Watch Out for “Christian Con Men”
(Investment Guidelines)
James E. Guinn, CPA

Introduction

Over the past few years, ministers and church members have become the targets of misguided and even unscrupulous investment promoters. Never have so many ministers and church members been involved in bad investments: savings accounts wiped out, children’s college funds dissipated, and retirement funds wasted. Ministers have even sold their homes to invest the equity in questionable investments.

General Investment Guidelines

This chapter focuses on several guidelines investors should follow when considering an investment. These guidelines will enable you to intelligently investigate investment offers and their promoters. Some of this advice is not original, but it is based on sound investment strategy.

1. First, PRAY about it.
2. Check the reputation of the promoters and the company he represents. Obtain and review financial statements, and then contact the references given of previously satisfied customers (and dissatisfied customers, if possible).
3. Investigate all aspects of the potential investment. Ask for financial statements, projections, cash flow projections, analysis of tax benefits, etc. If you do not have the expertise to interpret this data, engage your tax attorney, CPA or other qualified advisor to help you.
4. If, after an objective review of all aspects of the offer, you determine the results promised are probable, determine if the investment fits your personal expectations of risk and return. Always consider the possibility that you can lose your entire investment.
5. Follow up regularly on the performance of the investment project. If the results are not acceptable, be quick to take action to improve performance if possible and be prepared to take action to cut your potential losses if future performance does not look promising. Holding on to an investment that has gone sour may only increase your losses.
6. Finally, PRAY about it some more.

Christian Con Men

In the past few years, unscrupulous promoters claiming to be Christians have taken literally millions of dollars from fellow Christians for illegitimate oil deals, gold mine schemes, multimarketing pyramid schemes and other get-rich-quick schemes. What a tragedy for ministers and church members, who have worked hard all their lives to provide for their retirement or for their children’s education, to be conned out of their savings.

If you are approached by an investment promoter, consider the following:

1. If the investment sounds too good to be true, it is.
2. If this single investment is supposed to make you rich, it is maybe a get-rich-quick scheme and probably not a sound investment.
3. If the person promoting the investment requires cash before furnishing all the details of the investment to you, consider this a red flag. Never make even a down payment without fully understanding the investment’s potential and risks.
4. If the promoter does not provide financial statements showing the results of similar ventures and financial statements showing his and/or his company’s financial stability, do not invest.
5. If the promoter discourages you from talking to your financial adviser, CPA or attorney because of the secretive nature of the investment, be suspicious. This is usually an indication the investment is not sound.
6. If the promoter tells you the investment will make you rich, enabling you to give money to churches and ministries for spreading the Gospel and winning the world for God, do not invest. In a sense, he is asking you to bribe God to bless the investment.
7. If the promoter does not provide you with verifiable references from previous investors, do not invest.
8. When the promised rate of return in relationship to the amount of investment is unreasonably high, consider it a warning signal. This type of investment is almost always too good to be true.
9. If the product or marketing plan to be financed by your investment is so complicated you cannot completely understand how your money will be used, and how you will receive the return promised, do not get involved in the investment.
10. When the promoter tries to rush you to invest because the investment opportunity is limited and going fast, do not invest. Always take the time necessary to check out the opportunity.
11. Many promoters employ techniques designed to use your beliefs to their advantage. Beware when:

• The promoter quotes Bible verses as support for the investment.
• The promoter’s lapel is covered with pins from religious organizations implying he supports the same organizations you do.
• The promoter touts his relationship to various Christian organizations, such as his position on the board of a ministry (especially one that teaches a prosperity doctrine), to induce you to make the investment.
• The promoter mentions his strong membership status in a church as an inducement to encourage you to invest (e.g., I am a member of the same kind of church you are and since we are Christian brothers you should help me and help yourself by investing with me).
• 5. The promoter informs you that you are one of the “select few” being offered this investment opportunity. If the promoter is legitimate, he will offer the investment to any qualified investor.

Spiritual considerations are not inappropriate when making investment decisions. We believe in asking for God’s help. However, it is not right for Christians to be deceived by promoters who clothe bad investments in “religious” garments.

It is good for a person to support a ministry, and there is nothing wrong with wearing lapel pins. It is good that a person is a strong member of a church, and commendable that a person shares money he has made from an investment with the church to further the Gospel. But your decision to make an investment based only on these criteria instead of the economic criteria can be an expensive, even bankrupting mistake. Most wealth comes from hard work. Remember, a farmer cannot harvest a crop unless he has labored to plant the grain.

Do not expect more than an honest return for an honest investment dollar. If a potential investment sounds too good to be true and is being promoted primarily with noneconomic considerations, get away from the promoter as quickly as possible. Be content with investments providing a legitimate and reasonable rate of return. Safe investments seldom offer exorbitant rates of return.

This article is designed to provide accurate and authoritative information in regard to the subject matter covered. It is shared with the understanding that neither the author nor Tony Cooke Ministries is engaged in rendering legal, accounting, psychological, medical or other professional services. Laws and regulations are continually changing, and can vary according to location and time. No representation is made that the information herein is applicable for all locations and times. If legal advice or other expert assistance is required, the services of a competent professional person should be sought.