Schemes and Scams and Fraud, Oh My!


A friend recently sent me a link to a news item titled “Christian radio host sentenced to three life sentences for Ponzi scheme bilking millions from elderly listeners—William Neil ‘Doc’ Gallagher, 80, and his Gallagher Financial Group advertised on Christian radio with the tagline, ‘See you in church on Sunday.’”

According to the state’s attorney quoted in the article, Gallagher, “. . . ruthlessly stole from his clients who trusted him for almost a decade. He amassed $32 million in loss to all of his clients and exploited many elder individuals. He worked his way around churches preying on people who believed he was a Christian.

Many of his victims lost their life savings (including an older woman dying of lymphoma who “invested” $675,000 with him)!

According to reports, this was a Ponzi scheme, which defines as:

. . . an investment fraud that pays existing investors with funds collected from new investors. Ponzi scheme organizers often promise to invest your money and generate high returns with little or no risk. But in many Ponzi schemes, the fraudsters do not invest the money. Instead, they use it to pay those who invested earlier and may keep some for themselves.

With little or no legitimate earnings, Ponzi schemes require a constant flow of new money to survive. When it becomes hard to recruit new investors or large numbers of existing investors cash out, these schemes tend to collapse.

Ponzi schemes are a scam and are illegal as fraud. And we know from scripture that God takes fraudulent activity very seriously:

You know the commandments: ”Do not murder, Do not commit adultery, Do not steal, Do not bear false witness, Do not defraud, Honor your father and mother” (Mark 10:19, ESV).

There are many lessons to be learned from this sad and tragic tale of outright investment fraud. But I want to be clear about something up front: In the world of financial services, there’s a big difference between a fraudulent scam that deceives to steal and sales “gimmicks” and aggressive tactics that salespeople often use in making unsolicited offers of a supposedly high-return but low-risk investment or a high-commission insurance product you may not need.

That said, a tactic common to both fraudulent schemes and aggressive sales tactics is the offer of high returns with little or no risk. It plays to our financial concerns and fears about retirement (inflation, stock market volatility, interest rates, health care costs, long life, long term care costs, high taxes, political and economic upheaval, etc.). It can also be attractive to those tempted by greed.

Therefore, being wise in dealing with aggressive financial salespeople (even if some call themselves things like “advisors” or “investment or wealth managers”) is an essential part of wise stewardship.

If our financial assets have been given to us by God to manage on his behalf, the last thing we want is to be defrauded of them or to purchase or invest in something that we don’t actually need. That’s why vigilance, wisdom, shrewdness, and humility are of utmost importance to avoid becoming a victim (Prov. 10:9, Prov. 12:22, Prov. 13:5, Prov. 13:11, Prov. 15:22, Prov. 27:12, Matt. 10:16).

So, in this article, I focus on investment fraud and how to avoid it. In subsequent articles, I’ll take a look at some of the more common tactics and “gimmicks” used in unsolicited financial and insurance program/product sales pitches for things such as day trading, stock options, and commodity futures trading programs, and investing in gold and silver or cryptocurrency.

And there’s also the ever-popular “free steak dinner and retirement planning seminar” that is usually a precursor to an unsolicited annuity sales pitch. I may also do an article about them and the more conventional subscription investment newsletters.

In addition to discussing the sales tactics used to sell these various products, I’ll also offer some thoughts about their appropriateness and efficacy in helping you meet your retirement planning goals.

But before we continue, I want to say (as I have written many times) that the vast majority of financial professionals are competent, honest, and trustworthy. So, when we get into this territory, we’re talking about a tiny minority that resort to gimmicks and high-pressure sales tactics and even fewer who commit outright fraud.

Furthermore, just because someone actively (or aggressively) markets their financial products or services doesn’t mean they’re out to scam you. Still, it takes just one bad apple to successfully cheat you out of your life savings or to pressure you to buy something you don’t need. That’s what I want to help prevent.

It won’t happen to me

I like the NASB translation of Prov. 27:12 which says, “A prudent person sees evil and hides himself; But the naive proceed, and pay the penalty.” One way to apply this verse is to acknowledge that investment scammers and fraudsters prey on the naive, including those who don’t think they would never be at risk of being scammed.

In other words, if you think you aren’t at risk of being scammed, then you’re more likely to become a victim. Anyone can be caught in a financial scam, but some people are in greater peril than others. And the most vulnerable people are not those most people would expect.

I’m sure that some of Gallagher’s victims, like the woman dying from lymphoma, fit the stereotypical financial fraud victim: a frail elderly person living alone who probably has reduced cognitive functions along with a lot of financial fears (perhaps, in her case, due to severe medical issues). But, statistically, these types of people are more likely to be victims of financial abuse, usually by an unscrupulous caretaker or relative.

Financial abuse (such as a relative taking money from someone’s checking account) is different from investment fraud (such as the Ponzi scheme that Gallagher perpetrated on his victims). Abuse is also against the law, as it is often embezzlement by stealing from financial accounts, often through forgery.

According to the Consumer Financial Protection Bureau, 17 percent of Americans 65 and older have already been the victims of financial exploitation.

But research sponsored by the AARP Fraud Watch Network suggests that most fraud victims don’t fit the stereotype of female, elderly, frail, and cognitively impaired. As it turns out, the most likely financial fraud victims are men age 70 and over! Moreover, a high percentage of fraud victims are solicited by someone in their affinity group.

And the other traits that seem to predispose someone to fraud are a willingness to consider unsolicited sales pitches, take undue amounts of risk for the promise of high returns, and an openness to considering new and unconventional investment opportunities (much like a gambler who continues to take risks to make up for past losses).

Who knew this was a “guy thing”?

Most fraudsters are unknown to their victims, so they depend on their victim’s willingness to work with a total stranger, perhaps someone they meet only via phone or email. Gallagher, who operated much like a sexual predator, gained trust by attending churches. He used that in combination with his book and radio show to build trust with people he didn’t previously know. (This is typical of criminals who prey on churchgoers who, as a group, tend to be welcoming, accepting, and trusting of strangers.)

The other thing that makes people susceptible to financial fraud, scams, and sales gimmicks is making decisions based on fear or greed. Manipulative financial salespeople try to trigger emotional reactions that can lead to a buying decision. That reminds me of this sales pitch from a life insurance salesperson to a hesitating customer: “Don’t let me frighten you into a hasty decision. Sleep on it tonight. If you should wake in the morning, call me then and let me know.”

Generally speaking, older people are more susceptible to fraud than younger people are. And it doesn’t matter whether the emotion is positive (such as excitement or hope) or negative (such as anger, fear, or greed). Heightened emotions are more likely to lead to bad money decisions among older people, perhaps because their cognitive ability to process things rationally is less.

Schemes and scams = fraud

The following are some of the tactics and schemes Gallagher probably used to take advantage of his victims. (We have limited details on what he sold and how he sold it.) I will also offer some recommendations for how to combat them.

1 – His victims did not find him; he found them

Gallagher likely approached his potential “victims” about investing with him, not the other way around. He probably exploited relationships he had in the churches he attended. Because of the natural trust within affinity groups such as church attenders and members, he took advantage and committed what is sometimes called “affinity fraud.” He may have done this in seemingly innocent and even altruistic ways by offering church classes or seminars or “free” evaluations of a person’s investment portfolio.


It’s best to be very careful when you receive an unsolicited investment offer. Whether from a total stranger or a friend, trusted co-worker, or even family member, always consider the motivation of the person offering the investment. Fraudsters often exploit the trust and friendship in groups of people who have something in common (affinity fraud). You should be especially suspicious if you are told to keep the investment opportunity confidential or a secret.

Another remcommendation is to seek counsel from someone you know and trust before making a significant investment. If you don’t have a trusted long-term financial advisor, you could ask friends or relatives with general knowledge and common sense about investing. If your church has a stewardship pastor or deacon, they could be a good option. Ask them whether they would invest or purchase and why or why not.

2 – He tried to legitimize himself through conventional means

According to the news reports, he had a local radio show, church involvement, made public professions of faith, a professional-sounding company name, and other things that seemed to legitimize him as a reputable, competent, and trustworthy financial professional. Since he had not been licensed for many years, he probably made false claims about his professional background and licensures or certifications to suggest that he has had a successful career in the industry.


Be wary of suspicious or unverifiable backgrounds of investment managers or salespeople, especially those who seem to be working alone (see #6 below). Although untrue, fraudsters may claim to have had an extensive background in the industry to appear legitimate.

Please don’t believe everything the salesperson tells you about their background. Do some research to independently verify their claims, including asking for a reference or doing a simple Internet search. And even if they’re legit, if they have little or no real experience, that should be a red flag as well.

3 – He probably promised high returns with low or no risk to invested principal

It’s not clear from the news report, but it is reasonable to assume that Gallagher promised high returns with little or no risk to principal, which is a classic warning sign. That’s probably the most often used tactic when a scam or fraud is being perpetuated. Such claims appeal to those who want to “get rich quick,” but they can also tempt those behind in saving who have become fearful and can be tempted by a shortcut to catch up.


First and foremost, make sure you understand what you are being asked to invest in. You need to know the level of risk and whether it makes sense relative to your risk tolerance (which is an emotional thing) and risk capacity (which is more of a stage-of-life thing). All investments carry some amount of risk, and generally, the greater the potential return, the greater the risk. Beware of anyone who promises otherwise.

Also, beware of any investment which seems vague or too complex to understand, especially if the salesperson says that the specifics are too technical or difficult for the average person to comprehend. As Dave Ramsey often says, “don’t invest in it if you can’t easily explain it to your spouse.”

4 – He appeared legitimate but was an unregistered/unlicensed investment professional

Gallagher had previously been a licensed financial advisor. Still, according to investigators, he had not been licensed for many years and was not affiliated with any firm (other than his own business—the so-called “Gallagher Financial Group”—a “group” of one, apparently).


This one is related to #2 above. Statistically, most frauds are perpetrated by unregistered/unlicensed individuals. Therefore, it’s a good idea always to use FINRA’s BrokerCheck to ensure that the person has the proper credentials, even if you know them and otherwise trust them. If you do a check, you can also find other things about their background, qualifications, and disciplinary actions.

5 – He likely used aggressive sales tactics

Seemingly sophisticated, complicated, and esoteric financial products are usually sold, not bought, so Gallagher was likely aggressive with his sales tactics. He may have used the “fear of missing out” (FOMO) tactic to pitch something like a “once-in-a-lifetime” offer to create a false sense of urgency. The fear factor can show up in other ways, such as when salespeople exaggerate reasonable concerns (such as long term care) to create fear of not being able to get care or running out of money in retirement (to generate a fear of financial ruin), which can cause someone to invest hastily out of emotion.


Be on guard for these tactics and aware of your emotional state, especially if they seem to be amping up your emotions. If you feel excited, angry, fearful, or have other strong feelings, slow down. And if the salesperson is asking for a quick decision, resist such high-pressure techniques. Then, take the time to thoroughly research and investigate both the salesperson and the product before going any further. That will also give you time to get your emotions in check, get more information, and seek out unbiased counsel if you need it.

6 – No one else seems to have been involved

The news reports mention no other partners (or should I say accomplices), so “Doc” seems to have had no PAs or nurses (sorry for the sarcasm). Even independent investment advisors have an office support staff and are typically affiliated with a broker/dealer to handle their “back office” operations.


Researching the background of the salesperson is the best way to determine who they really are and who or what they are associated with if anything. Most reputable investment professionals are related to identifiable firms or companies and have other associates and staff that they work with.

7 – His offices were probably a sham (and he did most of his business out of his car)

Some fraudsters may maintain a nice office for “respectability,” but most operate out of virtual offices or no office at all. According to court records, after Gallagher was arrested in 2019, his personal offices were in “disarray and disorder” with “over a decade of business records and unopened mail scattered and stacked randomly throughout the office and additional suites.” He apparently kept a lot of paperwork in his car and didn’t appropriately account for his victim’s investments.


Again, researching and investigating is the best way to determine whether the salesperson has a legitimate business office or a “virtual” office with an address in a state because it is an illegitimate operation. Be careful if it is a PO Box without a verifiable physical address (headquarters, regional office, or other physical operations).

Get wisdom

You probably don’t have a “Doc” Gallagher in your church just waiting to pounce on you with a too-good-to-pass-up yet fraudulent investment scheme. But you might.

It’s more likely that you will be approached by a commissioned broker or insurance rep instead to sell you a legitimate investment or insurance product.

But it’s also possible, not unlike “Doc,” that they may attempt to subtly or (not so subtly) use some of the same sales tactics to get you to sign on the dotted line. Salespeople are trained to know which tactics I alluded to above will most influence certain types of people.

The best thing to do is to stick to tried-and-true investment and insurance products. If you need something out of the ordinary, use unbiased information resources to help you make an informed investing or purchase decision. That could mean doing background checks, researching the product or investment on your own, staying abreast of the latest new products or scams, and getting a second opinion from someone you trust.

The SEC’s website is a good starting point. But most of all stay vigilant and seek wisdom in all financial decisions—Gallagher was a wolf among sheep, so “Get wisdom, get understanding. . .” (Prov. 4:5) and “. . .be wise as serpents and innocent as doves” (Matt. 10:16).


👋 Hi, I’m Chris Cagle, the founder of Retirement Stewardship, a blog that focuses on the various aspects of retirement from a Christian stewardship perspective (1 Peter 4:10).

I write as a retiree who is dealing with the things I write about. I base most of the articles on my research and experience applying it to my situation and how it might apply to yours.

If you’re new here, check out the site introduction for an overview. You can also learn more about me.


My Books

Redeeming Retirement: A Practical Guide to Catch Up (2021)
The Minister’s Retirement (2020)
Reimagine Retirement: Planning and Living for the Glory of God (2019)