Quote of note:

A study released by the Federal Trade Commission this year found that among major ethnic and racial groups, only American Indians fall victim to financial fraud more often than blacks.

The study didn't address why this occurred, but fraud experts say African American churches are targeted because many of their members have accumulated savings but have limited experience with putting that money to work.

"Our community is not as educated about investments," said Craig York, an African American investment counselor with Los Angeles-based Operation Hope, a nonprofit organization that provides economic literacy programs in urban areas.

Just how bad the problem has become at black churches is unclear, said James Kohm, a consumer fraud expert for the Federal Trade Commission. But so many North Carolina congregations were targeted recently that state Atty. Gen. Roy Cooper organized a "church scam summit" last summer.

Preying Through the Pulpit
Scam artists are increasingly targeting African American churches, hoping to first hook pastors, authorities say.
By E. Scott Reckard
Times Staff Writer

January 13, 2005

Bishop Edwin J. Derensbourg thought the new parishioner with the Rolls-Royce and flashy clothes would bring a measure of prosperity to his modest United Christian Fellowship church in Palmdale.

The parishioner, Phoebus Vincent Smith, said he wanted to make African Americans like himself rich through savvy investments. Derensbourg didn't know much about investing, but he reasoned that if "Mr. Vince" could help members of his black church prosper, his collection basket would reap dividends.

Derensbourg invited Smith to address the men's group at the church and became the first of about 10 in the congregation to invest. Within six months, the pastor said, his investment had paid back thousands of dollars in cash, and he was driving around in a blue Rolls-Royce, a gift from Mr. Vince.

A few months later, the minister said, the money petered out, Smith became hard to find, and his conscience was gnawed by the belief that he had become an evangelist for a scam.

"He was taking care of me so other people would get into this thing," Derensbourg said.

Law enforcement officials say the rueful bishop has plenty of company these days: Promoters of get-rich-quick scams have increasingly targeted black congregations, often offering help with church finances and lining pastors' pockets as steps toward fleecing the faithful. Some operators have taken to pulpits themselves.

"It's a particularly insidious type of fraud because it goes right to the heart of the trust relationship that people have with each other," said Texas Securities Commissioner Denise Voigt Crawford. "We see it a lot in African American churches."