GREATER MINISTRIES INTERNATIONAL FOUNDER GERALD PAYNE SENTENCED TO 27 YEARS

State Regulators Find Some Religious Groups Preying On Investors

 

Gerald Payne, founder of Greater Ministries International, received a 27-year sentence on Monday for securities fraud and conspiracy charges in U.S. District Court in Tampa.  Payne had been convicted on securities fraud and conspiracy charges.  His wife, Betty Payne, received a sentence of 12 years and seven months on the same charges.  Three other Greater Ministries officials will be sentenced later this month.

Judge James Whitemore labeled the Greater Ministries investment program “absolutely despicable.”

“We are extremely pleased with the just sentences handed down in this case.  Our actions should send a strong message that we will vigorously protect Ohio investors,” said Governor Bob Taft.

Greater Ministries took in $490 million from 19,000 investors worldwide before the Ohio Division of Securities and the Alabama Securities Commission sought and received a permanent injunction in 1999 from the Tampa federal court.  Through the injunction, the court ordered Greater Ministries to cease their operations and investment programs, including the “Faith Promises” program that promised returns of 100% within 13 months. 

More than 700 Ohioans, who invested more than $14 million, were among those who were persuaded by church leaders to mortgage their homes, run up large credit card debts or cash in retirement funds to invest in Greater Ministries.  Church leaders promised that investors would double their money through divinely inspired investments in the foreign currency market and in gold, silver and diamond mines in Africa and the Caribbean.

Following Payne’s sentencing, the North American Securities Administrators Association held a news conference in Washington, D.C. on Tuesday to warn investors to beware of increasingly sophisticated religious-based investment schemes.  In addition to Ohio, 26 other states have taken actions against hundreds of companies and individuals that used religious or spiritual beliefs to gain the trust of investors before swindling many of them our of their life savings. 

”When you invest, you shouldn’t let your guard down merely because someone is appealing to your religion or your faith,” said Ohio Securities Commissioner Debbie Dye Joyce.  “Always do your homework.  Be as skeptical and careful when you invest with someone who shares your faith as you would be with anyone else.”

In another Ohio securities case, the Division of Securities has referred a criminal case against former Methodist minister D. Gerald Lach.  Lach has been indicted on 59  counts of securities fraud and is awaiting trial in Clermont County Common Pleas Court.  In addition, the Division of Securities sought and received a preliminary injunction in June, 2000 in Clermont County Common Pleas Court.   The court ordered Lach to stop selling investments in several entities he operated.  In addition, Cincinnati attorney Robert F. Brown was appointed receiver to take control of the assets of Lach and related entities. 

State securities regulators say con artists who use religion to promote their scams often:

 

• Predict imminent financial or social crisis
• Claim they will reinvest a portion of the profits in a worthy cause
• Equate faith in their scam to religious faith

To protect yourself against such scams, Commissioner Dye Joyce recommended that prospective investors follow three steps:

First, investors should be on their guard for investment promoters who claim to have special ties to, or endorsements from, a faith or congregation.

Second, don’t accept the promoter’s word.  Check to see if the salesperson is licensed to sell securities in Ohio and if the security is registered by calling the Ohio Department of Commerce’s Investor Protection Hotline at (800) 788-1194. 

Third, if you suspect that you have been defrauded, call the Hotline immediately.

An Investor Alert titled “Preying On The Faithful” is available from the Ohio Division of Securities.  The alert provides common sense precautions that consumers can take before investing in a solicitation being targeted to members of religious organizations.  It is available at the Division’s web site at http://www.securities.state.oh.us/ or by calling the Division at (800) 788-1194 or (614) 644-7381. 

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The Division of Securities promotes an honest and fair securities market where individuals and businesses can raise capital and investors can expect a fair return on their investment.  Other Commerce divisions enforce regulations regarding industrial compliance, financial institutions, real estate, liquor, and unclaimed funds, among others.  The department’s internet address is www.state.oh.us/commerce