Protecting the Flock is a resource for church leaders and Christians to use to identify and respond to fraud. With fast moving changes to technology and payment methods, those committing financial and cyber crime have more at their fingertips to steal from others, including the Christian church and its members. Developing a defense against this crime is good stewardship and can help congregations to thrive.

1. Protecting the Flock:
Church Fraud Prevention and Education
Protecting
The Flock
Internal Fraud External Fraud
Congregational
Concerns
June 2021 Overview

2. Protecting the Flock: Church Fraud Prevention and Education
Overview
Protecting
The Flock
Protecting the Flock is a resource for church leaders and Christians to use to identify and respond to fraud.
With fast moving changes to technology and payment methods, those committing financial and cyber crime have
more at their fingertips to steal from others, including the Christian church and its members. Developing a
defense against this crime is good stewardship and can help congregations to thrive.
Protecting the Flock is broken into five parts:
❖ The Truth About Fraud
❖ Internal Fraud
❖ External Fraud
❖ Congregational Concerns
❖ Implementing a Fraud Risk Framework
$68B
The estimated amount of money the
church losses due to “Ecclesiastical Crime.”
From 2019 study by The Center for the Study of Global Christianity
[Gordon-Conwell Theological Seminary].

3. The Truth About Fraud
Biblical Fraud
Protecting
The Flock
OT NT
The Serpent in the
Garden
Adam and Eve fall for the
scheme of the serpent,
leading to the fall of man.
Jacob the Heel
Grabber
Jacob impersonates his brother
Esau. Laban switches Rachel
for Leah.
The Ten
Commandments
(Exodus 20)
Coveting (v,17) leads to
Stealing (v.15) + Lying (v.16)
= Fraud
Jesus in the Temple
Jesus turns the temple tables
of those exploiting others
purchasing sacrifices.
Ananias and Sapphira
While giving money to the new
Church, this married couple lie
about how much money they
sold a property for.
Psalms 34:13
“Keep your tongue
from evil and your
lips from speaking
deceit.”
Job 11:11
“For He knows false
men, And He sees
iniquity without
investigating.”
Proverbs 13:11
“Wealth obtained by fraud
dwindles, But the one who
gathers by labor increases it.”
Matthew 7:15
“Beware of false prophets,
who come to you in sheep’s
clothing, but inwardly are
ravenous wolves.”
Though the schemes were much simpler, fraud can be seen going back to Biblical times. There are multiple instances in
the Bible that emphasizes various forms of the crime. Some examples are found in the narratives while other examples
consist of advice and instruction.
Micah 2:2-3
“…They covet fields and seize them, and
house, and take them. They defraud
people of their homes; they rob them of
their inheritance. Therefore, the Lord
says, “I am planning disaster against this
people…”

4. The Truth About Fraud
The Ever-Changing Face of Fraud
Protecting
The Flock
Fraud has come a long way since Bible times. With technological
advancement applied to the financial services industry, the crime landscape
looks completely different than it did just a few decades ago. This results in
constantly evolving fraud attacks against organizations and individuals.
Fraud can be seen across many industries; it is not relegated to just the
financial sector. Those committing the crime can target the young, the old,
the rich, and the poor. The church is not excluded from being targeted.
The best course of action is to take steps to protect and defend ourselves,
praying that those committing these crimes will see the error of their ways
and have the moral courage to turn to God and away from sin. Even in this
ever-changing world of fraud, God is a constant for us.
The Fraud Triangle
While attacks continue to change, the factors
in committing fraud remain the same. The
Fraud Triangle visualizes this.
Rationalization
The
Fraud
Triangle

5. The Truth About Fraud
Church Fraud in the Time of COVID-19
Protecting
The Flock
The ongoing impact of the COVID-19 (Coronavirus) has created a new environment for fraud to thrive in.
Many churches have struggled to stay afloat financially during this time. Without people filling pews, the Church
has needed to move to new and innovative ways to connect with their congregations, also extending to the way
it conducts its finances. This can create new risks that the church has not had to account for in the past.
Below are a few COVID-19 related fraud risks the Church will need to navigate.
Move to Electronic
Giving
Internal Fraud
Exposure
Increased Phishing and
Social Engineering
Consumer Scams
Targeting Congregation
Long term internal fraud
schemes may be exposed as
church finances tighten because
of lack of attendance, funding,
etc.
Increase in potential exposure
as churches emphasize
electronic giving without fully
understanding the fraud risks
involved.
Lack of face-to-face interaction,
increased fraud attacks, and
pressure to act result in more
victims clicking fraudulent links,
sending fraudulent payments,
etc.
Scammers leverage COVID-19
within their schemes,
influencing more victims to
part with money or
unknowingly commit fraud.

6. Internal Fraud
Types of Internal Fraud
Protecting
The Flock
The most direct fraud threat to the church is internal fraud. It is people within the church stealing. This can occur from the
person collecting the offering to the accountant embezzling from the church. Here are just a few types of internal fraud.
Counting
Collusion
Business
Bribes
Enterprising
Embezzlers
Misappropriating
Ministers
Collusion is when multiple people
take part in a fraud scheme. In this
scenario, a few individuals conspire
to take some of the money prior to
it being booked.
Business bribes include various
kickbacks that church leaders can
obtain through their ownership of
the organization.
Misappropriation occurs when the
funds devoted to one thing are used
for the illicit financial gain of a
person.
The act of embezzlement is a
breach of trust resulting in an
employee illicitly obtaining funds
that belong to the business /
organization.

7. Internal Fraud
The Impacts of Internal Fraud
Protecting
The Flock
Top Church Fraud Events in the
News (2018-2020)
While the most visible impact of Internal Fraud is financial based, this crime is
something that affects multiple aspects of the church family. It places strain
on the relationships within the church as well as the reputation of its
members and leaders. The impacts include:
Church administrator transferred funds from the church's bank
account to personal account, using money to upgrade lifestyle.
Activity was discovered when suspect posed as an auditor and
was caught by church's head pastor.
Financial Impact: $1.2MM over 17 years
Pastor used church credit card to make purchases and cash
advances; additional defrauding of mission funds.
Financial Impact: $800K over 6 years
(victim church had insurance and was reimbursed $500K to
cover some of the losses)
Part-time church treasurer started position the same year they
were filing for bankruptcy. The church authorized them to pay
themselves $125 per month but suspect began embezzling
through various methods, including issuing themselves a check
for $139,000.
Financial Impact: $400K over 14 years
Awkward Positions – with crime exposed in the church, both suspects
and victims are placed in awkward positions.
Financial Hardship – undetected fraud can greatly hinder a church’s
ability to meet financial obligations and flourish.
Loss of Trust – People within the church may question whether they
can trust leadership.
Decline In Membership – Those attending the church may stop going
because of the scandal and the turmoil the fraud event created.
External Negative Reputation – The church receives negative
publicity through the press and social media due to the fraud.

8. Internal Fraud
Risk Factors of Internal Fraud
Protecting
The Flock
Outside of the fraud triangle, there are other risk factors that can increase the likelihood and ease of an internal church
fraud. Below are some examples to consider.
A Small Church with
a Big Purse
A One-man
Accounting Army
Gung Ho
Volunteers
Family
and Friends
Unknowledgeable
Leaders
What is an
Audit?
Suspicions
Ignored
An Apathetic
Church
A smaller church is funded or
supplemented by a larger church
with little-to-no oversight.
One person is put in charge of
church accounting / finances.
Volunteers eager to help with
church finances are not properly
trained and/or vetted out.
Close knit groups of people work
together on church money; creates
a risk of collusion.
Leaders are not educated in
accounting, finance, and/or risk
management.
The church does not audit their
books, leaving many unknowns in
the accounting practices.
Church leadership recognizes red
flags to internal fraud but does not
act (fear of embarrassment,
confrontation, etc.).
A general lack of leadership results
in a total lack oversight that can be
exploited.

9. Internal Fraud
Responses to Internal Fraud
Protecting
The Flock
There are multiple responses that a church can take when an
internal fraud occurs. These responses range from immoral to
moral and passive to active. They include:
• Silence – People look the other way, not wanting any type of
scandal or bad press; activity can continue
• Persecution – Condemnation is made upon the perpetrator
and/or friends and family members
• Parting of Ways – Perpetrator leaves the church without
issue being addressed (“let bygones be bygones”)
• Prosecution and Forgiveness – The church takes the
necessarily legal steps to prosecute the perpetrator; leadership
and the congregation make a conscious effort to forgive
wrongdoer
Parting of
Ways
Prosecution
and
Forgiveness
Silence Persecution
Immoral
Moral
Active
Passive

10. External Fraud
Exposed Church Accounts
Protecting
The Flock
Internal fraud is not the only type of financial crime directed at churches. Criminals external to the church are always
looking for organizations to defraud. Once a church account is exposed, there are various attacks they can use to leach
money from an unsuspecting victim. Here are a few examples of the risks and prevention responses that can be taken.
Checks ACH and Wire Cards Information
Risk: A valid check is intercepted
and used to create counterfeit ones
that drain the churches account.
Prevention:
• Secure checks and bank account
details in a safe location
• Monitor accounts regularly
• Restrict check issuance to
essential payees
If you know your account is exposed, close it and open a new one.
Risk: Unauthorized account access
leads to electronic funds transfers.
Prevention:
• Safeguard bank login credentials
• Monitor accounts regularly
• Work with church’s financial
institution to ensure appropriate
products and access are in place
Risk: An exposed church credit or
debit card leads to charges that the
church did not authorize.
Prevention:
• Limit the number of cards issued
and have a set guideline for usage
• Monitor accounts regularly
Risk: Sensitive church information
is leaked including member details
and payment methods.
Prevention:
• Ensure that vendors used for
church records are highly vetted
• Keep computer networks up to
date on anti-malware / anti-virus
software

11. External Fraud
Church Scams
Protecting
The Flock
Highlighted Threat:
Business Email Compromise
While scams are usually targeted against individual consumers, organizations
such as churches can also fall victim to them as well. To counter this risk, it
is important for leadership to be aware of potential schemes and have a
system of checks and balances to ensure an innocent person does not make
a decision that results in the church losing money. Consider the following
scams that can be leveraged against a church:
Business Email Compromise – an exposed email account leads to the church
sending money to a fraudulent account instead of the intended recipient.
Affinity Fraud – an investment scheme in which the scammer poses as or is
part of a group of people they are trying to scam.
Sob Story Scam – an individual looking for financial help from the church
embellishes or completely lies about their situation.
Equipment and Service Scams – the church engages in a business
transaction with a scammer who does not fulfill their obligation(s).
AZ Church currently supports a mission in a Haitian village. In
this instance the church is focused on getting $25,000 sent to
the pastor to help build a multifunctional facility.
What the church does not know is that the mission’s email
account has been hacked. Cybercriminals have been
monitoring correspondence for months.
It seems innocent when a request is made to transfer funds
to a different account. Even the greeting in the email is
consistent. Not realizing the email and receiving account is
fraudulent, AZ Church sends the money into the waiting
hands of a criminal.
In this case there may or may not be a recovery depending
on whether the new account was drained. The ability to
recover the wire will decrease by the hour. If AZ Church
or the intended receiver of the money do not discover the
fraud after a few days, the money may be gone.

12. Congregational Concerns
Exposed Consumers
Protecting
The Flock
Why does the focus turn from the church being defrauded to consumers? Those
consumers make up church congregations. As such, they lead the giving that helps the
church survive and thrive. If faced with a monetary loss, they may not be able to
prioritize the same tithes and offerings.
In addition to the direct financial loss to the congregant and the indirect financial loss to
the church, the consumer may be facing significant emotional distress. This stress can
increase with the type of fraud the person is dealing with. It is important to respond to
such victim’s in an appropriate way to help them recovery from the event(s).
Check Fraud
Identity Theft
ACH, Wire, and
Emerging Payment
Methods
Card Fraud
Account
Takeover
Data Breaches
Quick Checklist
1) Place fraud alerts with credit
bureaus and get credit reports
2) Report activity to FTC
(Federal Trade Commission)
3) Follow up with local police to
determine if police report
should be filed
4) Contact companies where
accounts were opened; dispute
false charges and close
fraudulent accounts

13. Congregational Concerns
Consumer Scams
Protecting
The Flock
To the right is a variation of the fraud triangle
specific to scam participants. Scammers will
capital on individuals when they are vulnerable
in the following areas:
• Hope or Trust
• Ignorance or Distraction
• Desperation or Greed
Those being scammed also range from being
innocent victims to accomplice level
participants in the scheme. Certain scams will
target specific vulnerabilities.
Ex. – Sweetheart scams target Hope or Trust
Ex. – Lottery scams target Desperation or
Greed

14. Congregational Concerns
Consumer Scams (cont.)
Protecting
The Flock
The extent that scammers will go to gain money from their victims can not be overstated; they will create fake jobs, socialize
free cash, and communicate with their victims for long periods of time. Sweetheart scammers will even arrange fake
marriage ceremonies.
In some cases the victim is using their own money to send funds to the scammer (good funds scam). In other cases, they are
instructed to deposit or receive fraudulent money (bad funds scam). The victim may lose their money or be held liable for
returned funds.
Once “under the ether” of a scam, participants have a hard time realizing they are involved in fraud. Those in their lives who
do see it have the challenge of communicating the risk. Below are some typical consumer scams to be aware of.
Sweetheart Computer Work / Job Loan Soldier Charity Lottery Grandparent

15. Congregational Concerns
Targeted Youth and Elder Abuse
Protecting
The Flock
While criminals may target anyone, special concern should occur for both the young and the old. The church is a great place
to teach and protect at risk individuals on either end of the age spectrum.
Scams
Teens looking to make fast
money, often selling bank
cards or information to
scammers.
• Emotional Immaturity
• Financial Inexperience
• Peer Pressure
• Parents teach internet
safety early
• Youth financial education in
church
Financial
Exploitation
An elderly person is coerced
or deceived into giving money
to the abuser.
• Diminished Mental /
Physical Capacity
• Depression
• Loneliness
• Know your elderly
• Report suspected financial
exploitation to Adult
Protective Services
Youth
Elderly
Top Concern What it Looks Like Actions
Risk Factors

16. Implementing a Fraud Risk Framework
Overriding the Status Quo and Setting up the Church for Success
Protecting
The Flock
The point of all this information is to guide your church to a better, safer place. To do this, a fraud risk framework needs to
be implemented. It doesn’t have to be overtly complex, but it does have to be thought out. In addition, it is something that
the church will need to buy into. Church leadership must override the status quo and implant fraud risk management into
what it does. Consider the following planning steps:
Fraud Prevention Planning Steps
# Step Description
1) Framework Document
Physical document that details the church’s stance on fraud and a general way that it will operate to deter events from
occurring.
2) Risk Assessment
Review of church policies, accounts and account ownership, physical financial security, and cyber security to determine
immediate risks.
3) Prioritization Problem areas are better defined and prioritized to be addressed.
4) Socialization and Education
Fraud Prevention efforts are socialized to key individuals within the church. Church leaders and members are
empowered to prevent fraud by receiving education.
5) Periodic Reviews
The plan is reevaluated periodically to determine new areas of risk and ensure that fraud controls remain in place and
maintain effectiveness.

17. Implementing a Fraud Risk Framework
Operating by Faith and Vigilance and Not by Fear and Ignorance
Protecting
The Flock
When it comes to fraud we can choose to operate in faith and vigilance versus fear and ignorance. It is easy to ignore this
risk, but it is far harder to recuperate after being victimize by it.
What Success Looks Like The Shepherd and His Flock Conclusion and Benediction
May God protect your church and its
congregation from the threat of fraud, as it is
now and as it continues to change.
May He guide your leaders and keep them
committed to their missions. May He reach
those who are lost and stealing, turning their
lives around.
May He use us to spread His name and His love.
May your Church continue to be a light to its
community.
May God help you in
Protecting Your Flock!
Success is the church understanding what fraud is,
the risks that it holds, and the development of
controls and enhanced understanding.
It is Christians getting smarter about personal
finances.
It is empowering the community to identify and
deter scams.
It is not losing $68B a year to church crime!
Psalms 23:1-4 emphasizes how God is our
shepherd.
A flock of sheep is highly dependent on their
shepherd. This passage is talking about a flock that
is taken care of and comforted by that Shepherd.
Likewise, those leading their churches are
shepherds to their flock. This means leading and
comforting them at times. It also means protecting
them.
As you look to use your knowledge of fraud and
implement this education in your church,
understand that your flock needs you.
“The Lord is my shepherd; I shall not want. He makes me lie down in green pastures; He
leads me beside quiet waters. He restores my soul; He guides me in the paths of
righteousness for His name’s sake. Even though I walk through the valley of the shadow of
death, I fear no evil, for you are with me; Your rod and your staff, they comfort me.”

18. Appendix
Protecting
The Flock

19. Church Fraud Risk Assessment
Fraud is a risk to the church, its mission, and its congregations. This brief assessment will indicate what your
church is currently doing successful and what can be done in the future to prevent a fraud event from taking place.
Protecting
The Flock
1) Does your church have a system of checks and balances for those overseeing finances? (Y/N)
2) Does your church implement payment restrictions and methods to only essential personnel? (Y/N)
3) Is church office staff in the habit of shredding unneeded documents and securing financial documents? (Y/N)
4) Is there an established policy on how the church will prevent / report financial crime? (Y/N)
5) Are church computer systems up to date with the latest anti-malware and browser protection software? (Y/N)
6) Are church bank statements reviewed regularly? (Y/N)
7) Are new business partners, missions/charities, and other outside entities researched prior to sending funds? (Y/N)
8) Does church leadership adequately know about scams that can impact the church’s congregation? (Y/N)
9) Does the youth program equip teens to remain vigilant against fraud related risks (internet security, etc.) (Y/N)
10) Is church leadership aware of the signs of elder financial abuse and equipped to report it? (YN)
Scoring: For every “Y” give your church a point:
0-4: Your church may be at high risk for fraud. It is imperative that you take the steps necessary to protect your congregation.
5-7: There are still several things that you can be doing to prevent fraud. Build off what you are currently doing to get to where you need to be.
8-10: Your church is in a good position to prevent fraud. Remain diligent to insure the financial and reputational safety of your church.

20. Contact Information
Protecting
The Flock
For more information on Protecting the Flock and church fraud, please contact Brad Haacke:
LinkedIn: linkedin.com/in/bradhaacke
The full Protecting the Flock resource is available as an eBook on Amazon:
https://www.amazon.com/Protecting-Flock-Church-Prevention-Education-
ebook/dp/B08DMG6VFQ/ref=sr_1_6?dchild=1&keywords=protecting+the+flock&qid=1596997446&sr=8-6