Affinity fraud is a form of financial fraud that relies on social connections and trust. It most often occurs within identifiable groups, such as religious, cultural, or ethnic communities, or social organizations, where members share common values, experiences, or identities. Rather than approaching targets as strangers, those promoting the scheme position themselves as insiders, using familiarity and perceived credibility to create comfort and reduce skepticism.

Ponzi schemes and affinity fraud frequently overlap because both exploit trust and social interactions to operate effectively.

A Ponzi scheme is an investment scam that induces people to invest money in a business or investment vehicle with promises of high returns and minimal risk. Rather than earning profits through actual investments or legitimate business operations, the scheme functions by paying early investors with money contributed by new or repeat participants.

Today, we examine an enforcement action brought by the SEC involving a Ponzi-like scheme that targeted retired senior citizens that the defendant met through his church community