People of faith vulnerable to 'affinity frauds,' authorities say

Shawnee News-Star/November 26, 2001

Sacramento, California -- Mark Jackson drove a $62,000 Humvee and wore a $2,200 wristwatch. His Covenant Broadcasting Network in Nashville, Tenn., was worth millions, he claimed.

So it looked like an attractive offer when Jackson, seemingly a man of great faith, offered to let the Rev. Phillip Goudeaux and Sacramento's Calvary Christian Center invest in his network.

The result: Goudeaux and his flock were fleeced of $620,000.

The case is just one example of what authorities call "affinity fraud," in which con artists prey upon people's willingness to believe members of their same religious, ethnic, career or community-based group.

Religious scams may be the most common, lucrative and insidious of all, authorities say. The victims' faith -- faith in God, faith in the clergy, faith in fellow believers -- is used against them.

The North American Securities Administrators Association says there were $500 million in losses from religious affinity scams in 1989, the first year the organization made such a tally.

That figure has been eclipsed by two recent schemes -- the Baptist Foundation of Arizona and Florida's Greater Ministries International -- which together have cost 40,000 investors nearly $1.3 billion.

In the last three years alone, 27 states have taken action against scams that used religious or spiritual beliefs to bilk more than 90,000 investors, the NASAA estimates.

Forrest Bomar was trying to avoid stock fluctuations when he invested most of his life savings with the Baptist Foundation of Arizona, which authorities say devolved into a pyramid scheme that used money from new investors to pay previous investors.

The foundation declared bankruptcy and was shut down by state regulators in 1999. Three foundation officials pleaded guilty to defrauding investors.

"I thought I had the best of both worlds. Here was an organization that was doing good and was offering investment returns that I couldn't match anywhere else," said the 73-year-old Southern Baptist from Palestine, Texas.

Bomar said he was told, '"Your money is protected by the Lord.' They were parading under the guise of a Christian cause, and it turned out to be anything but."

He spent months in counseling and took medication to combat depression and high blood pressure after the scheme collapsed. "I went into complete disbelief. I thought this can't be possible, a religious organization like this."

Bomar's experience is typical, said Robert Lovret, a certified public accountant in Santa Ana, Calif., whose church was scammed by BFA.

"People are trusting. I come up and pray with you, and I talk the lingo. It confers instant credibility," Lovret said. "People have actually committed suicide because they've been so despondent over losing their life savings."