| Ephren Taylor and Eddie Long |
Ephren Taylor was once known as a financial whiz kid, proudly boasting about his rapid wealth accumulation on national television. He’d made appearances on several national TV and radio shows and was often presented as a model of black economic success. Taylor was also a product of the black church, which broadened his appeal within the African American community. Pastors trusted Taylor to come into their churches and congregations, and also trusted him with their money.
But much of that unraveled over the past year, as Taylor was charged with a series of securities law violations resulting from allegedly fraudulent investments he was pushing to church members. The Department of Justice just announced that the 31-year old Taylor has been arrested for “defrauding investors across the country of more than $5 million.”
Taylor, the former CEO of Capital City Corporation, was arrested along with his COO Wendy Conner, for defrauding investors between April 2009 and October 2010. After being on the run for some time, Taylor surrendered to the Secret Service in Kansas City, MO this week.
In a statement released by his attorneys to ABC News, “Mr. Taylor voluntarily surrendered to law enforcement immediately upon learning of the indictment and he is anxious to address the pending charges.”
ABC News first showed an investigation into Taylor, who held a “Building Wealth Tour,” giving money management seminars around the country. One of the most famous churches that Taylor visited was the New Birth Missionary Baptist Church, run by Bishop Eddie Long. He also visited the Lakewood Church in Texas, run by Pastor Joel Osteen.
The Department of Justice says that people gave their life savings to Taylor after his convincing presentation. In fact, 80 people in Georgia alone allegedly lost $2 million dollars from Taylor’s scheme.
New Birth told ABC News in a statement, “It has always been our prayer for a resolution to this matter in which many lost their investments. Our hearts go out to anyone who suffered losses, and we pray for healing.”
The DOJ says that Taylor convinced churchgoers to invest in imaginary companies with revenue figures that were almost entirely fictional. The Securities and Exchange Commission ordered Taylor to repay $14 million to investors, but says that the man spent his money on car payments and credit card bills, rather than the investments he claimed that he was making on behalf of his clients.
Taylor is also accused of using some of the money to pay for the music career of his wife Meshelle, creating an expensive music video in which his wife is seen wearing furs and diamonds. The title of the song is called “Billionaire.” When ABC News asked Taylor his net worth in 2007, he responded with, “Maybe $20 million on a bad day.”
One woman interviewed by ABC News, Lillian Wells, says that Taylor took her money in 2009, promising a 20 percent return on her investment. She says she was told that her life savings would be used to invest in a company designed to buy homes in the inner city.
Wells says that when she tried to get her money back from Taylor, he was nowhere to be found. She eventually filed bankruptcy in 2012.
The arrest brings a close to a long ordeal for both Taylor and his alleged victims. But this might be just the beginning, since a date for the trial has yet to be determined.
Financial Juneteenth lessons from this story:
1) Ephren Taylor’s story is a cautionary tale about the pitfalls of worshipping money and being boastful about it. Before the scandal broke, Taylor made a multitude of national media appearances touting himself as a young financial genius. The video he made with his wife seemed to show that he defined himself by the amount of money in his bank account and may have been living by a value system that is in contradiction to the biblical principles he claimed to define his life. Money had become a drug for him, and it’s hard not to say that he’d become addicted.
2) There are 100-year old securities laws on the books designed to protect investors from fraudulent individuals and companies seeking to dupe them out of their money. So, if you ever get into the business of taking money from others for the sake of investment, make sure you’re aware of what these laws entail. You should also make sure that the money goes toward the purpose for which it was intended. The federal government often gives longer sentences for financial crime than any other crime on the books.
3) Beware of those selling investments to you that guarantee a high return. Almost nothing in finance is ever guaranteed. If something seems too good to be true, it probably is. Also, you should never invest all of your money in one financial asset. Taylor’s victims were likely sitting ducks for him for at least a couple of reasons: 1) It’s easy to be convinced to believe in someone who was recommended by your pastor, who also speaks the same biblical language as you do, 2) they over-invested in Taylor, when they should never have put more than 10 – 20% of their wealth into his company. By coming into the church and leaning on memorized verses from the bible, Taylor was able to do the same thing that unethical pastors have done for centuries: Get people to bet everything on faith rather than logic. Don’t let yourself be a victim, since there are plenty of people who’d be happy to fool you into giving them your money.
4) We cannot conclude that Ephren Taylor always intended to be a bad guy. He was relatively young when all of this was taking place, in his twenties.
Micah 3:
11 The heads thereof judge for reward, and the priests thereof teach for hire, and the prophets thereof divine for money: yet will they lean upon the Lord, and say, Is not the Lord among us? none evil can come upon us.
Leviticus 19:
13 Thou shalt not defraud thy neighbour, neither rob him: the wages of him that is hired shall not abide with thee all night until the morning.
Luke 12:
16 And he spake a parable unto them, saying, The ground of a certain rich man brought forth plentifully:
17 And he thought within himself, saying, What shall I do, because I have no room where to bestow my fruits?
18 And he said, This will I do: I will pull down my barns, and build greater; and there will I bestow all my fruits and my goods.
19 And I will say to my soul, Soul, thou hast much goods laid up for many years; take thine ease, eat, drink, and be merry.
20 But God said unto him, Thou fool, this night thy soul shall be required of thee: then whose shall those things be, which thou hast provided?
21 So is he that layeth up treasure for himself, and is not rich toward God.
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