- The Washington Times - Monday, August 14, 2006


Randall W. Harding sang in the choir at Crossroads Christian Church in Corona, Calif., and donated part of his conspicuous wealth to its ministries.

In his business dealings, he underscored his faith by naming his investment firm JTL, or Just the Lord. Pastors and churchgoers alike entrusted their money to him.

By the time Harding was unmasked as a fraud, he and his partners had stolen more than $50 million from their clients, and Crossroads became yet another cautionary tale in what investigators say is a worsening problem plaguing the nation’s churches.

Billions of dollars have been stolen in religion-related fraud in recent years, said the North American Securities Administrators Association, a group of state officials who work to protect investors.

Between 1984 and 1989, about $450 million was stolen in religion-related scams, the association says. In its latest count, from 1998 to 2001, the toll had risen to $2 billion. Rip-offs have only become more common since.

“The size and the scope of the fraud is getting larger,” said Patricia Struck, president of the securities association and administrator of the Wisconsin Department of Financial Institutions’ Division of Securities. “The scammers are getting smarter, and the investors don’t ask enough questions because of the feeling that they can be safe in church.”

Cases in recent years show the vulnerability of religious communities.

Lambert Vander Tuig, a member of Saddleback Church in Lake Forest, Calif., ran a real estate scam that bilked investors out of $50 million, the Securities and Exchange Commission (SEC) says. His salesmen presented themselves as faithful Christians and distributed copies of “The Purpose Driven Life,” by Saddleback pastor Rick Warren, the SEC said. Mr. Warren and his church had no knowledge of Vander Tuig’s activities, the SEC said.

At Daystar Assembly of God Church in Prattville, Ala., a congregant persuaded church leaders and others to invest about $3 million in real estate a few years ago, promising some profits would go toward building a megachurch. Daystar Assembly was swindled and lost its building.

In a dramatically broader scam, leaders of Greater Ministries International, based in Tampa, Fla., defrauded thousands of people of a half-billion dollars by promising to double money on investments that ministry officials said were blessed by God. Several of the con men were sentenced in 2001 to more than a decade each in prison.

“Many of these frauds are, on their face, very credible and legitimate appearing,” said Randall Lee, director of the Pacific regional office of the SEC.

A con artist typically will target the pastor first, by making a generous donation and appealing to the minister’s desire to expand the church or its programs, said Joseph Borg, director of the Alabama Securities Commission.

If the pastor invests, churchgoers view it as a tacit endorsement. The con man, often promising double-digit returns, will chip away at resistance among church members by suggesting they can donate parts of their earnings to the congregation, Mr. Borg said.

If a skeptical church member openly questions a deal, that person often is castigated for speaking against a fellow Christian.

Chuck Crites, a former member of Crossroads Christian Church, was swindled out of $500,000 by Harding in a Ponzi scheme, which uses money from newer investors to pay off older ones.

Mr. Crites said Harding, who pleaded guilty last year to wire fraud and money laundering, boasted about helping fund a new Christian high school for Crossroads and hired a music pastor from the megachurch as a sales agent.

Harding was caught with the help of Barry Minkow, who was convicted of fraud years ago. Mr. Minkow eventually became a pastor in San Diego and started the Fraud Discovery Institute, which is dedicated to investigating scams.

Mr. Crites is putting his money toward a new fraud-awareness kit for churches and other groups that Mr. Minkow is developing.

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