Bring the Payne Like many other teachers of the so-called
"prosperity gospel," Pastor Gerald Payne had a distorted idea of Christian charity and
divine blessings.
By 1993 he had a church – Greater Ministries International, based in Tampa, Florida – and
a loyal flock that subscribed to Payne's bigotted beliefs that white, American Christians were
exempt from Government rules.
He preached that Christians were promised prosperity in return for their faith in God.
While Payne's following was as socially backward as they come, the man himself was up to more
devious tricks.
He'd go on to steal $500 Million from the Christian community.
So how did Payne pull off one of the biggest Ponzi schemes in American history?
Convicted Payne was already a convicted felon, having
served time for lying to a grand jury when he became an ordained minister in the 1980s.
Like many of his fellow Ponzi-Pastors, Payne received a message from God.
Of course, "faith in God," in Payne's view, required giving money to his church, with
the promise of doubling that gift based on Payne's loose interpretation of a Bible verse
beginning with, "Give, and it shall be given to you."
With help from James Maher, who had been on probation for operating a pyramid scheme,
and Haywood "Don" Hall, Payne hatched his plan.
Church members and other believers would contribute money to Greater Ministries International.
That money would be "used in the ministry to do the works the original church was designed
to do."
As a reward for their faith, donors could expect to double their initial investment—a
true blessing from God himself.
However, nothing was ever explicitly promised by Payne or his church.
Just have faith.
What contributors didn't know, however, was that the "blessings" they received were funds
collected from other investors, the hallmark for a classic Ponzi scheme.
Ponzi schemes are more common than you think.
Bernie Madoff perpetrated the most notorious scam in recent years.
But, we can trace the history of Ponzi schemes back to 1920.
The year in which the scam's namesake, Charles Ponzi, netted an estimated $15 million in
eight months by selling people on the promise of high financial returns by investing in
foreign postal return coupons.
Ponzi claimed investors could redeem the coupons in the United States for a much higher value.
The trouble was, Ponzi never purchased anything; all he did was use money from later investors
to pay earlier ones, keeping the profits for himself.
The strategy worked for a while until the money ran out.
In a nutshell, that's all a Ponzi scheme is: paying early investors with cash from later
ones—without ever investing any of it—until the well runs dry.
The money flowed into Greater Ministries International.
Payne, his wife, Betty, and other church leaders operated out of an old bank building in Tampa
equipped with safes and a designated counting room.
But because the building had a designated area for "worship," Payne got away with calling
it a Church.
There, they received hundreds of millions in contributions, and little, if any, was
invested in financial markets or business endeavors.
Are you ready for the cherry on top?
Because Payne had pulled enough strings to call himself a Church, the entire scam was
immune to government regulation.
Saving Face So how does someone fall prey to a scam like
this?
For starters, Greater Ministries International camouflaged its activities well.
For instance, the church operated charitable programs for recovering addicts and the homeless
that appeared genuine.
However, their anti-government beliefs spoke the language of ultra-conservative Christians
who viewed the government as a flawed institution that went against the teachings of Jesus Christ.
This resonated especially well in Patriot Movement circles, as well as Amish and Mennonite
communities.
Those involved in the Patriot Movement believe the U.S.
Government has been infiltrated by sinister forces intent on establishing what they call
a "New World Order" - a global system of government under which Americans will be stripped of
their freedoms.
Many times, these beliefs are intertwined with bigoted ideology.
Greater Ministries' one-time lawyer, a man named Charles Eidson, was the perfect example
of this.
He had headed the white supremacist Church of the Avenger in Tampa before joining up
with Payne and was already infamous in the region for his anti-Semitic public statements.
In 1997, Payne and Eidson placed an ad in a Patriot Movement publication, urging readers
to defy the government and what they deemed as "Zionism," or Jewish influence in the United
States.
In short, Payne and Eidson were insane.
The average person would see through their bigotry, but their ignorant followers fed
right from their hands.
Because those followers were anti-government and anti-media, any attack on Payne, his church,
or their beliefs only cemented their ignorance even further.
But why were the Amish and Mennonites, relatively peaceful and well-meaning believers, targeted
by Payne?
Members of those communities hold a strong belief in the separation of church and state.
While they are typically law-abiding citizens, they view Christian doctrine as superior to
any laws created by man.
Many also eschew civic duties such as holding public office, voting, and military service.
Members exempt themselves from paying Social Security taxes since the idea of government-funded
insurance or a pension conflicts with their belief in faith-based self-sufficiency.
However, faith-based investments that promise to double, triple, or even quadruple your
life savings are fair game.
Double Your Money Scam Payne and his co-conspirators operated freely
for years, even though the IRS began looking into Greater Ministries as early as 1995.
To help spread their message, Payne recruited other pastors around the country – known
as church elders – who received five-percent commissions for convincing their church members
to give to Greater Ministries International.
One of those elders, James Chambers, received $1.3 million in commissions, which Payne and
his cronies codenamed "gas money."
Greater Ministries also hosted rallies in different states designed to raise more money.
Speakers spouted anti-government and racist rhetoric while promising a healthy return
on investments for the faithful.
"Be humble," Don Hall told attendees at one rally, "but you don't have to be poor."
Some Greater Ministries investors cashed in during the scam's early days.
Many received envelopes in the mail stuffed full of $50 or $100 bills.
But it was all smoke and mirrors.
Payne couldn't have been more direct with his money-making scheme.
It was literally called "The Double Your Money Gift Exchange," and it promised to do just
that.
The Great Spend Payne promised investors that their money
would be put to good use—that he was "doing the Lord's work."
Payne also enticed donors by saying he'd invest in precious metals like gold and diamonds
dug up in African mines, which ultimately proved unproductive.
He never dug up a single nugget.
As the money poured in, Payne bought a hotel and convention center in Kentucky and opened
an herbal-remedy cancer research center.
He even got the gears turning on a private island that Payne vowed to develop into a
sovereign nation for himself and his followers.
And since a sovereign nation of that sort would likely need defending from worldly governments,
Payne set aside a portion of his funds for a massive arsenal that included machine guns,
explosives, surveillance equipment, and a radar system.
Oh, and he also found enough spare change to spend on an opulent lifestyle for himself,
which included extensive travel in Europe and Africa, as well as an extensive collection
of—well— let's call them inappropriate videos.
The Great Fall Finally, in 1998, five years after establishing
Greater Ministries International, Payne's luck ran out.
BestBank, a crooked Colorado-based bank where Payne kept church funds, collapsed after bank
officials overstated the value of its credit card business to make millions in bonuses.
When that happened, Payne lost most of the money he had been using to pay early investors,
which sent the whole house of cards tumbling down.
Ironically, it was a bank of like-minded swindlers, more so than the Government or law enforcement,
that led to Payne's downfall.
Shot Down in Flames Following the BestBank collapse, murmurs about
what Payne was doing grew louder.
Instead of promising investors money as a reward for their faith, Greater Ministries
began issuing worthless gold and silver certificates backed by non-existent hauls from those unproductive
mines in Africa.
As you might imagine, investors weren't impressed.
Even after word of his scams leaked out into the media, Payne proclaimed his innocence,
declaring negative comments against him were an anti-Christian crusade.
The Crusaders won, and in March 1999, U.S. Marshals raided Payne's headquarters and took
him, his wife, and seven other church officials into custody on charges including fraud and
money laundering.
Patrick Henry Talbert, a church director arrested the previous year, was convicted of defrauding
11 older women of $265,000 in a scam he devised independently of Greater Ministries International.
Jonathan Strawder, a former church employee, was convicted of operating a copy-cat Greater
Ministries-type scheme under the name Sovereign Ministries.
By August of 1999, law enforcement had seized all of the church's assets.
Payne defended his actions tooth and nail, saying the government had no authority over
him or his church's operations, invoking the First Amendment of the U.S. Constitution,
which protects freedom of religion in the United States.
In essence, as far as he was concerned, he was a peaceful citizen following his religious
beliefs and was not subject to any laws.
To him, it may have sounded like a good argument.
The jury didn't agree.
Payne was sentenced to 27 years in prison for his crimes in March of 2001.
His fellow defendants, including Betty, were given sentences ranging from 13 to nearly
20 years.
Aftermath While that was a win for justice, most of
the money that Payne took in was never recovered, meaning those he defrauded never received
restitution.
Many, especially those who fully subscribed to Payne's version of a corrupt U.S.
Government being swayed by a New World Order, never spoke out against him.
They viewed his arrest and conviction as proof that a shadowy ruling class was indeed persecuting
their noble leader.
Even after the Greater Ministries' building and assets were seized by the government,
some congregants continued holding worship services in the parking lot.
That's one reason why faith-based financial scams are so popular.
Over-the-top faith communities are often ignorant, viewing outside forces as evil, conniving
institutions bent on stripping them of their religious freedoms and denying their teachings.
Even after being taken advantage of, many victims of faith-based scams don't press charges
or seek restitution, fearing pushback from their communities.
In total, Payne stole half a billion dollars from an estimated 18,000 people throughout
his scam.
While early investors cashed in, as typical with most Ponzi schemes, those late to the
game lost around $174 Million.
It's estimated that more than 30,000 Americans lose more than $600 million in similar scams
each year, proving that con artists like Payne can always find willing victims beneath the
steeple.
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