Category Archives: Seniors

FORBES: You Should Avoid Church and Rotary In Retirement Planning

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This article appeared in Forbes Magazine this month:

Avoid Church and Rotary In Retirement

MITTERFIRMIANSREUT, GERMANY - JANUARY 14: Vis...

Robert Laura, Contributor

As shocking as this may sound, when it comes to planning and investing your retirement savings, religious and civic organizations are quickly becoming places to avoid.  In the not-so-distant past, you could rely on the fellow who lead the pledge of allegiance or said the deeply devotional group prayer, but the growing trend of Affinity Fraud suggests those closest, and most like you, should be kept the furthest from your life savings.

Unlike “hate” crimes that are committed across racial, ethnic or religious lines, Affinity Fraud targets members of identifiable groups, such as religious or civic organizations, ethnic communities, elderly people and even professional associations.  Fraudsters infiltrate a group and seek to exploit the trust and friendship among its members. Often times they get a long-standing or high ranking member(s) of the group to unwittingly endorse the scheme and the scam spreads faster than a California wildfire. Continue reading →

The LDS Church Issues a Strong Position on Affinity Fraud

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I am pleased to see that after years of urging from me and others who have seen affinity fraud perpetrated within LDS church congregations for years (especially in Utah County) the church has finally stepped up to the plate and taken a stronger position on this issue.  They did so at the annual Fraud College event that took place on February 15, 2012 at the University of Utah, and on their website.  The church was asked to speak at the first Fraud College 2010, but they declined that year, and they declined again in 2011.  This “head in the sand” response to the problem was infuriating to federal and state law enforcement officials – and to me.

Thankfully the Church leadership finally decided this year that they needed to acknowledge and confront the growing incidence of church members — often in positions of trust within the church — victimizing other church members.  The FBI has stated that Utah is a hot spot for financial fraud and estimate that $2 billion worth of fraud is “under investigation or being prosecuted in Utah courts.”

The speaker at the conference was Michael Otterson, managing director of the Church’s Public Affairs Department.  And he didn’t mess around.  He compared fraudsters to child molesters because they “exploit one of the things we value most: the trust that makes our communities what they are.”

Continue reading →

Fleecing the Flock: The Big Business of Swindling People Who Trust You

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This a repost of a great article on affinity fraud that appeared in this week’s Economist Magazine.

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Fleecing the flock

The big business of swindling people who trust you

Jan 28th 2012 | SALT LAKE CITY | from the print edition

WITH a nudge from their pastor, the 25,000 members of the New Birth Missionary Baptist Church near Atlanta opened their hearts, and their wallets, to Ephren Taylor. And why not, given his glittering credentials? Mr Taylor billed himself as the youngest black chief executive of a publicly traded company in American history. He had appeared on NPR and CNN. He had given a talk on socially conscious investing at the Democratic National Convention. Snoop Dogg, a rapper, had tapped him to manage a charitable endowment.

So when Mr Taylor’s “Wealth Tour Live” seminars came to town, faithful ears opened wide. Eddie Long, the mega-church’s leader, introduced Mr Taylor at one event with the words: “[God] wants you to be a mover and shaker…to finance you well to do His will.” Mr Taylor offered “low-risk investment with high performances”, chosen with guidance from God. Continue reading →

The SEC is Targeting Affinity Fraud

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This is a re-post of an article in Financial Advisor Magazine on how the SEC is increasingly looking into affinity fraud issues:

SEC TARGETING AFFINITY AND MICROCAP FRAUD

Social media and the Internet are making it easier for people to commit affinity fraud — when a person uses a common bond he has with others to cheat them out of their money, says SEC Chairwoman Mary L. Schapiro.

U.S. Attorneys in several states have made arrests recently in cases in which a Jewish person misused trust from a close-knit Jewish community or someone infiltrated an elderly community to build enough trust to sell fraudulent investments.

“Religious groups or ethnic groups can be a hot bed for these types of fraud,” says Owen Donley, chief counsel of investor education and advocacy. “We put out publications and use social media to fight this. I would hope this type of fraud is not something an advisor would fall for, but it is something advisors can help their clients watch out for. Continue reading →

Great Advice for Seniors on How to Avoid Affinity Fraud

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This is a repost of a terrific article that appeared in Morningstar this week:
Seniors: Beware of Affinity Fraud By Christine Benz 
In hindsight, a scam like the one Bernie Madoff perpetrated on his victims looks like it should’ve been a cinch to detect. Madoff’s clients were promised steady returns of 10%-12% per year; that should’ve looked impossible even to novice investors, particularly given the extreme market volatility that marked the first decade of the 21st century. Financial analyst and Madoff whistle-blower Harry Markopolos said he knew that Madoff had faked his clients’ returns within five minutes of seeing them. Continue reading →