In October 1997 Mormon businessman Gene Armold of Westerville, Ohio2 started the company “Purchase Plus Buyers Group.” Over 65,000 people, many of them LDS, invested in the company based on the promise of group purchase savings and big commissions. In September of 2000, six months after Armold had sold the business, the Ohio Attorney General’s office filed suit against the company to force the return to consumers of $100,000,000. The company immediately closed.
Initially, Armold claimed that he, too, was a victim, having lost thousands of dollars from the sale to the subsequent owner. But in October 2004, Armold was sentenced to 45 months in Federal prison for making false statements on income tax returns and failing to report more than $4 million in adjusted gross income for 1999 and 2000. At the trial, it was revealed that the $4,000,000 of unreported income came from Armold’s operation and ownership of Purchase Plus Buyer’s Group.
Mormons were targets of the marketing efforts, and membership was used to drive sales. For example, Armold reportedly told some consumers that he wanted to give families an opportunity to make more money so that mothers would be able to stay home. At some point a stake president in the area spoke to a ward in his stake about the company, saying “It’s inappropriate to take advantage of church membership or knowledge of other members to build a business.”
Are Mormons too trusting? Sometimes. I don’t think this story illustrates any universal truths, but it does illustrate what happens at the confluence of greed and misplaced trust. We ought to trust one another in spiritual matters – we need each other. But where money is concerned, all bets are off.
1Much of the information from this article is taken from the the old Mormon News web site. I hope I didn’t plagiarize…let me know if I did.
2Full disclosure: I used to attend a ward in this town, though I moved out of state before all this happened. I knew some of the principles in the company, and some of them were my friends. Others, I never really liked much.