Biblical financial principles advisor arrested on federal fraud charges

In an update to a story we've been following for a long while now, the leader of a church-based alleged Ponzi scheme has been arrested. Ephren Taylor was accused of taking $11 million dollars from congregants across the country in various large churches.


Alleged Church Ponzi Schemer Arrested on Federal Fraud Charges – ABC News.






Ephren Taylor, once a financial adviser to congregants from some of the most prominent mega-churches in the country, was arrested today on federal fraud charges.


The Department of Justice announced in a news release that Taylor, 31, was arrested on a federal indictment charging him and his business partner with “defrauding investors across the country of more than $5 million.”


The charges allege that Taylor, the former CEO of City Capital Corporation, and the company’s former COO Wendy Connor “participated in a conspiracy to defraud investors” between April 2009 and October 2010, and allegedly managed to defraud “hundreds” of people nationwide, according to the DOJ.


ABC News aired an investigation into Taylor’s “Building Wealth Tour” aimed at African-American churchgoers. He conducted wealth management seminars and private meetings with interested investors. He targeted some well-known mega-churches like Bishop Eddie Long’s New Birth Missionary Baptist Church in Lithonia, Ga., and Joel Osteen’s Lakewood Church in Texas. People would hand over their life savings presumably trusting a brother in faith. Did the presumed endorsement by their church entice people to give up their life savings in this investment scheme? Was it the church officials who allowed Taylor’s program into their agenda the ones who were duped? Lakewood Church was careful not to endorse Taylor and stopped allowing him to speak on “Biblical financial principles” after it turned into more of an investment pitch, according to the ABC piece.


Taylor had a rags to riches story that resonated with investors. He told them their money was being invested into inner city project. At first, they received checks. As these money-making schemes go, the money paid to the original investor comes from the more recent investors, not from profit on the investment, until it runs out and the pyramid can come crashing down. It’s alleged he spent their money on his own lavish lifestyle.


There are PLENTY of advisors who tout Biblical financial principles as a way to manage your money. This advisor, Gary D. Halbert, alleges that faith-based “affinity fraud” is on the rise. Affinity fraud targets certain demographic groups. As the leaders are members of these groups, there is a sense of implied trust.


While I have no problem with fellow Christians seeking to spread their values to clients, I am wary of the implications of financial advice that is deemed to “come from God.” I have heard from far too many people who told me they were ripped off by investment promoters that touted themselves as being Christians. As noted above, securities regulators consistently list religiously based investment scams as among the most prevalent.


You see, people tend to do business with people they trust. Building trust is one of the basic requirements for having a successful investment advisory or financial planning practice. However sometimes, untrustworthy people advertise themselves as being a member of a certain religion in order to shortcut the trust issue. Clients come to him or her not because of the trust they have in the advisor, but because of their common religious beliefs.


Halbert provides a good bit of sound advice to check out investments before hand.


This is why Taylor’s breach of trust is particularly egregious to the people affected. Not only do they now not trust him, they may lose trust in their church as well.