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A Mormon Rip-off

August 29, 2007

by Ann1

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.

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3 comments

  1. For many years, Salt Lake City was considered the stock fraud capital of the United States. For some reason or another, for all their talk of hard work and individual effort, Mormons are drawn in by ponzi schemes like moths to a flame. I’m reminded of an old saying that says people could go to heaven with half the effort that they go to hell. Perhaps instead of trying to get rich off the next big scheme, Mormons could use their time and effort engaging in legitimate, non-multi-level companies.

    It should be noted, however, that a lot of religious groups are taken in by confidence men (and women), not just Mormons.


  2. So, DPC, you think the tendency to get ripped off can be a function of religious faith? Perhaps our trust in things “too good to be true” comes from our hope of heaven, life after death, etc. – also all “too good to be true.”

    I think the SAHM/large family angle is a useful one for people trying to run a pyramid con. That’s the piece of this story that makes me the most angry.

    I lost two hours last night googling all the people I used to know who were in on this.


  3. The best criminals know which buttons to press to maximize their gain. I primarily do work in securities and finance law, so I’ve seen a lot of court cases and arbitrations where you wonder what the people who invested were thinking when they handed over their money. The best (or worst…) scam that I know about happened to some members of a ward to which I used to belong. Apparently, some random guy started dating a thirties-something woman in the ward and then he starting taking the discussions with the missionaries. He agreed to be baptized and asked the woman he was dating to marry him after hearing the discussion on eternal marriage. All the while, he went to church every week and started developing relationships with members in the ward and participating in their service projects and just being an all round nice guy. After he got baptized, he started to tell a few members of the ward about a great ‘investment opportunity’ and told them that he could get them in on the ground floor if they gave him some money to invest for them. Needless to say, several members were taken in by him and after he had gotten all the money, he left town. It was almost like it was right out of movie script. I feel sorry for those that were taken in, but when it comes to money, I wouldn’t trust anyone outside of my own family (and even then, it depends on who the family member is!!).



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