From the Washington Post today:
"For five years, the SEC said, Beasley and Judd paid existing investors with money from new clients — a classic Ponzi scheme. The most notorious fraud of this kind, run by Wall Street financial guru Bernie Madoff, cost investors billions of dollars. By comparison, one expert said, the alleged Vegas scam was distinguished less by its size and more by its victims: It came to be known as the 'Mormon Ponzi scheme.' ”
From what I have read, such crimes are called "affinity fraud," and they are not just a religious group phenomenon, so it feels unfair to say a particular faith is more gullible than say a group that belongs to the Elks Club. We all belong to affinity groups — religious, professional, and social — and would be more likely to listen to an associate in that group. The thing in common seems to be a lack of sense of when you have enough in life. These folks had huge amounts to invest. Being Mormon, they had such extra even after having tithed (10%) to their church, as is required. That sounds like "enough" for anyone, but their faith hadn't yet taught them that.
Here's the part that made me sick to my stomach:
"As the operation got bigger, so did the men’s lifestyles. Beasley bought a $3.8 million house in South Lake Tahoe, Calif. He bought a $750,000 RV, a $250,000 boat, a $240,000 Bentley Continental and two $25,000 Jet Skis..."
It wasn't the house, or the RV, or the boat, or the Bentley, that got me — such things are beyond my imagination — it was the jet skis. Just a couple of smaller purchases for fun, kind of like when you throw in a pack of gum at the check-out stand. I recently paid off the last of an equity loan on my house after many years. It was worth it because it got my kids through college. The last chunk of it was less than one jet ski. When I think about the budgeting, the saving, the extra payments, the worrying, not taking vacations, avoiding eating out, etc. it took me to pay off that loan, it made the callousness of these men even more shocking.
My bank has called me twice since I paid it off. Their money manager ("Just call me Jeff!") wants to talk to me personally about investing. I haven't picked up. I will certainly try to use my middle class retirement income wisely, but I am quite clear I already have enough.
"... I have learned to be content with whatever I have. I know what it is to have little, and I know what it is to have plenty. In any and all circumstances I have learned the secret of being well-fed and of going hungry, of having plenty and of being in need. I can do all things through him who strengthens me." — Philippians 4:11-13