After a long legal battle that could have had criminal implications, Bishop Eddie Long has settled with over a dozen members of his church after being accused of convincing them to sign up for a Ponzi scheme. The man behind the investments was Ephren Taylor, previously known as a financial whiz kid with a knack for making money. Unfortunately, the recent financial crisis exposed some of Taylor’s less-than-ideal business dealings.
Taylor was presented to the congregation as a trusted associate of Bishop Long. The 13 former members of Long’s church say that they lost a total of about $1 million dollars due to the bad investment. Taylor and Long have not admitted to any wrongdoing, and the details of the settlement have been private.
The investments were solicited during a financial empowerment seminar held at the church in 2009. Internal memos allegedly show that Long was warned about Taylor long before he arrived at the church. The Securities and Exchange Commission claims that Taylor was victimizing large numbers of members of the black church over a long period of time. They also allege that Taylor was “running a Ponzi scheme that targeted investors in church congregations.”
Between 2008 and 2010, Taylor raised about $11 million dollars and used investor’s money to pay other investors, as well as to pay his personal expenses. According to authorities, Taylor remains in hiding. He was last seen in Lenexa, Kansas in August of 2013.
Financial Juneteenth lessons from this story:
1) Never take anyone’s word about the quality of an investment, even your pastor. Pastors are not financial advisers, and corrupt pastor’s manipulate people all the time. Investing on faith is a good way to lose a lot of money very quickly. If you don’t understand where your money is going, then don’t invest it until you do. Financial literacy is critically important for anyone seeking to build their wealth.
2) Most investments involve risk. Never believe anyone who says they can give you a high return with a 100% guarantee that you won’t lose any money. They are probably not telling you the truth.
3) Ephren Taylor may not be a terribly bad person, just a young man who didn’t understand how serious the SEC is when it comes to financial regulation. The United States has a very long history of investors being manipulated by shady asset managers, so the tall pile of applicable laws can be overwhelming. Before you ever consider taking money from investors or even starting an investment club, make sure you’re in line with SEC regulations before you do. In many cases, the government gives more prison time for stealing money than they do for murder.
