By Clinton Martin
Affinity Fraud – a type of investment scam that exploits the inherent trust of a member of a specific community which often leads to significant financial losses for the participants. Groups like the Amish and the Mennonites are especially vulnerable to this kind of scam. While a complete stranger knocking on the door of an Amish farmhouse would not get very far trying to sell risky investment products, a person who dresses “Plain” and speaks the PA Dutch dialect and knows the cultural norms and customs organically would be able to establish a connection of trust and familiarity rather quickly.
Risky investment products might land successfully in such a setting. The most recent example of such a problem is the still-unfurling Ponzi-scheme perpetuated by Daryl Heller and his Paramount Management Group, a company that maintained free-standing ATMs at high-traffic locations. Investors entrusted funds to the company, which was to purchase and place ATMs. When people used the ATMs to withdraw money, the fees collected for the service would be pooled and distributed to the investors as returns. That was how it was supposed to work, but instead it became a massive Ponzi-scheme where “old” investors were being paid by “new” investors, with the actual number of ATMs being well below published numbers, and fees collected by users amounting to insignificant revenues for investors.
Heller had a few people working to recruit investors, one of which was Dave Zook, a man who had been born and raised in an Old Order Amish family. Zook was a successful businessman in both manufacturing and real estate investments. He therefore had immediate credibility with Plain Community investors, which could cause them to overlook red flags surrounding the ATM network’s operation.
Affinity Fraud is, however, by no means the only type of scam circulating among Amish and Mennonite communities. No – the “usual” scams of fake callers, fraudulent job offers, bogus prizes and sweepstakes, etc. that we see in the “English” world around us also exist among the Plain People. The growing prevalence of these targeting efforts among Amish and Mennonite people led a group of concerned individuals to form Fraud Aware.
What is Fraud Aware? It is an organization formed by Amish and Mennonite brethren who were concerned by the consequences of many different types of fraud wreaking havoc in their communities. Fallout is financial, emotional, and even spiritual, and they felt something needed to be done to help educate their communities on identifying and preventing fraud.
I became “aware” of Fraud Aware when I picked up a booklet they had published. Titled “I Almost Fell For It!” the booklet contains stories of real losses, close calls, articles, facts, and statistics intended to serve as cautionary tales and sober reminders about scam artists and the strategies they employ to hoodwink otherwise reasonable people.
“We believe that the more our people are aware of the strategies that scammers use and the more we tell each other our stories, the better prepared we’ll be the next time a scammer calls.” If you want a copy of the booklet, you can purchase one for $4.95 or a bundle of 10 copies (to hand out to friends and family) for $39.50. Call 800-776-0478 (Christian Light Publishers) to order.