How Pastors' Ponzis Affect Our Gospel Witness
It begins with a seemingly sincere offer of help from a trusted, Jesus-loving voice. But the conversation always dead-ends in perdition.
Case in point: The New Covenant Christian Center, a Seattle-area independent church, was the setting where a tragically familiar Ponzi scheme took root in 2003. The scheme's organizer offered to double or triple invested money in a matter of weeks through an overseas trading program. In total, 24 church members handed over $1.6 million until law enforcement intervened in 2011 as the fraud collapsed. Who was that trusted voice behind this Ponzi? Anthony C. Morris, the pastor.
In recent years, Ponzi frauds that prey on the naïve, innocent, and trusting have lost billions. The Madoff Ponzi's price tag alone was $20 billion. In these schemes, the organizer offers a high return rate at low risk, but in reality he pays existing investors with funds collected from new investors.
Prosecutors have uncovered more financial fraud in church networks than they ever imagined. "It took the financial downturn. Money was drying up—the new investors were not coming in, so Ponzi schemes collapsed," IRS Special Agent in Charge for Criminal Investigations Ken Hines told Christianity Today.
Hines, based in Seattle, has helped expose Ponzis for more than 20 years. He has seen first-hand how the church environment has proven to be an ideal context for affinity fraud. "When you go to church, you don't expect to get lied to or deceived or manipulated into losing your life's savings."
The New Covenant Ponzi was no isolated event. The stain of fraud that may have started in the pew has now spread to the pulpit. More pastors, elders, and other spiritual leaders are engaged in or endorse investments that later turn out to be Ponzis. Unfortunately, there are too many examples to cite. Here are three:
- In the Ukraine, Nigerian megachurch pastor Sunday Adelaja faces a civil suit that he took a leadership role in the $100 million Kings Capital fund, which turned out to be a Ponzi. There are hundreds of victims.
- Under the sponsorship of pastor Eddie Long and New Birth Missionary Baptist Church near Atlanta, lay minister and business executive Ephren Taylor persuaded church members to invest in City Capital Corp. for a "guaranteed 20 percent return." But investors, who have filed suit alleging a Ponzi scheme, may have lost more than $1 million.
- A federal judge in Portland recently sentenced a former preacher, Johnny "Mickey" Brown, to almost 11 years in prison for a Ponzi fraud in which he misused the credit cards of mostly elderly church members and others. Losses may exceed $4 million.
The sickening net effect of fraud puts a dark cloud over pastors and other leaders in local churches. Very few pastors will ever become certified financial planners. The issue is honesty and integrity, not investment advice per se. If a faithful church member cannot trust his or her own pastor, whom can they trust?
This is why when it comes to investment advice (not advice about the family budget or paying off your credit card debt) a pastor should stay two steps away from any investment plan under discussion. At the practical level, that means no endorsement or involvement of church or personal funds. Remove all appearances of conflict of interest so that public trust can thrive.
Pastors can also help church members use unbiased third parties to evaluate investments. We should be skeptical of returns exceeding 8 to 12 percent annually and avoid secretive or highly exclusive investments.
Star Trek Into Darkness
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kelly odonnell
Thx for this article on the reality of corruption--"the abuse of entrusted power for personal gain" (Transparency Int.); we are consulting in India now & heard of a sad ponzi in poor churches with pastors used by fraudsters & so many lost the little they had--so I appreciate the international info in this CT report; my wife and I were interviewed in the CT article 6/2011 on the NCI fraud in the church-mission community; since then the case went to the Swedish Supreme Court & it upheld the previous verdict of gross fraud, and ONE person a Swede was sentenced; but there are still many other aspects to this international fraud as Dr Todd Johnson points out in this article; currently there's an international petition calling for the people, projects & organizations affected to disclose & for members/donors of these organizations to hold them accountable; with info & core links, a practical way for us all to fight fraud: Shine the Light! www.ipetitions.com/petition/shine-the-light-together
Grady Walton
The explosion of financial crime in the church is more serious than the average congregant realizes. Some perpetrators target the church's money while also picking off the money of members of the congregation. Iv'e witnessed the devastating consequences first hand. While the church has focused on the more provocative sins, the love of money has quietly exploded in our sanctuaries. In my humble opinion, one root of the problem is our tendency to focus too much on the senior pastor. In other words, we see the pastor preaching in front of the church each week. We connect on some level to the pastor's style and personality. We develop a feeling of trust for our pastor. The pastor becomes a sort of spiritual celebrity in our life. Without realizing it, we almost idolize our pastor. So when the pastor recommends an investment, we jump. I think it's time for the church to start being about the church, which is the folks in the pews, not so much the man up front.
Steve Skeete
Why would church-going people take bad financial advice from their pastors? They also take bad spiritual advice! Anyone who tells you that being a Christian will almost certainly, or necessarily, bring you prosperity and wealth in this life, and can get you to believe that, can certainly get you to invest in some lame-brained financial scheme. More frightening than all the fraudsters masquerading as pastors however, is the fact that with all the teaching tools and aids, and the wealth of knowledge available, people today appear to be as gullible as they ever were. Few seem willing to do anything for themselves anymore, everyone now needs an adviser, a trainer, a 'coach', a motivator, a guru, or some pope, to make ex-cathedra pronouncements and scratch their 'itching ears'. The end result, as predicted, is that 'evil men and impostors' are going 'from bad to worse, deceiving and being deceived'. In short, church-goers are paying the price for their inability to endure sound doctrine.