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Tuesday, 05 June 2012 03:17

When Christians Rip Off Christians

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This is a story about fraud. It is a story about Christians deceiving Christians. It is not, as you might anticipate, a story about a conservative Christian pastor or ministry bilking its followers. Rather, it is about liberal Christian non-profit organizations falling prey to a silver-tongued, well-credentialed man who didn't deliver on his promises. It is a tale about a man whose past included jail time for previous fraudulent financial projects. It's not as huge a story as the saga Bernard Madoff. It doesn't involve either the amounts of money Madoff dealt with, or his mostly upper crust clientele. National media hasn't covered this story. Nevertheless, in the world of struggling non-profit liberal-oriented Christian organizations, Rev. Steven E. Clapp's transgressions have had an enormous impact. This story ends tragically, for everyone involved.

"Back in February, a team of laypeople and I attended a meeting aimed at helping (mostly) congregations in the Wisconsin Conference of the United Church of Christ renew themselves," Daniel Schultz, pastor of Salem United Church of Christ in Wayne, Wisconsin, wrote recently in his always interesting (and occasionally cat showcased) blog, "A Pastor's Notebook."

"The keynote speaker was as unassuming older gentleman, a member of the Church of the Brethren, who had an easy laugh and a very warm way of highlighting the issues in renewal," Schultz pointed out. "He had spoken on the subject many times, including in Wisconsin. ... We came away feeling like we had gotten good advice."

Less than a month later, the Fort Wayne, Indiana-based Journal Gazette reported: "This much is certain: The money is gone, as is the non-profit group entrusted with it. Nearly everything else - how much money was lost, where it went, and who's at fault - is either in dispute or unknown."
The man in charge of the Fort Wayne-based non-profit called Christian Community Inc. was the Rev. Steven E. Clapp. The non-profit handled the finances for other non-profits, including the Religious Institute in Connecticut, an advocate for sexuality education, LGBT equality, and reproductive justice in faith communities and society, and Many Voices of Washington, D.C.

Clapp told The Journal Gazette that "In a very short period of time we had both a major donation and a major grant not come through. Those were the things that really did us in."

Two months later, the Rev. Clapp was gone as well. His body was found in his Fort Wayne home. The Allen County Coroner's Office ruled the death a suicide by asphyxiation.

In its report about Clapp's suicide, The Journal Gazette pointed out that "In addition to handling finances for other groups, Christian Community [Inc.] was running a loan program, promising investors 10 percent returns and encouraging participants to borrow against their 401(k) retirement funds to invest in it. That program lost an additional $500,000, Clapp had said."

While Clapp himself never gained Bernard Madoff's pre-scandal notoriety, nevertheless he was well known and well respected in the Christian non-profit community.

"Clapp authored or co-authored more than 30 books, conducted workshops on personal finance and has been a board member of Planned Parenthood Indiana, the Religious Coalition for Reproductive Choice, Greater Fort Wayne Campus Ministry and the Indiana Consortium on United Ministries in Higher Education. He was a volunteer assistant pastor at Lincolnshire Church of the Brethren and said he was an ordained minister," The Journal Gazette reported.

However, Clapp's troubled past should have been a huge warning sign to any organization or individual thinking about trusting him with their money.

Clapp was "indicted [in 1986] in a federal court in Danville, Ill., on 15 counts of giving false statements to an insured financial institution, alleging he obtained hundreds of thousands of dollars in bank loans using fake documents, according to court records and articles from the News-Gazette in Champaign, Ill," The Journal Gazette reported in a piece dated April 1.

While out on bail before his trial, "Clapp defrauded a third bank of $500,000 ... then used the money to flee, becoming a federal fugitive, court records show," The Journal Gazette pointed out.

More than a year later he was arrested and pled "guilty to seven of the original charges, plus a new charge of fraud for the loan from the third bank and failure to appear, according to court documents." In 1988, Clapp "was sentenced to 13 years in prison and ordered to pay more than $2.1 million in restitution." He served about 4 1/2 years, and then, in 1993 he moved to Fort Wayne, and got involved with the Lincolnshire Church of the Brethren.

He soon became part of Christian Community Inc., and within a few years, he was listed as the organization's president "while still on probation for fraud convictions and still owing restitution."

According to The Journal Gazette, "[t]he financial collapse of Christian Community nearly wrecked the Religious Institute," which claims it owes more than $400,000. The Rev. Debra Haffner, executive director for the Religious Institute, said she was "shocked" to find out that Clapp was "a convicted felon, and even more surprised to learn that his probation had ended just over a year before he took control of her group's finances," the newspaper reported.

"I was almost disbelieving. It felt very difficult to reconcile that to the person I had known since 1998," Haffner said. "The initial news was horrible, but the extent of the betrayal and how long it's gone on is even more difficult."

"If we were the only victim, I would really be questioning my own judgment at this time," she said. "But there are many organizations and many victims ... He was obviously very good at what he did in a way that's horrifying."

Many Voices has thus far refused to comment on its financial losses.

We'll let Pastor Dan Schultz have the last word:

"Obviously, it's a bit strange to meet someone one day, then find out they've killed themselves only weeks later, leaving behind a huge mess and a troubled past. It's even weirder to meet someone and then hear from friends that he's defrauded them. But most of all, I suppose this serves as a reminder that the church is made up of broken, imperfect people, some of whom carry dark secrets with them even as they do good in another area. It's a sad end to Clapp's story, obviously. I hope that he is at rest now, that his family can heal, and that the people who lost money with him get something like restitution or justice."