Now they face a legal battle, as Maryland's attorney general issued a cease and desist order on March 9.
FWC, based in a suburb of Washington, D.C., describes itself as "a financial literacy education company focusing on the African-American Christian community." Its stated goal is to "empower this community to become more actively involved in the wealth creation of the capital markets."
In a February Webcast, Dukes asserted that "as the African-American church, we create over $4 trillion of wealth [on] Wall Street. Financial warfare is a way to get this wealth back into the community." Individuals were drawn into the club expecting to make huge returns on their investments after FWC startup corporations sold common shares in the financial markets.
The background of the two promoters is sketchy. Dukes, a graduate of the U.S. Naval Academy, claims to have been in business during the 1990s. Hodge describes herself as "assisting the church community with strategic partnering" and "marketing Financial Warfare Club to the church community exclusively, traveling the country professing the good news of Jesus Christ."
The club has an office in Camp Springs, Maryland, which it shares with the Victorious Church of Jesus Christ. Financial Warfare also runs an elaborate Web site, FinancialWarfare.com.
Maryland Attorney General J. Joseph Curran Jr. charges that Dukes and Hodge were selling unregistered securities and acting as unregistered securities brokers, which are violations of state law.
"We had to bring a case quickly to stop Financial Warfare from continuing to solicit investor funds," Curran said. "We are very concerned that Financial Warfare is making misleading representations to potential investors."
Lucy Cardwell, an attorney in the Maryland Securities Division, told CT that Curran's order would also seek fines. Financial Warfare can challenge the attorney general's order in court.
Financial Warfare memberships were supposed to provide courses in "financial literacy" and shares in several Internet startup companies, including GlobalCom InterNetworks Inc. (GCI). According to a September 2000 "corporate overview" posted on the Web site, gci was to be the "first media convergence company with the knowledge, skills, access, and ability to successfully target the minority (African-American, Hispanic, and Asian) populations of the United States."
Besides Internet access, the document said, gci planned to launch a network of "community tv stations" in "the top 50 minority markets" in the country. This Internet and television network was to be backed by "community-based newspapers and magazines" in these same markets. Money from advertising sales would make the network a profitable "mini-USA Today" for minority communities. Financial Warfare also claimed to be starting a bank and a marketing company.
Black churches and their members were to provide the startup capital for these ventures. Curran's order asserts that Financial Warfare has not offered the promised financial literacy courses, has yet to distribute any shares, has no business activity, and has failed to disclose these facts to potential investors. Dukes and Hodge did not return phone calls seeking comment.
They have plenty to say, however, in several hours worth of talk-show audio on their Web site. Joined by Sam Hairston, pastor of the Victorious Church of Jesus Christ, the trio preaches an African-American version of the familiar prosperity gospel.
The FWC Web site features a statement by Ramona Edelin, executive director of the Congressional Black Caucus Foundation in Washington, D.C., endorsing another Dukes venture, International Business Group (IBG). "I wholeheartedly support the vision, mission, and aspirations of IBG," Edelin says, "as it pursues the uncharted territory of integrating an entire community in the wealth creation channels of the American economic infrastructure."
Cooperating with Regulators
Edelin was out of the country at press time. The foundation's administrator, Ethel Mitchell, told CT that neither Edelin nor the foundation would have endorsed anything fraudulent.
Dukes and Hodge had until the end of March to respond to the cease and desist order. But in mid-April, the attorney general's office told CT that it had granted an extension to Financial Warfare.
Meanwhile, Financial Warfare has added a pop-up disclaimer to its Web site, saying it is "for information purposes only" and is "not a solicitation to buy or sell any security." The note adds that the organization sells only memberships, not stocks. Several links to sales documents on the site have also been broken, although the documents remain on the site.
Financial Warfare is "cooperating with state regulators to resolve the matter," said Kwame Anthony, FWC's attorney, in a faxed statement. The statement added that "while Financial Warfare Club "does not admit to any wrongdoing," it would offer to return money to any Maryland resident who had previously purchased memberships.
Neither FWC nor Maryland officials would say how much money or how many people are involved in the membership program.
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Maryland Attorney General J. Joseph Curran Jr.'s press release, "Curran moves to shut down church-based investment program," is available at his office's Web site.
Maryland's business and legal news daily newspaper, The Daily Record, also has a news story: "Attorney general issues cease-and-desist order in alleged 'affinity scam'"
FinancialWarfare.comhas now posted a disclaimer on its Internet site, saying, "Please note that our Website has changed significantly. We are offering eduactional [sic] membership only." A new policy statement is available in Adobe Acrobat format.
See Chuck Fager's other articlesfor Christianity Today on similar cases of financial irregularities.
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