The Foundation for New Era Philanthropy was a Ponzi scheme that operated from 1989 until its collapse in 1995 after having raised over $500 million from 1100 donors and embezzling $135 million of this. Most of the money was stolen from Christian religious organizations and charities in the Philadelphia, Pennsylvania area. The scheme was publicly discovered by Albert Meyer, an accounting teacher at Spring Arbor College and the auditing firm Coopers & Lybrand working with its client, a local religious college in Los Angeles who suffered no loss in its participation.

Origin

The Foundation was founded by John G. Bennett Jr., a prominent Christian businessman from the Philadelphia area who had previously run a variety of different entities, including some Pennsylvania state drug education centers and a corporate training business.

In 1989, Bennett invited several Christian friends to become "beneficiary donors" in a new organization he was founding.

His friends obliged by giving him various amounts, which Bennett used to pay his bills. He was able to pay them their doubled funds in January 1990 by tapping a payment made to a consulting business he ran on the side. This was the last "real" income paid to investors. To have funds ready to pay off the climbing number of deposits, he increased the minimum "contribution" to $25,000 and lengthened the minimum waiting period. Different donors were told different things; over time the waiting period grew from six to nine to ten months. The number of anonymous donors, anonymous benefactors, and anonymous philanthropists also varied, though Bennett eventually settled on claiming to have nine of them.

Partial list of investors

Charities

Per MinistryWatch, "the list of ministries involved with New Era... read like a Who’s Who of evangelical organizations."

  • United World Mission, $1.45 million
  • University of Pennsylvania, $2.1 million
  • Wheaton College, Wheaton, Illinois, $4.6 million

Donors

  • George F. Bennett Jr., Boston, $3.3 million
  • Peter Ochs, ( address unknown ), $3.2 million
  • Buford Television Inc., Dallas, $3 million
  • Henry F. Harris, Wyndmoor, Pa., $3 million
  • Westwood Endowment, Indianapolis, $2.8 million (less than $280,000)
  • Don Soderquist, Rogers, Ark., $2.8 million
  • William Kanaga, Orleans, Mass., $2.4 million
  • Henry W. Longacre, Souderton, Pa., $2 million
  • Whitehead Foundation, New York, $2 million (about $1 million)
  • Amelior Foundation, Morristown, N.J., $1.9 million

References

Other sources of information

  • Lessons From New Era, Oct 1, 1998
  • Prudential Securities lawsuit announced
  • United Methodist News Service March 31, 1997
  • United Methodist News Service September 5, 1996
  • Christianity Today, October 27, 1997
  • Philadelphia Inquirer January 6, 1998
  • Washington Post May 18, 1995