Troubling New Trend: God Fraud
One of the things that writing a regular piece on fraud news stories allows me to do is to observe trends, patterns and common themes going on in the fraud space.
For those of you who’ve been reading our weekly Fraud News Update Blog, which comes out on Thursdays, you know that we’ve picked up on a troubling new trend: religious thievery (God Fraud). Yes, it’s sad to say that while most people used to think that fraud events at churches were the exception, flock fleecer’s are now the new reality.
The News is Littered With God Fraud Stories
I know this to be true because I’ve been monitoring the news feeds, seen the stories and reported on this troubling new trend. After I started writing the Fraud News Updates every week I quickly picked up on at least one God Fraud story, if not two, each week about those who “prey” upon victims in the pews.
Two weeks ago, I noticed the strange absence of even one God Fraud story involving religious fraudsters and wasn’t quite sure what to make of it. However, before I could figure it out, my faith in this new God Fraud phenomenon was quickly restored when another story about an evil fraudster at Congregation Beth El in La Jolla, California (pronounced “La Hoya”) surfaced.
The individual embezzled, attempted to hide the fraud in fake journal entries for legitimate expenses and then regularly misrepresented the temple’s finances when asked about them.
I’ll probably “rot in hell” for writing this piece as someone likely thinks it blasphemous. Hopefully I won’t since I’m just the fraud professional pointing out that this type of fraud’s happening and Leviticus (19:11) has my back: “Ye shall not steal, neither deal falsely, neither lie one to another.” Since the guy in La Jolla did all three I’m guessing he must have quickly skipped past that part of the book.
Fraud Knows No Bounds
One of the things this troubling God Fraud trend points out is that fraud knows no bounds. Fraud doesn’t discriminate; it occurs in every industry, every type of religion (interdenominational), it’s an “equal opportunity” crime which occurs all around the globe, no matter what we might otherwise want to believe about people and faith. Sadly, “human nature” trumps all. Word!
For many, the church has always been a place to go and seek sanctuary from the evils going on in the world. Given the hideous physical abuses, on unsuspecting victims, going on at some churches, and the plethora of religious fraud and financial crimes in other churches, we can no longer say that.
Churches are a Business
Let’s face it churches are a business like any other kind of business.
While it’s the “business of religion,” churches have cash and receivables as they raise money to support the world’s important causes and help others in need. Parishioners’ pass the offering plate in the pews and give money because their faith drives them to support God’s vital work.
Most people blindly trust that their money is going for the purposes described to them and have faith that people working at churches are inherently good as no one steals. “Thou shalt not steal” is one of the Ten Commandments.
However as we’ve seen from the rash of news stories involving theft from religious organizations, greed is not only a temptation but a powerful enemy which many inside the profession simply cannot refuse.
Internal Controls are Weak…Like the People
Where there’s money there’s fraud. As they say in geometry, “it’s a given.” In looking at the increase in financial crime cases inside religious organizations, there’s a common theme: the troubling lack of internal controls contributes to God Fraud.
I’ve written about internal employee fraud and theft extensively in the past. In one of those pieces, I said that while we want to trust our employee’s, “blind faith” alone doesn’t cut it.
“It is never easy to learn that someone you trusted has violated that trust. It is never easy to learn that someone you relied on to guide and protect an institution’s financial security has instead stolen funds for personal use and then covered up his misdeeds. When the institution is a religious organization, a community held together in part by moral and ethical bonds, such a betrayal is even more painful” (Congregation Beth El President).
Effective fraud prevention requires strong internal controls in addition to an enterprise wide anti-fraud culture. The number and magnitude of religious related embezzlement’s, and financial improprieties, we’ve seen lately, proves that internal controls inside these organizations are either non-existent, incredibly weak, ignored or overridden.
They’ve also proven that robust internal control elements are necessary inside religious organizations just as they are for any other type of business that wants to safeguard their fiscal assets.
The Bottom Line
Churches are a microcosm of society. Society has shown us that employees at businesses (of all types) around the globe steal other people’s money (OPM) for their own benefit.
Contrary to what churches, and their parishioners, might want to believe sadly all these frauds demonstrate that religious organizations aren’t immune to God Fraud.
News Flash: People working inside churches, who’ve betrayed the human faith and fiduciary trust instilled in them, have proven that greed and OPM are as tempting to them as anyone working anywhere else. Hence, the epidemic of God Fraud cases.
Churches: It’s your choice… either change the blind faith, no oversight culture, and “get controls,” OR “get defrauded.” What’s it gonna be?!
Those are our insights…what are yours?