It would display greed, which Christians are warned against, to plan on making money hastily by exploitng fellow Christians.
Surely they jest.
It would display greed, which Christians are warned against, to plan on making money hastily by exploitng fellow Christians.
Surely they jest.
Here is one from recent news:
SEC Halts $16M Scam Aimed at Elderly Jehovah’s Witnesses
It has stopped a classic Ponzi scheme and begun its case against the proprietors of the California-based scheme.
By Aaron Seward
The SEC has announced charges against a California-based corporation and its principals for a scam that defrauded the elderly. The Commission charges that Renaissance Asset Fund, Inc., Ronald J. Nadel, and Joseph M. Malone raised more than $16 million from more than 190 investors nationwide.
In what the regulator called a classic Ponzi scheme, Nadel and Malone solicited aged investors through Jehovah’s Witnesses congregations and used the proceeds to fund their lavish lifestyles.
The SEC’s complaint, filed in a California federal court, charges Renaissance, Nadel and Malone with violating federal securities laws, violating broker-dealer registration provisions and seeks disgorgement of ill-gotten gains with prejudgment interest, and civil penalties, among other punishments.
“Fraud against seniors and affinity groups is particularly egregious because it is perpetrated through abuse of trust. The filing of these actions reflects the Commission’s determination to protect seniors and other investors from securities fraud,” said SEC Enforcement Division Director Linda Chatman Thomsen.
According to the complaint, Nadel and Malone sold promissory notes to investors between March 1999 and April 2004. The notes related to a variety of purported projects, including a general fund, an outlet mall, an international currency exchange and a Swiss bank. Some of these projects did not exist, and others were unsuccessful.
Regardless of that, Nadel and Malone told investors that their investments would earn returns ranging from 10% to 25% in as little as four months. They also sent false quarterly account statements to investors, outlining the fictional profits their investments had earned.
Renaissance invested approximately $1 million of the funds it raised in business projects, but Nadel spent most of the investors’ money himself. As investors started wanting their money back, Nadel engaged in a series of stalling tactics, including soliciting rollovers of profits and principal into other Renaissance programs and making partial repayments from funds contributed by other investors.
Approximately $1.5 million to $2 million was paid out to investors using funds deposited by other investors. In typical Ponzi scheme fashion, payments to existing investors were funded almost completely by money received from new investors to the scheme.
Nadel also diverted approximately $2.3 million in investor funds to himself directly and through nominee accounts, and paid Malone at least $230,000. Nadel used the money to fund unrelated businesses, as well as for personal expenses, such as leases on cars, country club memberships and other retail purchases and services.
As with all Ponzi schemes, once the flow of new investors stopped, the house of cards built by Nadel and Renaissance collapsed and most investors were left empty-handed.
At the same time that these actions were filed, the SEC settled cease-and-desist proceedings against the scheme’s coconspirators, Senior Resources Asset Fund, LLC and Kenneth E. Baum. Baum acted through Senior Resources, a California company that provides financial advice to seniors, to sell Renaissance’s bogus promissory notes to elderly investors. Both Baum and Senior Resources consented to cease-and-desist from selling unregistered securities and from acting as an unregistered broker-dealer.
The SEC announced the charges on July 17th, the same day the regulator convened its first ever Seniors Summit, a conference examining how to better protect older Americans from investment fraud and abusive sales practices.
This took place in 2003
BOARD NIXES PAROLE FOR FORMER CHURCH ELDER WHO BILKED ELDERLY WOMAN
By Vera Haffey - The Montana Standard - 03/31/06
DEER LODGE (LEE) — It was the most stupid thing he’s ever done in his life, a 66-year-old former Jehovah’s Witnesses’ church elder told state Board of Pardons Thursday.
“I invested in the wrong things,” Darryl Willis said of around $7 million missing from the trust estate of an elderly Deer Lodge woman. “I invested with the wrong people.”
But the admission fell short of taking responsibility for stealing the late Una Anderson’s family fortune, according to Powell County attorney Chris Miller.
Miller said neither Willis nor his accomplice, former elder Dale A. Erickson, have fully acknowledged their actions that led to aggregate sentences of 25 years with 10 suspended each for theft, conspiracy and securities fraud, all felonies, in May 2003.
“They continue to deny that they did anything wrong other than to make bad investments,” Miller said.
Miller and Powell County Sheriff Scott F. Howard testified at the hearing and asked that Willis’ parole be denied. They based that request in part on feedback from family and community members who say the time served is not commensurate with the enormity of the crime.
The board denied the bid for freedom, and told Willis they wouldn’t review another such request for three years.
Court documents say Willis and Erickson befriended and then betrayed Anderson, secretly selling her 6,400-acre family ranch near Jens and draining her life savings amassed by nearly a century of hard work and frugal living.
Anderson, who came to Montana in a covered wagon, was a widow who lost her only son in a ranch accident years ago. She also worked at the Jens post office.
She was introduced to the elders by a mutual friend in the Deer Lodge church group, records show.
At the 2003 sentencing hearing, Adult Protective Services worker Janel Pliley told the court that Anderson was “under watch 24 hours a day,” by church members, who closely monitored her finances and activities.
Their presence caused a division between Anderson and her family members, who contacted local police in September 2001, and an investigation began.
Erickson, who is detained at the Cascade County Detention Facility in Great Falls, was also denied parole at a hearing earlier this month. The men have served just under three years apiece, but enough of their sentences to make them eligible for parole hearings.
Anderson, who died last year at 103, had her own ideas on justice for the church leaders that won her trust, then stole her legacy.
“Lock ’em up and throw away the key,” Anderson said in an interview three years ago.
She suggested confining the two in the old territorial prison in Deer lodge, where folks could pay a nickel a head to see what the white collar criminals looked like.
That way, Anderson reasoned, she might recover some of the hard-earned money they stole from her.
But the money is still largely unaccounted for, records show, and a court request for a full and accurate financial disclosure of Anderson’s assets was never provided.
Parole board chairman Vance Curtiss asked about the possibility that money could be stashed for use after the defendants get out of jail.
“How convenient would it be to spirit some of the money away and wait till (the defendants) get out and enjoy life for a while?” he asked.
As it was, Erickson and Willis were granted 90 days of freedom after their sentencing to try to recover Anderson’s lost assets.
To date, around $400 has been paid toward the $6.5 million restitution debt by Willis. Erickson has paid nothing, according to Department of Corrections spokesman Bob Anez.
Howard said a difficult moment during the investigation came when Anderson asked him if he could get the family ranch back, and he had to tell her, no, he said.
Even so, Willis called Anderson “a wonderful lady.”
“I hurt her very much and I’m very sorry for that,” he said.
Reporter Vera Haffey may be reached via e-mail at [email protected].
A Christian who loves kindness will certianly not exploit his fellow worshippers. For example, he realises that it would be neither proper nor kind to start a business or promote an investment scheme that targets felllow believers as the main customers. It would display greed, which Christians are warned against, to plan on making money hastily by exploitng fellow Christians.
So what's the Society's excuse for exploiting it's fellow worshippers?
Here's one from 2002:
This is the text version oif the above article, in case the link evaporates.
--- begin ---
Miami Field Office
Federal Bureau of Investigation
16320 N.W. 2nd Avenue
North Miami Beach, FL 33169
For Immediate Release
November 1, 2002
FORMER CHURCH ELDER CONVICTED OF MULTI-MILLION DOLLAR SECURITIES FRAUD SCHEME
Marcos Daniel Jiménez, United States Attorney for the Southern District of Florida; James K. Belz, Postal Inspector in Charge, United States Postal Inspection Service, Miami Division; and Hector M. Pesquera, Special Agent in Charge, Federal Bureau of Investigation, announced today that on October 31, 2002, a federal jury in Miami convicted Raymond L. Knowles, formerly of Opa Locka and Pembroke Pines, Florida, of all counts charged in the indictment in this case. This case involved a multi-million dollar securities fraud scheme that victimized over 50 investors, primarily elderly and financially unsophisticated investors. Many of these investors were members of Knowles' religious congregation where he served as an Elder.
Mr. Knowles was convicted of 16 counts of mail fraud, 4 counts of wire fraud and 4 counts of securities fraud. Knowles faces a maximum of 5 years of imprisonment with respect to each mail and wire fraud count and a maximum of 10 years of imprisonment with respect to each of the securities fraud counts. A sentencing hearing is scheduled for January 9, 2003, before United States District Court Judge Donald L. Graham.
Using his position as an Elder, Knowles fraudulently sold several million dollars' worth of promissory notes to fellow members of his religious congregation. Among other things, Knowles falsely represented that the promissory notes, which were risky investments dependent upon Knowles' shaky real estate holdings, were in fact, safe and sound investments for elderly, widowed and disabled people, and would return annual yields of 8.5% to more than 20% without any risk. To perpetuate the scheme over a number of years, Knowles, in a "Ponzi" scheme fashion, used funds obtained from later investors to make payments to early investors. He also diverted investor funds to lease luxury cars for his and his wife's personal use, and to pay personal, business and other expenses, including trips to South Africa and Disney World.
Mr. Jiménez commended the investigative efforts of the United States Postal Inspection Service and the Federal Bureau of Investigation, as well as the cooperative efforts of the Southeast Regional Office of the United States Securities and Exchange Commission. The case was prosecuted by Assistant United States Attorneys Richard Hong and Luis M. Pérez, and former Special Assistant United States Attorney Trisha Sindler.
--- end ---
Just so it is clear that Knowles was a JW Elder:
South Florida Sun-Sentinel, Jan. 26, 2003
By Jenni Bergal, Business Writer
In her church, trust among members was a given.
So when Elizabeth Morgan came into a large chunk of money from her late husband's life insurance policy and a malpractice settlement from his unexpected death, she felt comfortable putting it in the hands of a Jehovah's Witnesses elder to invest in real estate.
She bought $764,000 worth of promissory notes from Raymond L. Knowles, a financial consultant and former missionary whom she'd known for many years from the congregation. Knowles assured her that her investment would be safe and that she'd get a high interest rate, Morgan said.
For two years, she received monthly interest checks. But then the checks started coming late, and finally, not at all. Morgan pleaded with Knowles to get her investment back, but it never happened.
Federal officials say Morgan was a victim of one of the most popular types of white-collar crime in recent years: religious affinity fraud.
These investment scams exploit the trust, friendship and tight-knit structure of people in religious groups, regulators say. The perpetrators often are members or claim to be members or enlist respected leaders to spread the word about a financial deal.
"I lost everything," said Morgan, 55, of Lauderdale Lakes. "That was money I had to live off for the rest of my life. I was forced to sell my house and declare bankruptcy."
In October, a federal jury found Knowles guilty on 16 criminal counts of mail fraud, four of wire fraud and four of securities fraud in a promissory note scheme in which prosecutors say he ripped off at least $2 million from Morgan and more than 50 other Jehovah's Witness members, many of them elderly or disabled. His sentencing is scheduled for later this month.
"The theme in these types of cases is that the perpetrators make faith in God synonymous with faith in their investment plan, and you can't separate the two," said Joseph Borg, director of the Alabama Securities Commission and past president of the North American Securities Administrators Association. "Religious affinity fraud is a huge problem, and it's phenomenal what's been occurring all over the country."
Among the cases:
In Philadelphia, the Securities and Exchange Commission filed a civil fraud suit in November against a Georgia businessman and two of his companies, alleging they had raised at least $3 million from more than 1,000 small, mostly black churches nationwide, including more than two dozen in South Florida. Pastors were promised a return of $500,000 for every $3,000 they invested, SEC officials say. The money was supposed to have been invested in a chain of Christian-themed vacation resorts, which were never built.
In Tampa, the founder of Greater Ministries International Church, his wife and three others were found guilty of conspiracy, money laundering and wire fraud in a $448 million financial scam. They used Bible verses to persuade thousands of people to invest in the belief that God would double their money. The church promised big returns from investments in foreign currency and gold and diamond mines. In 2001, the founder was sentenced to 27 years in prison.
In Phoenix, five former executives of the Baptist Foundation of Arizona were indicted on fraud, racketeering and theft charges after state investigators alleged it had raised $570 million from thousands of Baptist investors across the nation in a "Ponzi" scheme, in which money from new investors is used to pay off old ones. Investors who bought securities from the foundation were attracted by high rates of return and told their profits would be spent on church activities. Instead, investigators said the foundation allegedly hid losses and misrepresented its financial condition. The foundation declared bankruptcy and shut down in 1999.
In Boston, the SEC filed civil fraud charges against two companies and four men who allegedly raised $22 million in a securities scam aimed at members of the Christian Science Church. Regulators said they promoted bogus investments in an international trading program that did not exist, and told investors they would earn profits of 48 to 60 percent a year. A federal judge ordered two of the men to pay a $30 million judgment and penalties after they failed to respond to the SEC's complaint.
"These are all people who use a criminal enterprise to commit fraud and tack on religion as a cover," securities director Borg said.
Abuse of trust
Regulators say religious affinity fraud is particularly abhorrent because scam artists use people's faith to prey upon them.
"They're promising those beliefs will be furthered by the investment. They often quote from the Bible and promise parishioners that their money will be spent to further the Lord's work," said Susan Wyderko, the SEC's director of investor education in Washington, D.C.
Some officials say the stock market collapse and the Sept. 11 terrorist attacks might have made religious affinity fraud more popular than ever.
"With the down markets and no one able to make money and people worrying about terrorism and war, many people turn to religion, and the scam artists know that," Borg said. "They dust off the old Ponzi schemes."
Scammers need only to persuade a few influential people to trust them and their investment, regulators say. Often they rely on word-of-mouth or recruit a religious leader or member of a church, who promotes the investment, usually unaware that it's fraudulent.
Morgan said she believed in Knowles because he had been a longtime elder and was well known nationally among Jehovah's Witnesses, especially for his work as a missionary in Africa and a speaker at district conventions.
Federal prosecutors say that between 1993 and 2000, Knowles and his company, All Diversified Financial Services Inc. of Opa-Locka and Pembroke Pines, defrauded investors by issuing risky promissory notes. The company invested in dilapidated properties, which it bought at foreclosure sales and resold or rented. Knowles told investors their money was safe, when, in fact, the company was in debt, according to prosecutors.
Prosecutors said he was running a classic Ponzi scheme and used some of the investors' money to lease two vehicles for himself and his wife and to pay business, personal and other unrelated expenses.
Attorney Miguel Caridad, a federal public defender who represents Knowles, said his client did not want to comment but has denied the charges. "He believes he's innocent, and we're going to appeal," Caridad said.
`We were destroyed'
Jeanette Howison, another of Knowles' victims, says she doesn't believe any of Knowles' claims or protests anymore.
She and her husband, William, both of Hialeah, say they knew and trusted Knowles completely.
When William Howison, a maintenance worker for Miami-Dade County, received a work-related settlement after suffering heat stroke on the job, the couple turned to Knowles for financial advice.
"We were scared silly of stock markets because of the risks we heard about," said Jeanette Howison, 72.
Knowles persuaded them to sign over $70,000 in promissory notes, explaining that he would be investing the money in real estate and it would be perfectly safe, the Howisons said. They ended up losing $55,000.
"We were destroyed financially," Jeanette Howison said. "This was our nest egg."
Her husband, 76, said he suffered from serious depression after their money disappeared. "It's a terrible thing that he used the church," he said.
Not all religious affinity frauds rely on reputation or word-of-mouth, however. Some find investors through the Internet, often appealing to sites popular with religious groups.
"The Internet is a fabulous way for fraudsters to reach a lot of people quickly," said the SEC's Wyderko.
In South Florida last fall, one man pleaded guilty to conspiracy and wire fraud and another to conspiracy in a scheme in which their Internet service provider, Families On Line, raised more than $3.7 million from hundreds of investors, some of them fundamentalist Christians, by selling shares of stock through an unregistered securities offering. The men, both from Fort Lauderdale, are awaiting sentencing.
Federal officials said the company billed itself as a moral and safe alternative to the uncensored Internet for parents, religious organizations and schools. It offered subscribers "filtered" access to the Internet that would remove content involving sex, violence or gambling.
Mark Cecil Thurman, the chief executive officer, and Robert Fiene, the chief operating officer, used false information to raise money from investors, such as claiming their company was affiliated with Trinity Broadcasting Network, a Christian broadcast ministry, and providing a phony letter of support from the network's president, federal officials said.
The company also distributed a prospectus that projected a first-year subscriber base of 2.5 million people, when, in fact, it never exceeded 150 users.
Prosecutors say the men allegedly withdrew at least $1.6 million in investor funds for their own use, which included a $40,000 custom-designed motorcycle, a Hawaiian vacation, a BMW, jewelry and adult novelty items.
Thurman's attorney, Irwin G. Lichter, of Miami, said neither he nor his client wanted to comment. Fiene's attorney, Hampton Peterson, of Fort Lauderdale, could not be reached for comment, despite several phone messages left at his office.
For the victims of Families On Line and Raymond Knowles, the sentencing hearings won't be soon enough.
Jeanette Howison said she hopes to speak directly to Knowles at his hearing, scheduled for Jan. 31.
She plans to start by saying: "All of us trusted you as a brother, spiritual shepherd and one who would die for his sheep, not fleece them."