Securities Bulletin

              SECURITIES bulletin
Beware of individuals invoking the name of
God to lure you into risky investments. The
story on James Upshaw and how he
defrauded his victims is not unique. Over
the years, many con artists in Illinois have
been sent to jail for using religion to steal
from innocent church members and even
church leaders.
Cloaking an investment in religion gives a
false sense of safety. People are willing to
give money to fellow church members
because they believe that those fellow
members can be trusted. As the Upshaw
case demonstrates, that is not always true.
Consumers can protect themselves from
affinity fraud by heeding warning signs. Con
artists who use religion in their schemes
often predict imminent financial or social
crisis, claiming they will reinvest a portion of
their profits in worthy causes. They equate
faith in their scam to religious faith. Scammers
often persuade church members not to
report the scheme to authorities and to have
faith that they will get their money back.
As with any other investment, please check
the facts before investing. Has the seller
provided written information that explains
the investment, and do the statements in
the material check out? Is the seller
registered with the Illinois Securities
Department? Call the
Securities Department at
800-628-7937 before you
invest. One simple call
could save you a lifetime of
savings.
Jesse White
Secretary of State
WINTER 2006
A Chicago-area man who used his religious ties with pastors and
fellow church members to snare 144 victims in nine states with
promises of big investment returns has been sentenced to 7 1/2
years in prison.
Holding himself out as a preacher, praying during presentations
and implying that his investment decisions were communicated to
him by God, James E. Upshaw of Oak Park duped his victims into
investing $6.5 million with him between 2001 and 2004. Only
about $80,000 of the $6.5 million actually was invested. Upshaw
paid early investors using money from new investors, a classic
pyramid scheme. However, his failure to invest the money and his
lavish lifestyle eventually caught up with him and his checks to
investors started bouncing.
Upshaw operated Upshaw and Associates, LLC, in Westchester,
which provided tax return preparation, consultation services and,
after 2001, investment advice. He would pitch one of several
purported investment vehicles to unwitting victims, including
investments in commodities, commercial paper and silver and gold.
"This case shows how important it is to research investments and
the people selling them, no matter who they are," said Secretary
of State Jesse White. "Unfortunately, this man used his position in
the church to defraud people who trusted him.”
The case was originally referred to the Attorney General's office by
Secretary of State Jesse White’s Securities Department. The
Attorney General’s office separated the multiple felony charges
into two different indictments because one of the cases involved
Upshaw promising to represent a victim in a tax matter Attorney
General Lisa Madigan was involved in with the Internal Revenue
Service, which was different from his other crimes. In that case,
Upshaw failed to provide the woman with the representation, and
also stole the money she gave him to pay the IRS.
While the Attorney General's office is seeking restitution for
investors, at this time there are no known assets with which to
repay victims the roughly $3 million they are owed. In a civil case
last year, the federal Securities and Exchange Commission seized
Upshaw's home and other assets.
Investment “preacher” sentenced to prison
IN
THIS
ISSUE
• INVESTMENT “PREACHER” SENTENCED TO PRISON •
• FAQ: INTERNET AND E-MAIL SCAMS •
• TROOPS AGAINST PREDATORY SCAMS •
• ENFORCEMENT ADMINISTRATIVE ORDERS •
• RENEWALS HIT RECORD LEVELS FOR 2006 •
A NEWSLETTER OF THE ILLINOIS SECURITIES DEPARTMENT • SECRETARY OF STATE JESSE WHITE