Suggestions On How to Deter Religious Affinity Fraud

Having now spoken to hundreds of people who were swindled by a religious affinity fraud targeted at members of the Church of Christ, I wanted to set forth some suggestions that can be implemented by religious leaders and institutions to help deter and expose these kind of frauds. This list is not an exhaustive list of all possible actions that can be taken but these suggestions are based upon my experience and the information I have gleaned from speaking to many victims. I would encourage others to post additional suggestions or ideas that might be useful and, of course, always contact legal counsel for additional advice. I believe in most cases the minister, religious leader and/or leadership are victims of the religious affinity fraud just like their members.  It is highly unlikely that a religious leader would encourage or invite a fraudster into their organization so that they could dupe or swindle their own members since such actions would be clearly self-defeating to say the least.

Believing that they are encouraging the religious values and tenets of their church or religious group, many ministers, rabbis and other religious leaders provide the fraudster with unfettered access to their congregation, temple members, or religious sect thus unknowingly facilitating the religious affinity fraud or Ponzi scheme.

Below are some recommended processes and tools that religious leaders can use to detect and avoid a potential fraudulent scheme targeting members of a religious group:

1. Religious organizations can set clear, written standards that must be met before anyone can gain access to their members to promote anything regardless of whether it is a book, an investment, financial advice, or a tithing tool. These standards should include a very clear approval process by the church or religious sect leadership.

Most religious affinity fraudsters and Ponzi schemers "create" a reputation as a religious leader which they use to gain access to unwitting victims. Scrutiny of the individual or entity by the leadership of the regligious group may deter the fraudster and/or expose their scheme.

2. Religious organizations can also create a list of information that must be provided by a proposed speaker or claimed religious leader before they are given access to the congregation or members. This list can include such information as verified financial disclosures, a detailed background check of the individual and/or company, and multiple business references which may be checked.  All of this information should be reviewed, if at all possible, by an attorney.

3. It is likely that once a fraud promoter learns that they have to jump through numerous hoops to gain access to the members of the religious organization and that they have to go through a formal approval process, they will move on. The purpose of creating these processes and enhanced scrutiny is to make it more difficult for the fraudster to hide their true identity and intentions and also frustrate their efforts to gain access to the members of the targeted religious group. 4. It is  also strongly suggested that religious leaders educate their members about the characteristics of a religious affinity fraud to help stop fraud promoters for preying on these innocent victims. The more educated the public is about these types of fraud, the less likely it is that the fraudster will be successful.

We  all must be proactive in stopping religious affinity fraud and Ponzi schemes directed at churches or religious organizations.  By educating members of religious organizations about the characteristics of this type of fraud so that they remain vigilant to watch for these types of schemes hopefully we can deter future religious affinity fraud.

Our firm offers a free one hour consultation to church or religious leaders with questions or concerns about religious affinity fraud. Please contact me at clerman@lermanfirm.com to schedule a call.