California man used Mormon leadership position in investment fraud scheme, SEC says


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  • Herbert Gravy Salinas, CA
    June 26, 2015 9:03 a.m.

    Anyone have the breakdown by religious preference of Bernie Madoff's victims? Just wondering.

  • One opinion west jordan, UT
    June 26, 2015 8:49 a.m.

    I have been LDS for many, many years. I've always made it a rule that if anyone uses their membership or church position as a reason I should trust them, I immediately avoid that person in any kind of business or financial involvement. Also, I avoid anyone that promotes "get rich" schemes with little labor or work. We have been taught that we need to get an education, live within our income, avoid debt and if we haven't to work steadily to get out of debt, and save a portion of our income for a rainy day. LDS members have been given so many words of wisdom to help them avoid ruining their lives and would be wise to listen to the right sources to guide their lives. Greed has never been a solution to take care of ourselves.

  • Herbert Gravy Salinas, CA
    June 26, 2015 8:22 a.m.

    Another example of a "cheat" in sheep's clothing.

  • John Pack Lambert of Michigan Ypsilanti, MI
    Jan. 6, 2012 12:11 p.m.

    It would be helpful if the article explained what this man's "postion of authority" was. Currently we have no real information.

  • terra nova Park City, UT
    Jan. 5, 2012 4:24 p.m.

    1.) This issue is not an "LDS-only" problem. Any fraternal organization can be used to further half-baked money-making schemes.

    2.) It is exceptionally lazy thinking to say "Never do business with a Mormon." May as well say, "Never do business with a Jew." Or, "Never do business with Mexicans, or Asians or (insert any group you harbor prejudice about in this spot)."

    3.) Problem is: We believe we DESERVE huge returns. The delusion is not limited to those "investing" in Ponzi schemes. It extends all who, through deft dealing, take much more than they need in any transaction. CEO stock option packages pay millions (Buffet has railed against them for years) are they worth it? Are any of us really THAT deserving? Hugh Nibley wrote about visiting a redwood forest that wasn't there (his grandfather had bought it, sold it for railroad ties, and lived well for a few years). It took a thousand years to grow it. His grandfather destroyed it in weeks. It was legal, but sick.

    4.) They say "you can buy anything in this world for money."

    5.) But, can Zion be successfully built on the economics of Babylon? No, it cannot.

  • Max Charlotte, NC
    Jan. 4, 2012 9:38 p.m.

    Didn't anybody read the story (or even the headline?) This happened in California.

  • parrothead orem, ut
    Jan. 4, 2012 6:03 p.m.

    Can't believe this happened here :} Some Mormons will walk west till their hat floats if "some" Mormons tell them to !

    Jan. 4, 2012 5:06 p.m.

    When we moved to Utah from another state, the common advice given to me was "When a person tells you he is a good Mormon, hang on to your wallet".

  • trekker Salt Lake, UT
    Jan. 4, 2012 3:47 p.m.

    if someone has to bring up a common religion between you for do something for them run the other way! just because someone says they are LDS or any other religion for that matter does not mean they are trust worthy there are bad people in every group! or wear their church on their sleeve.

  • Pete in Texas Copperas Cove, TX
    Jan. 4, 2012 12:00 p.m.

    Two quick thoughts here:

    First, I don't have any problem doing business with Mormons. I think generally they're honest folks and forthright people.

    That brings up my next point: the minute someone comes up to me with any kind of business venture at all and says, "Hey, you can trust me. I'm a Mormon/bishop/stake president/any other calling in the LDS church, I wouldn't trust them. I have family members who have been scammed by people like this. It's sickening and sad that they'd be so dishonest in their business dealings and try to get folks involved in something based on their membership in the LDS church. However, if someone gets involved based solely on that reasoning, I think they've got a hard dose of reality headed their way and a big "I told you so" coming their way.

    I've heard it said, "The Lord is my Shepherd, not my stock broker", and I think that's a safe motto to live by.

  • owlmaster2 Kaysville, UT
    Jan. 4, 2012 11:44 a.m.

    The guy that got me was my wife's home teacher.. I trusted him so I dove in.

    Very costly mistake.

  • BobP Port Alice, B.C.
    Jan. 4, 2012 11:34 a.m.

    Quite a number of years ago there was an an editorial in the Church News. One line of that editorial was: "When someone asks you to pray about a scheme, keep your hands on your wallet while your eyes a closed."

  • JCH San Diego, CA
    Jan. 4, 2012 11:12 a.m.

    Is there something about the Prosperity Gospel that compels this sort of behavior? Is it not difficult to see Quorum apostles -- who are invariably very well-off, materially -- or people like that cretin Osteen, and wonder, "When do I get mine?"

    When is the return to austerity and humility? Still waiting...

  • Ernest T. Bass Bountiful, UT
    Jan. 4, 2012 11:02 a.m.

    We need more republicans so we can end government regulation in business. This type of business could grow exponentially if only the government would stay out.

  • casual observer Salt Lake City, UT
    Jan. 4, 2012 10:43 a.m.

    I'm hopeful they will get adjoining cells.

  • Ponch# OGDEN, UT
    Jan. 4, 2012 8:21 a.m.

    Open an ETRADE, Ameritrade, (etc.) account.........buy stock......sell stock.

    What's so hard about that?

  • CTguy30 Colchester, CT
    Jan. 4, 2012 7:29 a.m.

    I like to reiterate what others have commented:
    Any time any fellow member approaches me about ANY sort of "business" while I am at church to worship God is a HUGE RED FLAG for me.
    Osgrath: You hit it right on the money (no pun intended)...if you have to state your current or past positions of authority in the church to have a "business-like" discussion...HUGE RED FLAG! Too many men in the church (happens in ALL churches, denominations, etc) throw their calling titles around as if it were an entitlement.
    I'd suggest any person trying to involve anyone in your congregation into your "business" investment by using your standing in the church, read Doctrine and Covenants 121: 36-37...AGAIN, and just think about it.

  • Keith43 Springville, UT
    Jan. 4, 2012 7:27 a.m.

    The fact that this scheme has been going on for five years, causes me to question how these members were getting through their temple recommend interviews? Also, callings for members to serve, are supposed to come as a result of revelation. Others in the ward, including at the stake level,had to know about this business venture. Didn't anyone, simply out of common sense, question it? Some times, i think we members are in a deep sleep, and are content with it.

  • Midwest Mom Soldiers Grove, WI
    Jan. 4, 2012 7:18 a.m.

    If only people would also recognize the similarity between this situation and those who seek political power by using their religious credentials.

  • Max Charlotte, NC
    Jan. 4, 2012 6:02 a.m.

    This stuff just drives me crazy. People of faith do NOT trade on their religion. Their faith means to much to them. This means that anybody who uses religion (or their position in their religion) to gain confidence has revealed themselves not to be a person of faith after all. It really is that simple. Run the other way. This is true of investments scams, Business opportunity scams (i.e. multi-level marketing) or any other "opportunity" to make unusual amounts of money.

    Also, if people understood the relationship between risk and return, they would not be taken in so easily. Extreme rates of return means it is either highly risky or a scam. So sad that so many are taken in by these wolves in sheep's clothing. If found guilty, I hope the law is very harsh with them and that the LDS church is very harsh as well.

  • Osgrath Provo, UT
    Jan. 3, 2012 10:57 p.m.

    Gullible and child-like are not the same thing, Chris. Jesus warned be "therefore wise as serpents, and charmless as doves" in the book of Matthew. We need to live in faith, but Joseph Smith made it pretty clear that true faith stems from the inspiration of the Spirit, not from naive belief (Lectures on Faith).

    As a commercial loan officer in downtown Salt Lake years ago, my policy was that as soon as a business person applying for a loan started talking about his position in the Church, he was not going to get a loan from me. Nothing wrong with membership in the Church, but talking about one's callings as justification for a loan automatically set an alarm off in my mind. People could talk about being members of the Church without repercussions, but talking about one's positions and callings was suspicious.

  • christoph Brigham City, UT
    Jan. 3, 2012 8:57 p.m.

    The Prophet in 1837 lost money in a recession with a bad bank.....nothing wrong or illegal with going out of business; businesses come and go. If we stop being gullible, we may also lose our love for humanity and our belief in prayer. We are admonished to be child-like.

  • don17 Temecula, CA
    Jan. 3, 2012 8:36 p.m.

    Look business is simple. Never do business with family and friends! Never! Never expect to earn more than market rate. If you do great, if not then your not disappointed. Never invest in something you know nothing or little about. If you don't have a degree, experience or practical knowledge of an area then don't do it! Never! Remember most of us are not as smart as we think we are! Just ask your wife, husband, life partner or your mother! If you had to ask your dad you probably got your rear kicked!
    Always sign a contract, never worry about the taste of pie in the sky(it has no taste).
    Never do business at church. Boy oh boy didn't the money changers get chased out of the Temple? Learned that one when I was young.
    Lastly, not only Mormons deal with these issues! You just don't hear about the other groups that are across the country. Deal in regulated industries, trade groups, and markets!
    If you think your stuck in something like this clean out your account. Demand your money back and get off this article!

  • The_Kaiser Holladay, UT
    Jan. 3, 2012 6:03 p.m.

    When will we learn? If a member of the church uses his standing in the church for business marketing, run. Run as fast as you can.

    We Mormons could be a bit wiser. Too bad we fall for this too often.

  • TheWalker Saratoga Springs, UT
    Jan. 3, 2012 6:01 p.m.

    I served a mission in the Philippines and I met a bishop who was previously inactive for a number of years after being bilked out of his life savings by a member of the Stake High Council, shortly after being baptized. He didn't leave the Church for that reason, however. He left when the Church wouldn't release this man's address so he (along with other members) could seek retribution in court.

    Ten years after the incident he finally returned to activity and, in a stake conference, this same con artist was being sustained to a position in the stake. He objected, and the calling was rescinded. He never did get his investment back though, and he was unaware of any official action by the Church against this man.

  • So. Cal Reader San Diego, CA
    Jan. 3, 2012 5:38 p.m.

    My word! How often over the last 40-50 years have the church leaders reminded and reminded church members to avoid "get rich quick schemes" like the plague. As much as I'm ashamed of the listed defendants in this case, not too much sympathy for the individuals who got caught up and lost money in this scheme.

    RE: California Steve "My rule has always been never do financial business with a Mormon and I'm a Mormon. It has served me well over the years. Too many hurt feelings to be had that can get in the way of church work and callings."

    I very wise practice that I follow as well!

  • Rational Salt Lake City, UT
    Jan. 3, 2012 5:14 p.m.

    Did ever a financial wolf NOT dress in sheep's clothing?

  • idablu Idaho Falls, ID
    Jan. 3, 2012 5:08 p.m.

    Here in Idaho Falls we had the same thing. a guy used his position in the Ward--EQ Pres--to scam $60 million in a ponzi scheme. almost all the victims were LDS, even his own in-laws. I agree gullibility is part of it, but I'm sad to say, greed to the promise of 25% returns sucked many people in also. This type of thing is just all-around, so very, very sad.

  • Kiyo Washougal, Washington
    Jan. 3, 2012 5:06 p.m.

    ...The SEC focuses on these small operators and let's Bernie Madoff lose 80 billions of dollars in a classic ponzi...What's wrong with this picture?

  • podunk utah DRAPER, UT
    Jan. 3, 2012 5:01 p.m.

    Utah, Mormon, Ponzi Scheme, Church Leader.... same old story.. over and over and over

    Do not be so clueless....If it sounds too good to be true, it generally is

    wake up folks

  • Kim Cedar Park, Texas
    Jan. 3, 2012 3:54 p.m.

    So sad. From the age of those involved, it looks like a new generation of ponzi schemers are getting caught. These types of frauds seem to crop up every so many years or so when memories of the last schemes start to fade. This has been going on generation after generation in Utah and in the Church. Unfortunately each generation must learn the lesson the hard way. Somehow I wish we could break the cycle.

  • JohnJacobJingleHeimerSchmidt Beverly Hills, CA
    Jan. 3, 2012 3:17 p.m.

    I am LDS and I never do any investing business with anyone in my church. I never did before I joined the LDS Church. I don't do business with people at church, period.

    The largest ponzi scheme was by Madoff and started with people close to him and people in his church. It is not religion specific but religion is a vehicle because it is familiarity and trust built in.

    I love being LDS and my fellow church members but I will always excuse myself from anyone pushing financial arrives at church on the Sabbath. That should be a red flag even before they promise too good of returns.

  • Eliot Santaquin, UT
    Jan. 3, 2012 2:51 p.m.

    "It never ceases to amaze me how gullibe some of our church members are . . . "
    President Harold B. Lee in the General Priesthood Meeting April 1970.

    Now President Lee was speaking particularly about those who spread sensational stories and rumors but he might as well have been talking about those who are taken in by scammers and conmen who use their church position to create trust. We are a gullible people and I suppose we always will be.

  • rogerdpack2 Orem, UT
    Jan. 3, 2012 2:20 p.m.

    boo on dishonest people.

  • CRM Tempe, AZ
    Jan. 3, 2012 2:04 p.m.

    "Many are called but few are chosen". Gee, I wonder why. What a great prophetic revelation!

  • XelaDave Salem, UT
    Jan. 3, 2012 1:54 p.m.

    The interesting thing here is someone called these "men" to these positions and kept calling them- I certainly hope they are a little introspective as well- these "men" were passing interview after interview and as such were continually being given the all is well signal from which they could interact with others- perhaps a little thought on that one matters as well since this is not the first time things like this have happened and I doubt it is the only current instance of this behavior as well- callings matter to LDS people- they pay attention and assume often wrongly that is someone has a calling they must be a good person- would not want it the other way around but it does say be careful when issuing a calling

  • sorrytowakeyou Heber City, UT
    Jan. 3, 2012 1:43 p.m.

    I sure hope there's a warm place in hell for these types. The LDS church should publicly announce their excommunication from the church.

  • juni4ling Somewhere in Colorado, CO
    Jan. 3, 2012 1:35 p.m.

    Oh, I re-read the article... He was a Ward Mission Leader, and a High-Councilor...

    Oops... I missed it the first time...

    This reminds me of the time when I was on my mission in Australia. I loved my mission, it was an awesome experience, and I learned a lot while I was out...

    We were teaching a woman, and she was progressing towards joining the Church...

    We had met her from tracting, and were having some difficulty with involving Ward members in her conversion.

    We were initally happy one night when we arrived at her house unannnounced just to check-in with "our" investigator, to see a member and his wife visiting her. Then I saw the flip-charts, pamphlets, and diagrams.

    My heart sank when I saw what they were presenting. I was a tough young man, but I about started crying.

    When I saw what they were doing, I reacted negatively, but gentlemanly, and the members gathered their things, and quietly left.

    Our investigator had a bad taste in her mouth, and eventually asked that no one from our church visit her again.

    She thought they had come to welcome her, but instead tried scamming her...

  • FDRfan safety dictates, ID
    Jan. 3, 2012 1:32 p.m.

    I remember reading a WSJ article about LDS being prime candidates for these kinds of schemes because of their willingness to believe in the goodness of man. That was a decades ago and it just continues. Could the cause just be greed? Are the root causes also manifested in multilevel marketing schemes?

  • juni4ling Somewhere in Colorado, CO
    Jan. 3, 2012 1:24 p.m.

    So, what was the specific position in the LDS Church the thug used?

    Was he a Bishop or Stake President?

    Sunday School teacher?

    The truth is, in relation to these stories, a fool and his money are soon parted... And if it sounds too good to be true, it is.

    Don't give people money based on promises that make absolutely no sense...

    If a family member or friend needs money, I give it to them as a gift. Or I don't give it to them...

    And when I lived in Utah, I would hear about investment opportunities... My rule of thumb was that if it took longer than 15 seconds for someone to tell me how a business opportunity worked, I figured that they were trying to rip me off...

    I figured that if they needed to draw a diagram to exlpain how their "opportunity" worked, and they couldn't just tell me flat-out, I figured they were lying to me...

    Remember this when you are in Utah, or dealing with another member of the LDS Church, or anyone for that matter: If they start drawing stuff as they explain their "opportunity", they are trying to rip you off...

  • praxis Salt Lake City, UT
    Jan. 3, 2012 1:22 p.m.

    "Investors were promised extraordinary rates of return â up to 200 percent â in a very short amount of time, the complaint says."

    G-R-E-E-D, that is what drove Nelson, Wilcox, Thoennes and all of the investors. Everyone involved will get what they deserve. In the end, greed will get you every time.

  • California Steve Hanford, CA
    Jan. 3, 2012 1:21 p.m.

    My rule has always been never do financial business with a Mormon and I'm a Mormon. It has served me well over the years. Too many hurt feelings to be had that can get in the way of church work and callings.