Who was the Texas pastor who 'exploited their faith in God' and defrauded about 200 people out of about 3.7 billion yen in an investment scam?
The Texas Preacher Who Used God to Steal | Bloomberg Investigates - YouTube
SEC.gov | William Neil 'Doc' Gallagher, Gallagher Financial Group, Inc., and W. Neil Gallagher, Ph.D. Agency, Inc.
https://www.sec.gov/enforcement-litigation/litigation-releases/lr-24420
Gallagher was a Christian radio host calling himself 'Money Doctor' and promoted his own investment business on the radio and in books. As a result, Gallagher's business was actually a Ponzi scheme, a type of investment fraud that defrauds investors without managing the funds they invested, so he was arrested in 2019 and convicted in 2020 and sentenced to life in prison. Lori Varnell, chief of the Elderly Financial Fraud Team at the Tarrant County District Attorney's Office in Texas, said, 'Money Doctor Gallagher is one of the worst criminals I've ever seen.'
Gallagher purchased slots on AM radio and Christian radio stations, calling himself a former pastor and a Christian, and promoting his investment business. Gallagher has also published a book called '
In an interview with Bloomberg, the victims at the time, James and Carol Herman, said, 'We trusted Gallagher because he said he was a Christian.' As a couple, Herman and his wife are Christians, so they decided to invest in him, believing his message that they wanted to help people 'have the best retirement and live their best life' that they heard on their car radio. Herman said that when investing, he carefully investigated whether Gallagher was a trustworthy person, but even after searching the Internet, he found no bad information about him.
The Hermans received direct guidance from Gallagher, who visited their home, and decided to deposit almost all of their savings, $750,000 (approximately 100 million yen), with Gallagher. The Hermans were spendthrifts, so by depositing their money with Gallagher, they wanted to curb their waste and save for future funeral expenses. After that, they received a check of $5,000 (approximately 770,000 yen) every month as a 'dividend.' This is the trap of a Ponzi scheme; it is easy to believe at the beginning because you actually receive dividends, but in reality, they are not investing and are just diverting the funds invested, so the scheme will go bankrupt at some point and no one will be able to recover their original investment in the end.
A few months after investing, Herman retired from her job as a nurse due to an injury, and the amount of monthly dividends she withdrew had to be increased. When they checked how much was left, they found that the investment had not increased the amount from the $750,000 they had paid, nor had it decreased due to failure, and the balance had not changed even to the cent even after several months. This made the Hermans realize that it was a Ponzi scheme. Around that time, when they met Gallagher again, they found that he had once been kind enough to be concerned about the Hermans' health, but after Herman's suspicious attitude towards the investment, Gallagher had become aggressive, as if he was only thinking about protecting his business, Herman said.
Steve Richardson, a police inspector in the Texas Police Department's insurance division, was approached by a grandson representing an elderly man with dementia and began investigating Gallagher's suspicious involvement with the elderly man's insurance money. When he examined bank records, he found changes in deposit amounts typical of a Ponzi scheme.
A full investigation was launched and it was found that Gallagher's Ponzi scheme had been running for about 10 years. However, Richardson said that banks are only required to keep records for seven years, and they were unable to prove all of the fraudulent records. All of the victims were elderly people between 62 and 91 years old, some of whom had fallen ill with life-threatening illnesses and suddenly needed to get their money back. With Gallagher's fraudulent activities confirmed, the police occupied Gallagher's office and arrested everyone, including the employees.
Galaga also had what police call a stash house, where he kept his supplies, and a safe was discovered during the investigation after his arrest. However, when the safe was opened, it was found to be completely empty, and he was unable to properly return his victims' investments.
Journalist Chris Pomorski interviewed Gallagher after he was arrested and sentenced to life imprisonment. When Pomorski asked him, 'Why do you think you were able to captivate people with your radio shows and seminars?' Gallagher responded, 'They may have been shocked later to find out I didn't have enough money, but they knew I cared about them (so they trusted me).' Pomorski said, 'Gallagher continued to believe that he genuinely cared about people, even though he was actually committing investment fraud.'
Gallagher is known to have defrauded about $24 million (about 3.7 billion yen) through investment fraud, and according to reports, he has defrauded about $38 million (about 6 billion yen) through investment fraud. Of that, at least $21 million (about 3.3 billion yen) is still missing and has not been returned to the victims. Gallagher is scheduled to be released on parole in 2025 after serving a six-year sentence.
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