[Vision2020] Is there something familiar here?

[Art Deco]

     Thursday, October 19, 2006 


Fleeced flock wants money back 
Preacher must repay investors or face fine
Becky Kramer 
Staff writer
October 19, 2006

An itinerant preacher from Post Falls used his status as a man of God to swindle investors out of $100,000, according to the Idaho Department of Finance.

Michael R. Shaw visited evangelical congregations all over the country, encouraging the pastors and parishioners to invest in "Shattered Dreams and Broken Hearts," a book he purportedly wrote in the mid-1990s and planned to re-release. More than 20 people ponied up cash, lured by promises of a fourfold return within 12 months.

Instead, the money enriched Shaw, state regulators said.

     
The 55-year-old preacher - who calls himself "Doctor," though he doesn't have a divinity degree - has neither admitted nor denied guilt. Last week, he signed a consent decree agreeing to make a good faith effort to repay investors. But that will be hard, Shaw told Department of Finance officials, because he's broke. If he doesn't repay the money, Shaw could be fined $25,000.

Shaw could not be reached for comment Wednesday. The phone number for an East Shoreline Drive residence, where he lives with his wife, Rosemary, is unlisted.

According to state documents, Shaw has operated as a freelance evangelical minister for three decades. He represents himself as the president and chief executive officer of Michael Shaw Ministries. 

About three years ago, Shaw began seeking investors for his book venture. Shaw used his status and influence as a preacher to identify prospective investors, "invoking prayers and blessings" upon people interested in the deal, according to the consent decree. 

Shaw represented the book deal as a low-risk venture, telling investors that distribution of the book was imminent, state officials said. He led multiple investors to believe that a previously committed investor had backed out at the last minute, and that Shaw had chosen them (the new investors) as the replacement, according to the consent decree.

Shaw also told at least one investor that he had a Christian music recording contract, state records indicated. 

However, he failed to inform investors of his financial problems, including a past bankruptcy and outstanding debts, officials said. Money invested in "Mike Shaw Ministries" was used for Shaw's personal benefit, not the printing or distribution of the book, the consent decree said.

Two investors from Puyallup, Wash., sued Shaw last year, each trying to get their $4,000 back.

State officials said Shaw perpetuated another scheme at the churches he visited, writing checks to members of the congregation in return for cash advances. More than 400 checks written on the Mike Shaw Ministries account bounced over a two-year time period, the consent decree said.

People need to scrutinize business opportunities before handing over their money, said Jim Burns, investigation chief with the Department of Finance's Securities Bureau. 

"We can help them figure out what questions they should be asking," he said.

Before the end of the month, Shaw must provide state officials with a financial statement listing his assets and debts. He must also update the Department of Finance four times per year on his efforts to repay investors. If department officials aren't satisfied with Shaw's progress at the end of two years, they will fine him $25,000.
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