Affinity Fraud: Fleecing The Flock

Affinity: a natural attraction, liking, or feeling of kinship.

Affinity fraud: a fancy name for ripping off fellow members of one’s own club, association, or religious, racial, ethnic, or social community.

Several days ago, a former Mormon bishop was indicted by a federal grand jury in Connecticut. He allegedly ran a Ponzi scheme in which he defrauded fellow church members. According to the charges, he told investors that he was an experienced and successful commodities investor and would invest their money in safe, long-term commodities futures contracts. But he then used the money to pay off earlier investors, build a waterfront home, and repay personal bank loans.

Almost any kind of alliance or association can have among its members a predator who seeks to misuse his or her affinity with fellow members. Here in Ohio, for instance, we’ve recently seen affinity fraud in the form of Ponzi schemes victimizing Orthodox Jews, the Amish community, and the congregation of a Cincinnati church. Upon being betrayed by one of their own, most victims of affinity fraud are so shaken that they say they’ll never be able to trust anyone again.

Use common sense. The fact that you and an acquaintance share the same hobby, spiritual belief, skin color, or nation of origin does not make it any less likely that the acquaintance is a thief or a nincompoop. Never trust someone with your money solely because he or she shares some special kinship with you. After all, we’ve had clients who were ripped off by immediate family members. If someone can be betrayed by a blood relative, you’d better believe you can be victimized by your former minister, your fellow Mason, or a colleague at the country club.