An Overview of Religious Financial Fraud
Christian News Today
Ephesians 5:11 & Mark 4:22
EPHESIANS 5:11 And have no fellowship with the unfruitful works of darkness, but rather expose them. 12 For it is shameful even to speak of those things which are done by them in secret. 13 But all things that are exposed are made manifest by the light, for whatever makes manifest is light. 14 Therefore He says: " Awake, you who sleep, Arise from the dead, And Christ will give you light." MARL 4:22 For there is nothing hidden which will not be revealed, nor has anything been kept secret but that it should come to light.
An Overview of Religious Financial Fraud
The $34 Billion Scandal
reported that Christian religious leaders will commit an estimated $34 billion
in financial fraud in 2011 while $31 billion will be spent on global missions.
Researchers from the Center for the Study of Global Christianity estimate that Christian religious leaders will commit $90 million in financial crimes daily and the fraud is growing at a rate of 5.97% each year. If the researchers are
correct, religious financial fraud among Christians will almost double in 14
Dr. David Barrett, the first editor of the World Christian Encyclopedia and a
researcher for the Center, has been studying religious financial fraud for more
than 20 years. According to Dr. Todd Johnson, the Cent
er‘s
director, these statistics were the result of Barrett
―
developing a balance sheet for global
Christianity.
‖
Barrett was
―tryi
ng to understand the totality of Christian
finance.
‖
A Global Problem
Barrett and Johnson in the reference book
―World
Christian Trends
‖
reported,
―Pro
bably 80% of all cases are kept private or swept under the carpet, but
each year a rash of megathefts (over $1 million each) is uncovered and
publicized in the secular media.
‖
Here is a small sample of religious financial
scandals from around the world:
Brazil: Bishop Edir Macedo, head of the Universal Church of the Kingdom
of God, and 9 of his associates have been charged with
China: A whistleblower goes to jail for speaking out after donations for earthquake victims were stolen.
Italy: Police confiscated 23 million euros in a Vatican bank account as part of an investigation into money laundering.
Ukraine: Pastor Sunday Adelaja charged with fraud in promoting a business venture to his congregation that lost $100 million.
United Kingdom: Church treasurer Derek Klein embezzled funds to pay
United States: Trent Huddleston, former senior accountant at Oral Roberts University, alleges that more than $1 billion was money
laundered annually by members of the Oral Roberts University board.
Common Funding Sources of Religious Thieves
1.
The Offering Plate
—
In 2002 NBC Dateline aired an exposé on Benny
Hinn. Mike Estrella, a former Benny Hinn Ministries employee
responsible for counting the money given at Hinn
‘s
crusades, said that
he observed Gene Polino, Hinn
‘s
CEO, embezzle thousands of dollars
from the crusade collection buckets.
Wikipedia describes this practice as
―skim
ming
‖
which
―refers
to taking
cash
‗
off the top
‘
of the daily receipts of a business
…
‖
This form of fraud is hard to detect but occassionally the skimmers are
caught. A member of St. Ita Catholic Chu
rch‘s
finance committee
marked a $100 bill before placing it in the offering plate. The bill disappeared before the church could deposit it in the bank. A priest later
2.
The Ministry Checking Account and Credit Card
—
Jason Reynolds,
the finance director of National City Christian Church, used the church
credit card to acquire a Lexus SUV and Land Rover. He also embezzled over $200,000 by writing himself checks.
These forms of fraud can be reduced by requiring two signatures for
checks and by insisting on lower credit limits for credit cards.
3.
Investments
—
In 1999 the Baptist Foundation of Arizona filed for
bankruptcy after accumulating $530 million in liabilities. Dishonest administrators engaged in a cover-up to hide bad investments. William
Crotts and his associates set up more than 90 dummy corporations to
hide financial losses and used a ponzi scheme to cover old investments.
An Overview of Religious Financial Fraud New Church Ventures was the largest dummy corporation formed by the
BFA and held $173 million in debts. New Church Ventures had zero
employees and provided no funds for building new churches even
The Phoenix New Times investigated Jalma Hunsinger, the president of
New Church Ventures, and reported on strange insider deals and flipped property fraud. The owner of the Simms Tower offered this $1.9 million
building to the BFA for $1 as a tax write-off because the building was
contaminated by asbestos. When the Foundation turned down the offer, Hunsinger acquired the building and used it as collateral for a BFA $6.8
Trinity Foundation Investigates the Televangelists
‗
s production company was failing. Out of
desperation he pledged money to televangelist Robert Tilton in hopes for a
financial blessing. When Guetzlaff lost his home and approached Tilton
‘s
organization for help, he was denied any assistence. Guetzlaff went to the
Foundation. Anthony launched an investigation into Tilton
‘s
direct mail operation and assisted the ABC News program PrimeTime Live on a TV
exposé.
The Trinity Foundation has investigated religious financial fraud for 23 years.
Trinity investigators have gone through the trash of televangelists to obtain
evidence, worked undercover inside ministry offices, assisted TV news programs and newspapers in developing investigative reports, and operated a
phone line for victims of fraud (1-800-229-VICTIM). While conducting these investigations the Trinity Foundation has redefined its
mission. The Trinity board adopted a 4-point agenda for opposing religious
financial fraud.
1.
Increase public awareness by continuing to provide information
requested by various news media organizations and giving interviews when appropriate.
2.
Enable the establishment of civil case law regarding religious fraud.
3.
Enable the establishment of criminal case law regarding religious fraud.
4.
Work with government agencies toward establishing greater
The IRS Dirty Dozen
The United States Internal Revenue Service posts an annual list of the