Millions of dollars lost to con artists
ABBOTSFORD, BC—Three years into a government-funded program of alerting churches about people who attach themselves to congregations just to steal their money, hospital chaplain John Haycock believes the message is beginning to make a difference.
"We stopped a scam at a church here in Abbotsford," he says. "We stopped a person who at that point already scammed almost half a million dollars from that church and close to $5 million from the bigger community."
With a grant from the B.C. Securities Commission, Haycock and Seamus Mackrell, a fellow chaplain at a hospital in nearby Chilliwack, tour churches with a multimedia presentation on how to avoid becoming victims of what is known as "affinity fraud."
Commission spokesman Andrew Poon calls it "fraud among friends."
"Often what [affinity fraudsters] do," he says, "is pitch an investment scheme to some of the higher profile members in the group, convince them…this is something you can 'legitimately' gain a return on, and then use the fact that they have high-profile members involved to sway other members in the community."
Haycock adds they are highly adept at "what language to speak, what words to use…to scam you from your money."
So in a church setting, for example, they can easily con members into thinking they share the same beliefs as a way of building trust.
Yet once trust is gained, the investment pitched and the money changes hands, they disappear, leaving their victims financially ruined. "They've no remorse, they've no guilt—nothing," says Haycock.
Sometimes, the con man may have little direct contact with the church—which is what apparently happened at New Life Church in Kelowna.
In early May, the commission named two of its pastors, Wesley Campbell and Ralph Bromley, and members John DeVries and his son David in a "notice of hearing" on various fraud-related charges. Also named was Dallas, Texas preacher Ernest Grafke.
The commission alleges that in early 2002, John DeVries set up a company called Amber Enterprises to obtain funds from investors who were then invested in IPIC International Inc., an import-export company headed by Gregory Setser of California.
In November 2003, IPIC collapsed. It was revealed it had defrauded investors of $10 million U.S. worldwide, including $2 million U.S. from B.C. investors, some of them members of New Life Church.
Among the allegations leveled by the commission, DeVries and Grafke were said to have claimed "that an investment in Amber was sanctioned by God," and that Campbell and Bromley both purportedly "used their positions as pastors" to solicit investments.
In a statement, the church insisted that these individuals had also been scammed. It also pointed out that every investor had agreed in advance that part of their profits would go "to help children in need."
Lead pastor Kim Unrau says his members "responded very well" when told of the notice of hearing.
"We did some stuff out of James—'Rejoice and count it pure joy when you face testing and trials,'" he says. "They chose to rejoice in the test, even though we don't like it, we don't understand it."
Haycock commends New Life's stated willingness "to support all of our members and [to stand] with them as they walk through these matters."
But he cautions pastors whose churches have been hit by affinity fraud not to overlook the "secondary losses" that can last for decades.
"Are you going to allow people honestly to tell their stories, share the pain of the community?" he asks. "Many of these people would be on the verge of retirement, so…what they dreamed about is gone."
A date for a hearing into the commission's allegations will be set on June 12. It can ban individuals found guilty from the B.C. securities market for life and fine them up to $250,000. Companies can be fined as much as $500,000.
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