Religion-Related Fraud Getting Worse
By Rachel Zoll
AP Religion Writer
Aug. 14 2006
http://www.christianpost.com/article/20060814/23709.htm

Randall W. Harding sang in the choir at Crossroads Christian
Church in Corona, Calif., and donated part of his conspicuous
wealth to its ministries. In his business dealings, he
underscored his faith by naming his investment firm JTL, or
"Just the Lord." Pastors and churchgoers alike entrusted
their money to him.

By the time Harding was unmasked as a fraud, he and his
partners had stolen more than $50 million from their clients,
and Crossroads became yet another cautionary tale in what
investigators say is a worsening problem plaguing the
nation's churches.

Billions of dollars has 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.

Between 1984 and 1989, about $450 million was stolen in
religion-related scams, the association says. In its latest
count "from 1998 to 2001" the toll had risen to $2 billion.
Rip-offs have only become more common since.

"The size and the scope of the fraud is getting larger," said
Patricia Struck, president of the securities association and
administrator of the Wisconsin Department of Financial
Institutions, Division of Securities. "The scammers are getting
smarter and the investors don't ask enough questions
because of the feeling that they can be safe in church."

Cases in recent years show just how vulnerable religious
communities are.

Lambert Vander Tuig, a member of Saddleback Church in
Lake Forest Calif., ran a real estate scam that bilked
investors out of $50 million, the Securities and Exchange
Commission says. His salesmen presented themselves as
faithful Christians and distributed copies of "The Purpose
Driven Life," by Saddleback pastor Rick Warren, according to
the SEC. Warren and his church had no knowledge of Vander
Tuig's activities, says the SEC.

At Daystar Assembly of God Church in Prattville, Ala., a
congregant persuaded church leaders and others to invest
about $3 million in real estate a few years ago, promising
some profits would go toward building a megachurch. The
Daystar Assembly was swindled and lost its building.

And in a dramatically broader scam, leaders of Greater
Ministries International, based in Tampa, Fla., defrauded
thousands of people of half a billion dollars by promising to
double money on investments that ministry officials said
were blessed by God. Several of the con men were
sentenced in 2001 to more than a decade each in prison.

"Many of these frauds are, on their face, very credible and
legitimate appearing," said Randall Lee, director of the Pacific
regional office of the SEC. "You really have to dig below the
surface to understand what's going on."

Typically, a con artist will target the pastor first, by making a
generous donation and appealing to the minister's desire to
expand the church or its programs, according to Joseph Borg,
director of the Alabama Securities Commission, who played a
key role in breaking up the Greater Ministries scam.

If the pastor invests, churchgoers view it as a tacit
endorsement. The con man, often promising double digit
returns, will chip away at resistance among church members
by suggesting they can donate part of their earnings to the
congregation, Borg says.

"Most folks think `I'm going to invest in some overseas deal
or real estate deal and part of that money is going to the
church and I get part. I don't feel like I'm guilty of greed,'"
Borg says.

If a skeptical church member openly questions a deal, that
person is often castigated for speaking against a fellow
Christian.

Ole Anthony of the Trinity Foundation Inc. in Dallas, which
investigates fraud and televangelism, partly blames the
churches themselves for the problem. Anthony contends that
the "prosperity gospel" which teaches that the truly faithful
are rewarded with wealth in this life is creeping into
mainstream churches.

Chuck Crites, a former member of Crossroads Church,
learned firsthand how effective con artists can be.

The businessman was swindled out of $500,000 by Harding
in a Ponzi scheme, which uses money from newer investors
to pay off older ones.

Crites said Harding, who pleaded guilty last year to wire
fraud and money laundering, boasted about helping fund a
new Christian high school for Crossroads and hired a music
pastor from the megachurch as a sales agent. "At one point
he even told me how much money he had given to the
church that year," Crites said.

Harding was nabbed with the help of Barry Minkow, who was
himself convicted of fraud years ago. Minkow eventually
became a pastor in San Diego and started the Fraud
Discovery Institute, which is dedicated to investigating
scams.

Crites is putting his money toward a new fraud-awareness
kit for churches and other groups that Minkow is developing.

"It made me angry at how people are abusing the trust that
exists in church communities," Crites said.

Investigators say all denominations are at risk, but the most
susceptible communities are ones where members are
deeply engaged in church activities, such as service programs
and small group prayer, giving con artists plenty of chance to
ingratiate themselves with congregants.

Often, perpetrators are so successful building an image as
good Christians that churchgoers won't cooperate with law
enforcement authorities even after the crime is revealed.

"Money has a way of blinding objectivity, even for we who
are believers," Minkow says.