(September 1 – 13:00 ET) – Regulators at the North American Securities Administrators Association are issuing a warning to investors. A new breed of securities fraudster is targeting members of religious groups. The association notes a surge in the number of such cases.
Regulators have dubbed the phenomenon “affinity fraud.” Con artists hit people that share their ethnicity, background, or religion. Religion-related targeting is particularly pernicious, the association says, because it plays on people’s faith. It also exploits the greater trust people place in those professing to share their beliefs. As with most scams, the elderly are particularly vulnerable.
The NASAA cites a number of recent examples of affinity fraud. In Indiana, elderly investors were fleeced by a couple of insurance agents and an investment adviser “who often got on their knees and prayed with their victims to gain their trust.” Another promoter nailed investors with a scheme to find oil “based on visions he had received from God.” A Tampa-based Ponzi scheme at a church may have defrauded more than 17,000 investors out of US$200 million. The victims were fundamentalist Christians.
While these examples are all American, affinity fraud is also known in Canada. David Andrus, disgraced president of Provident Financial, was charged with fraud against two elderly clients he reportedly met through his church in Toronto. Andrus was also the Canadian head and international treasurer of the Christian foreign relief charity World Vision. He was banned for life from the securities industry last year after regulators found he had fleeced clients of $800,000.
-IE Staff
For more information, please see:
www.nasaa.org