It’s Got To Stop

Howard Beale in Network might just as well have been yelling about the fraud and embezzlement that is epidemic in the church, but who’s listening?

Where’s the outrage?

When will the church community get up out of their collective chairs, open the window, and yell, “I’m as mad as hell, and I’m not going to take this anymore.”

The outburst would be over the fraud and embezzlement in the church. It happens every week of every month of every year — volunteers and employees in churches who steal from the offering plate; staff people who are entrusted with the weekly collections, but justify taking some of that money for their own use.

Plain and simple theft — $50,000 here, $100,000 there, even so much that one church went broke and had to close. It’s an outrage. It doesn’t have to happen.

Go to Google Alerts and insert “church theft” and every Monday morning, invariably, there is a news report of another church that has experienced an embezzlement. This magazine nearly every month has enough to report several of them in its news pages under the heading WHY CHURCHES NEED FINANCIAL CONTROLS.

Here are three more, in addition to what is in this month’s news pages:

• Melynda J. Fenwick, 37, of Greencastle, IN, an administrative and financial secretary at Gobin Memorial United Methodist Church, was accused of stealing $274,000 from Gobin. Church officials discovered what appeared to be doctored bank statements during an audit of the church’s books. She issued as many as 100 checks to herself off a church account and forged signatures on those checks.
• Otis Ray Hope, 53, will serve more than three years in jail after admitting he filed false documents to obtain a loan and didn’t pay taxes on hundreds of thousands of dollars he profited while leading the prominent Montrose Baptist Church in Rockville, MD, with 2,000 members.
• Kenneth Leigh Montgomery, 49, former pastor of Hilltop Community Church, Virginia Beach, VA, will serve 10 months in jail for stealing from his congregation and its insurance company. He stole from the church by using money for past due mortgage payments and falsely reporting break-ins and thefts of church property.
• Since January our computation suggests that $11 million have been taken from churches‚ sums that could have gone into expanding the Kingdom. And that is only what’s been reported.

“Churches are often too trusting, and for obvious reasons,” says Ken Fisher, in questions put to him by this magazine. Fisher is author of a new book How to Smell a Rat: The Five Signs of Financial Fraud [Wiley, 2009].

“The most important function to avoid internal embezzlement is to separate treasury from controllership so the controllership reports up a different command chain than treasury. No one who has access to the money can control the books, that both show where the money was spent and as an organization is responsible for seeing that the money that was spent was supposed to be spent.

“If you do this, it takes complicit cooperation between two people to embezzle, which is much, much less common,” Fisher says.

Churches are what Fisher calls “affinity groups” and successful con artists rely on their community, the church, to supply victims. “Affinity group fraud is very common for exactly the reason that the organization tends to trust those who are part of their affinity group, and then lets their guard down,” Fisher says. “It is illegal to discriminate on the basis of religion, but it is common to trust those in your affinity group because they supposedly share common values and beliefs and not ask the tough questions you might ask of others.

“Criminals understand this. The classic church embezzler looks and acts exactly like the model church member specifically to not be suspected.”

Why church embezzlement happens is obvious; churches are easy marks, and church members are too trusting. The question is, why aren’t more churches taking the steps to prevent theft by staff and volunteers?

It is a financial epidemic, when week after week there are reports of fraud. And that’s only the churches who go to the police and make a complaint. How many churches fail to report smaller amounts stolen, out of embarrassment or some misguided notion that they shouldn’t send a fellow “Christian” to jail?

Says Fisher in his book: “And there will — 100 percent certainty — be more future cons; always have, always will.” Churches too, he is asked?

“Of course,” he responds to Church Executive. “There will always be bad guys and bad guys will always take advantage of seeking positions in organizations that aren’t structured to prevent the criminal act. Churches are both often too trusting and also often not set up with people at their helm who are trained to run the organization in a way that won’t be defrauded.”

Comments? ron@churchexecutive.com