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Scam affects hundreds of JWs


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http://www.elmundo.es/cataluna/2017/03/07/58bea887ca4741194d8b4612.html

(Link in Spanish, sorry, no English newspaper reports this)

 

Four people have been sentenced to jail because they deceived over 1,300 with a pyramidal scheme. Among those ripped off there are several hundreds JWs who in many cases lost all their saving of a whole life.

 

One of the directors, who is now going to jail, took advantage of his position as a congregation elder to promote investment in their company. According to the newspaper, two other of those sentenced are JWs too. What a shame! Not only did they swindle their brothers but they also made Jehovah's name and the congregation appear in the news in a negative light.

 

It's not the first time something like this happens in Spain. Some years ago another huge pyramidal scheme that deceived thousands of people affected hundreds of JWs too, although in that case it had nothing to do with the congregation. Why do these scams work so well among Witnesses? I guess that's because we trust our brothers. If someone from outside offered you an investment in which it's not clear what's being done with the money and with an unbelievable interest rate of 13 percent, anyone with some common sense will immediately dismiss it as a scam. But if the one offering this investment is a fellow brother, or even an elder, you tend to trust them.

 

When the other scam was brought to light some years ago, many brothers who had been promoting it were removed as ministerial servants and elders. Not because they intentionally deceived anyone, actually they were victims too, but because they had lost their freeness of speech. They were speaking from the platform and half of the congregation were thinking "You made me lose all my money".

 

All of this could have been easily avoided if they all had followed the wise advice of the Slave. They have repeatedly told us to keep congregation and business separate. Don't take advantage of our brotherly relations to promote any business. Don't speak of business at the KH. How often we have been warned to be very wary of "get rich quick" schemes. If an investment, even if offered by a elder, sounds too good to be true, it probably is.

 

Edited by carlos
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I hate to say it but sometimes brothers believe they can make a "too good to be true" return on investment because a fellow brother recommends something. Similar things have happened here in the US also. I've spoken to some who believe investing in the Iraqi Dinar currency(a worldly sponsored scheme) will result in some enormous return in the future when the currency is revalued. Probably the truth is the only one who will make money is the people who sell the currency. We need to be cautious and modest on any financial investments.  

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Something similar (on a great scale, millions of dollars involved) happened in my congregation.

MS disfellowshiped and facing court case from some worldly institutions  - he even forged Bank statements etc to deceive etc.

Very sad indeed ... This dying system of things is full of "greedy persons"

Many brothers were victims of his multi-layered schemes that looked so genuine. 

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The FDS has warned us as long as I have been a JW. "Be cautious of your associates, even in the organization."  We are all imperfect  and we, as Jehovah's people, are special targets of Satan. He can only mess with the earthly part of Jehovah's organization, but we are  that target of his.

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The other thing that makes our brothers and sisters 'victims-in-waiting' is the desparate finanical situation many are finding themselves in ... I know Greece and Itally are becoming more and more desparate, not sure about Spain, but this is what makes these scams all the more dispicable, is because our brothers and sisters are fragile and as said above, trusting.

 

It's very important for all of us, in the world whose scene is constantly changing and not for the better, to make Jehovah our prospect for trust and reliance, along with that the BODY of elders, not necessarily individuals elders as well illustrated in the above example.

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A sad situation indeed.  There was a couple in my former congregation (who were recent immigrants from W. Africa)  that I had befriended and initially assisted them with their basic needs since they had small children etc.  Well to make a long story short, after a while this couple had started what had amounted to a pyramid scheme and guess who was first on their list?  After I gave them a good tongue lashing and reminded them of the care I and the congregation had given them, I told them I wanted no part of the scheme and eventually cut ties with them.  Interesting thing is, this was the second time I had been approached by a "brother" to participate in this sort of scheme and I'm glad that I had the wisdom to see the foolishness at the outset.  All in this for the mighty dollar. 

 

Sister Virginia, you are so right about being "cautious with your association, even in the congregation."  Over the years, I've had a "sister" who asked me to co-sign her loan application in order to buy her and her family a house, (she was disfellowshipped one year later), another pioneer sister who asked me to co-sign on a new car and a "brother" who asked me to be a guarantor on a home he was buying for he and his family.  (I politely turned them ALL down and learned a valuable lesson at the same time.)

Edited by Omo_Yeme
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In many cases the brothers promoting those businesses were not properly scammers. They had been deceived too. Only those on top of the pyramid knew it was a fraud. So a lesson is to be careful with investments even if the person who is offering it is a friend or a relative and seems sincere. They may honestly believe they are offering a good product but actually be a scam.

 

A good guideline is: A company has to produce something. If the stress is mainly on making new vendors rather than in selling products or services, then it's most likely a pyramid scheme.

 

Yet another point: My parents had some money to invest and a good friend told them he had his money in the second company I mentioned and they gave an extraordinary interest. He was not selling them anything, it was just a friendly suggestion. My parents invested their money there for one year, received the promised interest, then left. Some months later the company collapsed and thousands lost their investments, including that brother. That is the nature of pyramid schemes: They seem to work for a time and give great revenues, but they inevitably collapse after a time. Since new investors pay the interest of old customers, there comes a point where an almost infinite number of new costumers would be needed to keep the money flowing.

 

So the lesson is that even if a questionable business is apparently working and giving great money, that doesn't guarantee it's safe. As others mentioned above, if it's too good to be true it most probably is a fraud.

 

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23 hours ago, A fellow servant said:

Carlos ,

 

Thanks for sharing.    It just shows us to always be aware of any 'get-rich-quick' schemes whether it be among our spiritual brothers or the world.    Such reproach on Jehovah's name.  

Yes, and it also can reveal the greed, not in the scammers (which is obvious) but those investing as well. I would say a lot of people caught up in those scams are either well-off, or do not need the money being promised. They just tend to have dollar signs in their eyes thinking about what they can buy with the windfall of cash they could get.

 

In fact, in nearly all the cases I've read, most of the investors had tens of thousands of dollars to give. I don't know ANYONE personally or professionally that can write checks worth those amounts. Following Paul's words about being "content" would prevent people from being scammed.

Edited by Bob
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1 hour ago, Bob said:

Yes, and it also can reveal the greed, not in the scammers (which is obvious) but those investing as well. I would say a lot of people caught up in those scams are either well-off, or do not need the money being promised. They just tend to have dollar signs in their eyes thinking about what they can buy with the windfall of cash they could get.

 

In fact, in nearly all the cases I've read, most of the investors had tens of thousands of dollars to give. I don't know ANYONE personally or professionally that can write checks worth those amounts. Following Paul's words about being "content" would prevent people from being scammed.

Yes, this is true in some cases but not in all nor most. Many of those scammed were families or elderly brothers who had some money saved for their retirement. Someone they trusted told them that instead of having that sum in the bank which doesn't even give 1% interest, they could obtain a good interest rate in that company. IMO that's not necessarily greed, just poor judgment and excess of trust.

 

In my parents' case they are far from rich, but they had a small sum they had received from an inheritance. They were assured that the investment was completely safe, without any risks. And in their case it worked, one year later they withdrew their money together with a juicy interest. If they had lost it, it wouldn't have meant their ruin either, it was an extra they could do without. I guess every case is different.

 

Anyway it's good advice to avoid greed. :)

 

 

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Grumpy & I got caught up in one of these scams because a brother begged us to help him out. We are far from rich but agreed to let him use our savings. Stupid I know! As a result, he made a small amount of money, we lost our entire savings. Hard lesson learned. 

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5 hours ago, carlos said:

Yes, this is true in some cases but not in all nor most. Many of those scammed were families or elderly brothers who had some money saved for their retirement. Someone they trusted told them that instead of having that sum in the bank which doesn't even give 1% interest, they could obtain a good interest rate in that company. IMO that's not necessarily greed, just poor judgment and excess of trust.

 

In my parents' case they are far from rich, but they had a small sum they had received from an inheritance. They were assured that the investment was completely safe, without any risks. And in their case it worked, one year later they withdrew their money together with a juicy interest. If they had lost it, it wouldn't have meant their ruin either, it was an extra they could do without. I guess every case is different.

 

Anyway it's good advice to avoid greed. :)

 

 

I can see where you're coming from.

 

And I get what you mean with your bank example. Thanks!

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I remember back in my very young days, banks were offering an 18% interest rate and more for a regular savings account. In those days that wasn't a scam, but was legitimate. However the economy just isn't like that now anymore.

 

Several years ago shortly after I was baptized, a brother offered me an opportunity to make some money by signing up with him in some investment company whose business model was supposedly the same as the days of old, and could easily afford to pay 18%. I asked him a simple question: "What happens if this company fails? How will I get my money back if it does?" And the brother's answer was: "Oh, but this one can't fail! It's a sure thing!" Well, at that I asked him why he wasn't answering my question, and he backed off. A few years later he was disfellowshipped, although I don't think it had anything to do with this company.

 

Here in Montreal, we had plenty of scandals involving investments, particularly back around 2005 and following. I can think of about four of them just off the top of my head that went bad and were found out to be ponzi schemes. With three of these four companies, investment victims launched class action lawsuits, and finally won settlements (or are about to win settlements) out of court. But they only got back perhaps a small percentage of the capital they had invested (no interest at all, since there was none). The fourth one, though, was an investment involved in "off-shore" funds, undetectable to the government and therefore you didn't have to report the interest for income tax. The company went south, and people lost I think some 400 million dollars. That company was so complex, however, that no class action suit ever got off the ground! Everything was so well hidden that no one knew who to sue!

 

How sad. All because of the love of money.

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I should point out (although two days late) about my comments two posts back: The four investment frauds in Montreal did not  involve any brothers as directors of those companies, but some brothers may have been invested in them. I just mentioned those cases to show it seems to be happening everywhere. Unfortunately, some of that same spirit may creep into the congregations.

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