[Jehovah's Witness] Church elder ordered to repay $4.7 million to fleeced flock

A church elder was ordered by a federal judge on Tuesday to pay more than $4.7 million in restitution to almost 50 victims of a Ponzi-like con game – many of them elderly members of his own congregation.

Financial consultant and ex-missionary Raymond L. Knowles, a former resident of Pembroke Pines and Opa-locka and more recently San Antonio, Texas, was sentenced to 57 months in federal prison in January by U.S. District Judge Donald L. Graham for defrauding elderly and financially unsophisticated investors during a multimillion-dollar securities fraud scheme. He was convicted last October of 16 counts of mail fraud, four of wire fraud and four of securities fraud.

Many victims were fellow members of the same Jehovah's Witnesses congregation where he was an elder.

According to a statement by South Florida U.S. Attorney Marcos Daniel Jimenez, Knowles used his position as an elder to sell millions of dollars worth of risky promissory notes to worshipers, falsely representing that the investments would return between 8.5 percent and 20 percent. He also was accused of diverting investor funds to lease luxury cars, pay personal, business and other expenses including trips to South Africa and Disney World near Orlando.

A Ponzi scheme is named after Charles Ponzi, an immigrant who ran such a scheme in 1919-1920. It involves an investment scheme in which returns are paid to earlier investors, entirely out of money paid into the scheme by newer investors.

Copyright © 2003, South Florida Sun-Sentinel

Source: South Florida Sun-Sentinel

Another Elders & Fraud story: Jehovah's Witness elders sentenced to 15 years for $6 million theft Two Jehovah's Witness elders who fleeced a 100-year-old Deer Lodge woman out of her life savings and family ranch were sentenced to 25 years in prison with 10 suspended. (added 05/13/2003)

-------------------------------------------------------------------------------

Scams and the Latter-day Saints

Rick Branch

Arlington, TX

For years, Utah, which has a population of over 70 percent Mormon, has fought against the stigma of being called the Scam Capital of America.

In 1984, Ken Thornberg, Director of the Better Business Bureau office in Idaho, said he believed that, "...a majority of the nation's illegal investment scams originate in Utah.

"`I would say - and I am not exaggerating - that 75 percent of the country's major investment schemes are hatched in the Salt Lake City-Provo area,'" (Ogden Standard-Examiner, 26 March 1984, p. 10A).

Whether the statistics are completely accurate or not, Thornberg is not alone in his assessment that the "majority" of the scams and fraudulent organizations are created in Utah.

"As early as 1969 the Wall Street Journal called Salt Lake City `a locus for shell operations.'

"Then in 1974 the infamous `stock fraud capital' moniker was awarded Salt Lake City in a page one Wall Street Journal article on February 25, 1974. The headline: `Dubious Distinction; Salt Lake City Gains Reputation for Being a Stock Fraud Center,'" (Utah Holiday, October 1990, p. 26).

This downward trend continued to be noticed and ten years later in 1984, Newsweek magazine wrote, "Utah, the land of the Mormons, has earned itself another name: the Stock-Fraud Capital of the Nation," (Ibid, p. 27).

With such national notoriety, people in Utah must have known the con artists were working their area.

Thus, the question begs to be asked, what is the cause of such a phenomenon?

Perhaps the February 6, 1984 issue of Business Week provides an insight into the problem.

"Many (LDS) church members are likely to accept without question an investment recommendation made by another Mormon. Hucksters try to exploit this tendency by trying to bring church officials into investor groups or by portraying themselves as good church-going Mormons," (Utah Holiday, October 1990, p. 27).

In a United Press International article, this rationale was again reiterated.

The UPI said, "Major reasons for the success of scams in Utah are the highly organized, tightly knit structure and trust-oriented doctrines of the Mormon Church," (Ibid).

Apparently realizing the problem, in 1984 Utah's "Governor Scott Matheson appointed a new Securities Task Force, including (Hugh) Pinnock, in part to confront what experts were calling a `Mormon connection' to many of the schemes," (Ibid).

Hugh Pinnock had been a member of the Mormon Church's General Authorities since 1977 when he was appointed to the First Quorum of the Seventy.

According to the March 11, 1985 Forbes magazine interview with Pinnock, "...Utahans were now wiser to swindlers. `They just aren't as unsophisticated as they once were," (Ibid).

However, it would be this same Hugh Pinnock that would feel the sting of a con artist a few years later, at the hands of the infamous Mark Hofmann.

Pinnock would help Hofmann secure a $185,000 "...signature loan at the bank where Pinnock was a director - a loan to buy documents that did not even exist," (Ibid).

In 1986, the San Diego Union provided further information on the scam game.

No longer was the media simply reporting about Utah being the Fraud Capital of America. Now, it was Mormons taking advantage of Mormons.

"In recent years, Utah has been called the fraud capital of the United States, and many defendants in fraud cases have been Mormon officials who used church connections to victimize other members," (5 October 1986, p. A-25).

The problem increased to the point where the Ogden, Utah paper reported: "The cultural emphasis in the Mormon Church that equates financial success with spiritual success, and an unquestioning allegiance to authority figures, may partly explain why 10,000 Utah investors have been swindled out of more than $200 million during the past decade," (Ogden Standard-Examiner, 26 August 1989, p. 3C).

Not only did the scam artist attract the favor of the LDS families, he elderly, the uneducated and the General Authorities, they also conned the fraud watcher himself.

"Washington, D.C.-based columnist Jack Anderson, A Utah Mormon, admits that he foolishly sent off $12,000 after hearing of [what turned out to be a Utah-based scam] from a friend back in Salt Lake," (Forbes 20 June 1983, p. 33).

The problem seems to be twofold.

First, because of the tight-knit LDS social structure, con artists prey and breed in this atmosphere.

Second, because of the willingness of Mormons to follow blindly an authoritarian structure, con artists are able to use this to their advantage.

The solution to the problem is one that is applicable not only to Latter-day Saints, but also to anyone considering an investment.

As Forbes magazine explains, "Never take people solely at face value, and don't invest your money without checking carefully first," (Ibid, p. 34).

<p><hr><p> Subject: Re: add jehovah witnesses and mormons to the list
From: Zinj <zinjifar@yahoo.com>
Date: Fri, 15 Oct 2004 21:24:47 -0700

In article <41757c54.36583861@news2.lightlink.com>, hkhenson@rogers.com=20 says... > On Fri, 15 Oct 2004 16:03:50 -0500, "William Kimbler"
> <w.kimbler@comcast.net> wrote:
>=20
> >Scientologists are NOT the only money scammers
> >
> >[Jehovah's Witness] Church elder ordered to
> >repay $4.7 million to fleeced flock
>=20
> All in good time. The net is getting better at this. I think we
> might have picked the hardest one first.
>=20
> Keith Henson

More likely, the 'hardest' one, the one we'll have to deal with after=20 the 'Church' of Scientology collapses, has *itself* taken a lesson from=20 Hubbardian 'application' and is more careful about wearing 'Kick Me'=20 signs deliberately.

It's amazing how similar the 'Church' of Scientology is to Synanon for=20 example; despite the fact that the 'Church' is actually far 'larger'=20 (even in its microscopicy).

Synanon however was a somewhat 'more blatant' Scientology, and therefore=20 less survivable. I strongly recommend 'The Light on Synanon', by Dave=20 and Cathy Mitchell and Richard Ofshe, who based at a tiny village=20 newspaper were instrumental (and Pulitzer Prize winning) in courageously=20 exposing a cult that was only slightly less circumspect than the=20 'Church' of Scientology.

http://www.ptreyeslight.com/lightonsynanon.html

Of course, and to give Satan his due; it's the desire to 'conquer the=20 world' or 'Clear the Planet' that exposes wacky cults to 'outside'=20 interest before they get on the electric Kool-ade (or Flavor Ade) train.

To be honest, there are probably many 'worse' groups than the 'Church'=20 of Scientology in the world, as far as 'internal abuse' goes; but as=20 long as they don't try to 'control' the *outside*, they will not come in=20 for the wide exposure that Scientology has pulled in.

Even the Moonies, dangerous as they are in their infiltration of the=20 body politic and society as a whole have taken a lesson from the Church=20 of Hubbard Triumphant and pointedly avoided attempting to control the=20 'outside' world by means other than bribery.

Blackmail and extortion almost *always* come back to kill the author;=20 and Scientology=AE serves as a warning example to the coming generation of= =20 repulsive spirits of spiritual sedition.

Zinj --=20 You can lead a Clam to Reason, but you Can't Make him Think

Go Back