Article summary. Unscrupulous individuals are targeting churches and church members in fraudulent investment schemes. Church leaders must be aware of this risk and take steps to protect church assets as well as the assets of church members. This article will help church leaders accomplish these vital tasks.
Many churches, and church members, have been victimized by investment fraud. This article will assist church leaders in protecting church assets, and the assets of church members, from such scams.
A church raises $250,000 for its building fund but is still years away from reaching the goal specified by the congregation before construction can begin. This year the pastor meets Jon, an "investment expert," who seems very knowledgeable about investment opportunities. Jon claims that he can turn the 1% return the church is earning on its building fund in a local bank to 30% or even 50%. The pastor is skeptical at first, but begins to see Jon as an answer to prayer. "Within just a few years, we will be able to begin construction on our new sanctuary," he muses. The pastor is also impressed by Jon's description of a "high yield investment program" involving international banks. The pastor invites Jon to make a presentation to the church board. Jon assures the board that the investment program only involves the "top ten world banks." The board is impressed, and votes to turn over the investment of the church's building fund to Jon. Within a few months, Jon suggests that the pastor promote the investment program to members of the congregation. With the pastor's encouragement, many church members invest their own funds in Jon's program. After several months, the pastor, board, and individual investors begin to wonder when they will receive their 50% return on their investments. Jon assures them that it is only a matter of time. A year passes, and still no earnings have been reported. Federal investigators contact the pastor and explain that Jon was engaged in a multi-million dollar securities scam, and that there is little chance that the church, or the individual investors, will ever receive back their invested funds much less any earnings. The pastor is devastated, as is the church board. Some church members invested their life savings in what they believed was a blessing from God. Several members begin blaming the pastor and board.