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Weekly Lessons, created and written by Richard R. Hammar, J.D., LL.M., CPA, give you a basic legal overview of essential topics based on staff or volunteer positions within a church.

Previous Lessons

Week of December 23

Investment Fraud - Part 3

Week of December 30

Investment Fraud - Part 2

This Week's LessonWeek of December 16

Investment Fraud - Part 4

Introduction

Our lesson this week examines the topic of Investment Fraud. The Executive Summary provides a concise review of the key points. Before we get started, test your knowledge by completing the following quiz.

A church board meets with an investment advisor who persuades the board to invest the church's building fund (amounting to $150,000) in a "guaranteed" investment through a Swiss bank. The board is convinced that the advisor, who is a former minister, is a financial expert who will help the church to raise the funds it needs to begin its building program. The expert is a fraud, and the church's building fund is never recovered. Are the board members potentially liable for the loss of the church's funds?

Weekly Quiz

Instructions Click on the correct answer for each of the following questions.

Executive 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 lesson is the fourth in a series that will explain the most common forms of investment fraud, provide several examples from real life, address the fiduciary duty of church leaders to invest church funds prudently, and provide practical steps that church leaders can take to minimize if not eliminate this risk. This week's lesson addresses the potential liability of church leaders for investing church funds in fraudulent schemes.

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