Churchgoers are being swindled out of millions annually

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CORONA, Calif. — Churchgoers across the country are not exempt from scam artists preying on them, in fact, they are prime targets, according to Concerned Women for America, which recently released a warning to churches nationally saying Christians are being bilked out of millions of dollars annually.

Chuck Crites, a former parishioner at Crossroads Christian Church in Corona, was one of hundreds scammed out of more than $60 million in a ponzi scheme by a fellow men's small group member who studied The Purpose Driven Church with him weekly.

Randall Harding, who has since pled guilty to fraud, was also a choir member, whose wife serves on the board of directors for Crossroad's London Institute, which teaches evangelism and other Bible studies, at the church of about 5,000 members.

He is set to be sentenced for fraud and money laundering Nov. 25.

Crites, who owns a real estate and mortgage company in Corona, said that since some church staff members were investors, and even recruiters, he felt he was in safe hands.

"I thought to myself 'we're not all stupid.' It made me think that all of them had done their research and background checks on this investment."

Crites initially invested the minimum $25,000 and received the expected 12 percent return three months later. At which point he began investing more.

"It was hard to argue with the results," said Crites who now attends Evangelical Free Christian Church in Corona. "That's how the ponzi works."

Even though some of the church staff members were also victimized, Crites said he wished the leaders had done a better job at "protecting their flock."

"A lot of people were really betrayed," he said.

Several phone calls to Crossroads' pastors were not returned.


Escalating problem
Harding is only one of many nationwide who have used the ponzi scheme—where the con man uses money from newer investors to pay older ones—as a method to profit from trusted church friends and acquaintances.

According to an Associated Press article, about $450 million was stolen in religion-related scams between 1984 and 1989. From 1998 to 2001—the toll had risen to $2 billion.

Right now is the best opportunity for church members to get caught up in fraud, according to Barry Minkow, founder of the Fraud Discovery Institute in San Diego and pastor of Community Bible Church in the city.

"It's a perfect fraud storm," said Minkow, who was hired by the FBI to investigate fraud after being released from prison for the same charges. "People are dissatisfied with what their banks and Wall Street investments are giving them, even the average middle-income person can draw out equity on their home and the interest rates are low.

"The target used to be people who were rich. Now it includes anyone who can get equity out of their home or use their retirement accounts."


Easy targets
Across the country, Christians are getting sucked into scams that devastate them financially and emotionally—all while church critics look on.

Jeff Miller, the former pastor of Mission Community Foursquare Gospel Church in downtown Riverside, who now ministers in Oregon, was swindled out of almost $100,000 in a ponzi scheme called Financial Advisory Consultants. In addition to his losses, Miller had advised other pastors to invest as well.

He was not the only one unwittingly preyed on.

"I have eight clients in the Inland Empire, and I think I've just hit the tip of the iceberg," said Los Angeles attorney, David Robinson, who represents Luann Long of Riverside, who invested her husband's life insurance money after he died in a car accident in 2003. "She (Long) is trying to recoup $1.8 million she invested."

Miller had earlier referred Luann's husband, Don, to invest in the program.

Miller said in a newspaper article, he was enticed by the annual return rate of his investment ranging from 18 percent to 43 percent. The plan was so enticing that Miller invested his entire $70,000 pension from the church and another $25,000 from the sale of a home. His wife rolled over her $3,500 retirement account into the scam.

The Millers could not be reached for contact.

The International Church of the Foursquare Gospel also lost money. Church lawyers are currently working with authorities to recover $14 million it invested with this and another ponzi scheme.

Saddleback Church in Lake Forest had a church member who bilked other churchgoers out of $50 million, according to the Securities and Exchange Commission.  

A few years ago, Daystar Assembly of God Church in Prattville, Ala., experienced heartache when church leaders trusted a church member to invest about $3 million in real estate. He promised profits would go toward building a megachurch. Daystar Assembly never saw the return on its investment and eventually lost its building.


Wolf in the flock
In yet another case, Pastor Gerald Payne, 65, was recently sentenced to 27 years in federal prison for masterminding a $448 million scam from his followers.

His plan used Bible verses as a basis for touting that "God would double their money" if they gave it to Gerald Payne's Greater Ministries, based in Florida."

Millions have not been found and millions more were lost in bad investments.

When the sentence was handed down by U.S. District Judge James Whittemore, he chastised Payne for being a "wolf in sheep's clothing," the Associated Press reported.

"Every few years a new get-rich-quick scheme comes to light and we discover that Christians have, once again, fallen for a scam artist's pitch," Janice Shaw Crouse, senior fellow of CWA's Beverly LaHaye Institute, said in a news release "The trust that Christians have for each other makes communities of believers particularly vulnerable to those who seem to be part of their fellowship. Those who appear to be investing in the Lord's work are greatly admired and others want to help them achieve their laudable goals. The really good criminals know how to prey on that trust by linking their scheme to a church or parachurch organization."

Crouse went on to add that "These scam artists are master manipulators; they know how to generate 'group think.' Skeptical people are 'shamed' into staying silent because fellow Christians are investing in 'kingdom causes' and are using their money for 'holy' purposes."


Don't be naïve
"If you think you are not a target, you will be the next target," Minkow warned. "We need to teach our congregations how to prevent this and implement policies in churches that don't allow conflicts of interest to arise."

Crites said he has a plan to do exactly that.

He has teamed up with Minkow and his Fraud Discovery Institute to produce a Fraud Kit that consists of a DVD and booklet describing ways to scrutinize any investment opportunity to which they may be presented.

"This will be a valuable product if we can get pastors and banks to use it to warn others before they lose thousands of dollars," Crites said. "It's not a boring textbook. It's a small booklet with a resource manual showing how to make wise investments."

The kit will be available Nov. 1 by calling the Fraud Discovery Institute at 1-888-300-8307.

"I look back and wish I had more wise counsel," Crites said. "If all of this was for others to not walk around like blind sheep, then it's worth it. My hope is that the church won't be so vulnerable."