walkitout (walkitout) wrote,
walkitout
walkitout

Mormon Investment Fraud

This showed up in the New York Times:

http://www.nytimes.com/2011/05/27/us/27ponzi.html

It describes Daren Palmer of Idaho Falls, member of the LDS church.

"This week, Mr. Palmer, 42, agreed to plead guilty to federal criminal charges that he ran a $78 million Ponzi scheme, a rural Western version of the kind of fraud Bernard L. Madoff operated in New York. He faces up to 30 years in prison, though he is expected to receive far less."

Readers of Jon Krakauer's _Under the Banner of Heaven_ know that investment schemes put together by members of the LDS church and marketed primarily to other members of the LDS church are poor risks. In part, they are poor risks because members of the LDS church think like this:

"“A lot of people who invested are active members of the L.D.S. church,” said Wayne Klein, a court-appointed receiver working to settle claims. “They knew that Palmer was, and that gave them comfort.” "

And that makes a person a Mark.

Val Southwick's scheme, VesCor, was a lot larger, but operated in roughly the same way.

Shawn Richard Merriman was smaller.

If you were interested in an endless stream of information about similar schemes, you could check in here periodically:

http://utahsecuritiesfraud.com/

But the takeaway is very, very simple and surprisingly, something my parents reiterated many, many times: don't do business with people in your family or your church. It's another indication of the cognitive adjustment necessary to continue to believe in End Times prophecy when it has repeatedly proved false. After all, the JWs argue that God's Holy Spirit helps keep the Bad People Out of the organization, so at least in theory, it would be better to do business with members of one's faith community. But in practice, my parents knew where the money disappeared and were smart enough to stop sending more after it.

Not smart enough to leave the church, tho.

ETA:

Lying works.

http://utahsecuritiesfraud.com/2011/03/18/lessons-to-be-learned-from-jeffrey-mowen/

Wow. Promising 33% return a month got him $41 million in a "relatively short time". I guess if you pick an audience that believes the story Smith told, 33% return a month shouldn't be that much of a stretch.

ETAYA: h/t to the blogger referenced above.

http://www.lvrj.com/opinion/thieves-in-the-temple-102725259.html

"Although so-called affinity crimes occur in all faiths, law enforcement sources agree con artists have been especially effective in exploiting trusting members of the Mormon faith in Utah, with its heavy focus on family connections, social-religious activities, and generations of community stability."

That article is really worth reading. I was somewhat disappointed that the NYT article mentioned at the top of this post barely mentioned the huge issue that this kind of fraud is for LDS.
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