Investors Warned on Deals That Use God as Collateral

Con artists, claiming God is their co-investor, bilked thousands of Americans out of more than $450 million in the last five years, according to a study released today by state securities regulators.

“Beware of the growing number of investment con artists who are out to fleece the flocks of the faithful,” John C. Baldwin, president of the North American Securities Administrators Assn., said in a statement.

“Religiously oriented swindles are one of today’s hottest tickets for investment con artists,” said Baldwin, who also is director of the Utah Division of Securities.

Joint Effort

The national survey, a joint effort of the securities association and the Council of Better Business Bureaus, detailed investigations into investment schemes with religious overtones in 15 states.

The survey said the increase in “false prophets of investment has resulted in a surge of state-level complaints from consumers about fraud and abuse by self-proclaimed ‘born again’ financial planners, con artists claiming to be endorsed by local and national church officials, and givers of ‘divinely inspired’ investment advice about coins, precious metals, real estate and oil and gas well programs.”

The alleged scams outlined by the report included:

--A former preacher and Sunday school teacher, now serving four years in prison, who conned more than 600 investors in 20 states “who believed they were dealing with a man blessed by God with extraordinary business abilities.”

--The former treasurer of a large Alabama church, also now in prison, who took an estimated $18 million from investors who were promised a return of up to 30% a month.

--Swindlers who bilked 10,000 investors in Utah out of $215 million by falsely claiming connections to the Mormon hierarchy.

--An oil and gas drilling company ordered by Massachusetts and Missouri authorities to stop selling stock to investors who were told the firm would use Old Testament prophecy to decide where to drill in Israel.

Some scam artists cite Biblical predictions of disaster or social chaos to woo investors in phony gold or rare coin schemes, the report said.