Affinity Fraud; With Friends Like You . . .
By: Bill E. Branscum
Copyrights 2012

"You cannot scam an honest man!" How many times have we all heard that? Aside from being one of the most asinine statements I ever heard in my life, it is irresponsible. If taken to be true, it serves to assure the honest man that he can not be defrauded.

The word "affinity" connotes attraction, similarity, connection and relationship. Affinity Fraud is an insidious crime that honest people are particularly susceptible to.

Personally, lecturers and experts who seek to define and model their subject by declaring that, "There are three rules . . ," "The five governing principles are . . .," yadda, yadda, yadda, make me tired. Nevertheless, I find myself saying that all "crimes of persuasion" are based upon three fundamental elements.

First, the victim must have something the fraudman wants; there can be no swindle in the absence of value. Second, the fraudman induces the victim to trust; the mechanism of the fraud is a voluntary relinquishment - the word "voluntary" being used as a layman would use it. Third, the fraudman betrays the victim's trust, deliberately and by design.

The word "con" is derived of "confidence," con artists are confidence men why ply their trade by inducing trust. Simply stated, affinity fraud is a confidence game where the "trust" is pre-existing.

For example, Lazaro Rodriguez, the Principal of Texas Club Investment Associates, was a con artist in Miami, a city with no shortage of scams. Being Hispanic, he preyed upon other Hispanics, "trust me hermano, have I got a deal for you." The Hispanic community believed they could trust him and they invested in non-existent "Texas oil wells." It was a Ponzi scam that netted about $2M, Rodriguez was convicted and sentenced to serve five years.

Religious organizations are also a common target. In the case of Greater Ministries International Church (GMI), they bilked fundamentalist Christians out of half a billion dollars. The promoters piously quoted scripture in support of their schemes. The faithful were told, "Give, and it shall be given unto you." Luke 6:38

Ronald Randolph, an African-American Baptist minister from Texas targeted black Baptists and defrauded them of about $4M. He persuaded them to invest in International Polymers Works and promised them extraordinary returns.

Pentecostal church member Robert Fain targeted the congregation of the Assembly of God Church in Ogden, Utah and persuaded them to invest in his company, Making Good Choices, Inc. His "take" was relatively small at $200K; since it ultimately cost him 15 years in the Utah State Penitentiary, he may have questioned the wisdom of his "good choices."

Bill Bresnahan's sorry little scam probably profited the least of any of these people I could name, but he places especially low on my list. Bresnahan was a retired policeman who "testified" before his congregation about his mission in Manhattan - feeling the call of the Lord in the aftermath of 9/11, our hero valiantly fought death, pulled bodies from the rubble and prayed with survivors. His testimony netted him a $3200 collection - and cost him whatever reputation that his law enforcement career might have merited.

Daniel Nelson Tynon, a Rotarian, preyed upon members of the Rotary International service organization, promising returns of eighteen percent (18%) through his business entity, the Dant Corporation which was purportedly investing in county tax liens. The scheme unraveled in 2012 and Tynon fled to Thailand where he was arrested by the Royal Police, Immigration Bureau and turned over to US Postal Inspectors who escorted him back to face charges to which he has pled guilty. Losses are estimated to be $1.97 million out of a total take of $7.6 million. It will be interesting to see whether the victims successfully pursue claw back and equitable redistribution, or take advantage of the tax implications.

Ahmed Alabadi of Dearborn, Michigan, a dual citizen of Iraq and the U.S., was indicted in a Ponzi scheme in which he defraud investors out of approximately $2.5 million. Alabadi mostly targeted individuals of Middle Eastern descent who resided in Dearborn, Michigan. He used a network of agents and personally solicited investment money which he claimed would be used to help rebuild Iraq, fulfill contracts with the United Nations and engage in an export/import business. He promised exorbitant returns and no risk of loss. In reality, he failed to pay the returns and refused to return the principal to investors after their investment terms had expired.

Recently, the Attorney General's Office obtained a court order against eight executives and employees of a company called ITF Enterprises, using an address at 67 Wall Street and at 410 Park Avenue, which targeted primarily vulnerable consumers of limited means from African-American and Dominican communities in New York City. The business had a veneer of credibility because of the use of mail drops at prestigious addresses and because the promoters of the scheme gave themselves titles, such as CEO and President, even though the company was not a corporation.

On August 21, 2012, the Securities and Exchange Commission charged a Puerto Rico resident and his company with conducting a Ponzi scheme that targeted evangelical Christians and factory workers in Puerto Rico. The SEC alleges that Ricardo Bonilla Rojas and his firm Shadai Yire raised at least $7 million from as many as 200 investors living primarily in Puerto Rico but also on the U.S. mainland in such states as Florida, New York, and North Carolina. The SEC alleges that Rojas marketed the investment opportunity in presentations to evangelical Christian groups and factory workers who were often inexperienced investors, falsely assuring them that their principal contributions were “100% guaranteed” and promising returns up to 50 percent, telling them he would invest their money in commodities. According to the complaint, Rojas never actually invested any money in commodities and instead used new contributions to repay earlier investors in classic Ponzi scheme fashion and stole $700,000 for himself.

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Whether it's a "single mom" pitching some advance fee scheme as a way for other single moms to work from home, a Christian preying upon the faithful, or a minority preying upon his minority group, it is referred to as an Affinity Fraud - the nature of the scam itself is irrelevant. The term, "Affinity Fraud," describes any fraudulent scheme where the perpetrator capitalizes upon a group to which he belongs, a common or cultural shared affinity, and preys upon that relationship.

To quote Claude Louis Hector, "Protect me from my friends, against my enemies I can defend myself."

I welcome your comments, questions and suggestions.

© Copyright 2002 - Bill E. Branscum. All Rights Reserved.