Affinity Fraud


Affinity frauds have been perpetrated against every group imaginable.  Con men peddling phony high-yield investments targeted churchgoers in the rural Midwest, even going so far as to give their funds biblical names such as the Jubilee Trust fund.  Identifying themselves as born-again Christians, the men told potential investors that it was their religious duty to invest in the funds and recruited other church members to solicit on their behalf.  They managed to raise $7.4 million dollars from the faithful.

The notorious “miracle cars” scam was another aimed at churchgoers.  The original perpetrators told a congregation in California that several cars were being made available at low cost from the estate of a deceased millionaire.  For a mere $1000, parishioners could purchase a low-mileage, late-model car.  The only hitch?  Delivery would be delayed while the millionaire’s will was processed in probate court.  The vehicles came to be known as the “miracle cars” and word spread like wildfire from church to church across the country.  A total of $20 million was collected for non-existent cars.  Along the way, antsy buyers who asked for refunds were reimbursed using money collected from other victims – the classic Ponzi scheme.  

Pyramid and Ponzi schemes flourish in religious populations, where people are presumed to possess a certain standard of morality.  Some victims in the miracle car scam were approached by their own pastors or members of their congregation whom they had known and trusted for years.  Certainly, the thinking went, these people would not swindle them.  

But churches are not the only places where affinity frauds exist.  Ethnic groups are also popular with fraudsters.  First-generation immigrants, particularly those who do not speak English as a first language, are particularly susceptible to affinity fraud.  Senior citizens and retirees are also a common target.  

Affinity can also be established and abused among co-workers.  A Connecticut man told co-workers that he would be able to obtain tickets to the 2005 SuperBowl in Florida.  Nineteen people paid out $150 per ticket and flew down to Florida, only to find that they had been duped.  An Indiana factory worker bilked his co-workers of $160,000, which he claimed to be using to buy shares in companies that turned out to be fictional. 

“For of all hard things to bear and grin,
The hardest is knowing you’re taken in.”
PHOEBE CARY

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