative states,” documents several examples of recent religious investment schemes, including:
• Massachusetts-based Ford Oil and Development, Inc., which sold stock to raise money for an oil-and gas-drilling project in Israel. It based its plans on a prophecy in Deuteronomy that says the feet of the tribe of Asher will be bathed in oil. State officials, including Massachusetts Secretary of State Roy Blunt, ordered the company to stop the stock sales, but not before investors lost several million dollars.
• A former bank trust officer and treasurer of the largest Baptist Church in Alabama, who organized an investment plan that enticed nearly 200 friends and fellow church members to pool $18 million dollars in stock investments that he promised would yield up to 30 percent profit per month. In an apparent effort to reassure religious investors, he printed Bible verses on the bottom of monthly statements. He was sentenced to ten years in prison after the money was found scattered over 40 accounts in seven banks.
• A Tulsa, Oklahoma, man who was convicted earlier this year of securities fraud, embezzlement, and swindling charges, after he used a Christian newspaper to recruit investments in gold bars and precious-metals medallions.
A host of additional investment schemes are under official investigation and being fought out in the courts across the country. For example, in May the Idaho Department of Finance filed a lawsuit against oil and gas promoter Lawrence McGary, Shama Resources Limited Partnership, and Maranatha Management Corporation for alleged violations of securities laws. McGary was attempting to organize a project to drill search for silver, gold, platinum, and other precious metals in Idaho. In literature promoting the plan, McGary said God had revealed to him that the Idaho project was a parallel to Ezekiel 47 and 48 and would be used to “bless this generation.” In February, McGary, Shama, and Maranatha filed reorganization petitions in the U.S. Bankruptcy Court for Idaho. McGary is not commenting while the case is in the courts.
Questionable Connections
Art Borden, president of the Evangelical Council for Financial Accountability (ECFA), said his organization is also concerned about the situation. Borden said ECFA has received some reports of swindlers claiming connections with legitimate Christian nonprofit groups—including ECFA member organizations—to gain the confidence of potential investors. He said the ECFA board of directors is currently discussing the possibility of formally cooperating with NASAA in issuing alerts to the Christian community about religious con artists.
“A person who would invest in these schemes is frequently also the donor to the local church or to other Christian ministries,” Borden said. Christians are no more susceptible to being swindled than any one else, he said. However, recent media attention to evangelicals may have made them bigger targets.
“There are Christians who promote investments who are honest, legitimate people in the finance business like anybody else,” Borden said. “But investigate. Just because someone says, ‘I’m a Christian,’ … it may not mean that he’s any more competent or honest than the next person.”
The NASAA report also includes several tips to help people avoid being taken in by a religious investment scam:
• Be wary of investments that seem closely tied to a particular religious belief.
• Be cautious if the promoter of an investment plan tries to capitalize on religious connections or a leadership position within a religious group.
• Be on your guard against a church newcomer with a “sure-fire” investment scheme.
• Ignore claims that religiously based investments are unregulated. Virtually all investment opportunities, including church bonds, are under the scope of state and federal securities or commodities laws.
• Don’t let a swindler get away with the crime. Report any suspected swindlers to state securities agencies.
By Kim A. Lawton.
Rip-off or Risky Business?
Dan and Lynda Thompson of Alexandria, Virginia, feel their former friend and associate pastor of their church misled them on a business venture. “Not true,” says Orv Owens, the Thompsons’ alleged culprit. He maintains the Thompsons came to him with a bundle of money and hopes of a quick profit. Their story could be a classic case of what happens all too often when business deals grow out of Christian fellowship.
In an interview with CHRISTIANITY TODAY, Lynda Thompson said she and her husband made their first investment with Owens in 1980, soon after they had met him. The project was the Men’s Basketball Association (MBA), an umbrella group for local business and church amateur basketball teams. Thompson said her husband did volunteer work for Owens and eventually went on the staff, but MBA “sputtered off to nothing.”
In the meantime, Owens, a motivational speaker specializing in management and sales seminars, began planning to sell videotapes of his training presentations on business, marriage, and youth issues. According to Owens, who now operates Owens Training of America out of southwest Florida, the tapes contain “Bible-based Christian concepts and principles applied to daily life.” He said many public schools and businesses use the tapes. The Thompsons, who are still very positive about the content of the tapes, decided to invest large sums of money, including the majority of a hefty insurance settlement, into a distributorship to market the tapes in North Carolina.
Thompson said that after several years of raising money, gathering investors, and lending money to Owens, they began to suspect problems with the way the business was being run. Finally, in 1986, they decided to sever their ties with Owens and let the North Carolina franchise lapse.
Thompson claims they lost their entire investment (a distributorship cost $100,000), along with money loaned to Owens. “We don’t have any vague idea that we will get anything back,” she said. Several other Christian families in the Thompsons’ church corroborated the Thompsons’ story and told how they also invested heavily in Owens’s projects and have yet to see money back. The allegations are reportedly being investigated by the Naples, Florida, office of the FBI.
Owens, however, denies that anyone has lost any money. “All those organizations are still viable organizations with the potential to earn money,” he told CT. He said the Thompsons bought the distributorship but were unable to make enough sales to cover their investment. He also blamed rising interest rates in the early 1980s, errors in marketing research, and other “unforeseen things” for the company s poor performance.
He said he stopped selling distributorships when it became clear the project was not doing as well as he had planned. Of the remaining eight distributorships, four are “still viable entities making money,” Owens said. One even paid investors some profits last year, although not enough to cover the initial investment, Owens said. Other investors told CT they are pleased with Owens’s product and believe their investments will eventually be recovered.
Owens insists he has been hit the hardest financially. “We’re not talking about fat cats down here making a lot of money and stowing it away,” he said. Owens told CT a Christian attorney advised him it would be to his advantage to file for bankruptcy and start all over, but he refuses to do so for the sake of his investors. “They’ve only lost money if we give up and claim bankruptcy,” he said.
He remains confident things will stabilize. “We have some great things happening right now that we’re very excited about,” he said. “We think by the end of 1990, these very same people will have every dime they’ve ever invested back in their pockets.”
NORTH AMERICAN SCENE
CHURCH AND STATE
Disabilities Act Debated
The Americans with Disabilities Act of 1989, whose merits have been debated among Christians, has been endorsed by well-known author and artist Joni Eareckson Tada as “good news for 35 million disabled Americans.” In a Christian Fund for the Disabled press release, Tada claims fears that the act “would impact negatively upon churches and Christian schools” are unfounded.
In the release, Tada points out that the Senate version of the bill allows religious organizations to require that their employees submit to their religious tenets. She observes that the bill does not specifically list churches in the category of “public accommodations.” This category includes such institutions as restaurants and hotels, which are not exempt from complying with the act’s antidiscrimination provisions.
Critics of the bill claim, however, that churches are considered places of public accommodation whether or not they are specifically listed as such. They also point out that it may not be the Senate version of the bill that is eventually passed into law.
The act’s definition of a disability, according to critics, is vague, and thus allows for drug and alcohol addicts to be considered persons with disabilities (CT, June 16, 1989, p. 54). This could, critics maintain, at some point require churches either to break the law or violate their principles.
The act’s supporters and detractors, however, seem to agree that churches ought to be doing more to make their programs and facilities more accessible to the disabled. Tada expressed concern that passage of the disabilities act will lead Christians to think it is “not their responsibility to meet the needs of disabled individuals.”
INCLUSIVE LANGUAGE
Methodists Compromise
A new book of worship for the United Methodist Church will retain masculine references to God and Jesus in appropriate cases, but the overall goal will be to emphasize feminine and gender-free imagery. Members of the church’s worship-book committee say the decision reflects the intentions expressed at last year’s general conference.
The worship book will include services of Holy Communion and baptism, occasional services such as weddings and funerals, prayers, litanies, and other aids to worship. It will replace current worship manuals produced by the United Brethern and Methodist churches, which merged in 1968.
Guidelines established by the worship-book committee call for all texts to be tested against the traditional formula of Methodist founder John Wesley: Scripture, tradition, experience, and reason.
PUBLIC POLICY
Victory for Unwed Couple
The California Fair Employment and Housing Commission has ruled against a Chico, California, woman who refused on religious grounds to rent a one-bedroom apartment to an unmarried couple.
Evelyn Smith was fined $954 and ordered to post a sign at her rental properties disclosing the litigation against her. She is being supported in the case by Concerned Women for America (CWA), which intends to appeal the decision to the state’s court system.
CWA founder and president Beverly LaHaye expressed dismay at the decision by the employment and housing commission, stating, “It is unfortunate that the Commission elevates protection of non-marital sexual activity over cherished First Amendment freedoms.”
CHINESE MINISTRY
A Seminary Is Born
Gordon-Conwell Theological Seminary of South Hamilton, Massachusetts, has established a new seminary with the purpose of training pastors, missionaries, and evangelists for work among Chinese people in North America, Asia, and other parts of the world.
The seminary, to be called the Great Commission Theological Seminary, will be located in the greater Los Angeles area. In its initial stages, it will function as an associate school of Gordon-Conwell, but plans call for the new seminary to be fully independent and accredited by the turn of the century.
Said Gordon-Conwell president Robert E. Cooley, “There is a great need in the Chinese church for trained ministers, evangelists, and missionaries with a commitment to the Great Commission.”
PEOPLE AND EVENTS
Briefly Noted
Cited: Ninety-two schools for the 1989 Templeton Foundation Honor Roll for Character Building Colleges. Those selected exemplify, in the opinion of college presidents, “campuses that encourage the development of strong moral character among students.” According to the presidents, three stood out as the best of the best: Wheaton (Ill.) College, Taylor University, and the University of Notre Dame.
Sentenced: To an eight-year prison term, Richard Dortch, for his role in financial irregularities at Jim Bakker’s PTL. Dortch had pled guilty to federal fraud and conspiracy charges and agreed to testify against Bakker. Prior to his sentencing, he turned over $300,000 of his pension from the Assemblies of God, from which he lost his ordination, to Pinellas Park (Fla.) Wesleyan Church, where he has been attending.
Merged: Colorado Baptist University and Colorado Christian College to form a new institution, Colorado Christian University. The new school traces its roots to the 1914 founding of the Denver Bible Institute.
Begun: In the wine-growing community of Windsor, California, a new Presbyterian church, which meets each Sunday in, of all places, a winery. The winery is managed by a member of a Presbyterian church in nearby Santa Rosa. Services conclude by noon, when the winery opens for tasting.
