Accused of fraud through affinity

Twenty would-be traders gathered in Cauzae McCall's sprawling south Charlotte home on Friday evenings last year, hoping to become millionaires.

Together, they'd bow their heads in prayer, share a meal McCall's wife cooked and talk money in investment lessons peppered with Bible verses, participants recalled.

As a trader, they could make $1 million a month, McCall proclaimed in a PowerPoint presentation.

“Our No. 1 goal,” reads a slide, provided by one of the participants, “is to make world-class business owners out of ordinary people.”

McCall, a well-dressed, eloquent man who cited Wall Street connections and an Ivy League pedigree, used religious bonds and friendships with area preachers to cheat people out of large amounts of money, former associates, state investigators and court documents allege.

He turned himself in to Union County authorities in April on felony charges related to an investment-fraud scheme alleged to have bilked $250,000 from a Monroe church and its leaders.

Court documents say McCall had been connected to at least one other Charlotte-area church, some of whose members attended the training sessions.

The charges came a month after state investigators seized documents, receipts, computers, a BlackBerry and bank statements from McCall's $1.13 million home in the Providence Plantation subdivision.

The tactics McCall allegedly used fit the description of affinity fraud, where a person preys on members of identifiable groups, such as church communities, a growing problem across the country, authorities said.

It is difficult to know McCall's true motives. He and his attorney have declined to talk to the Observer, and many church members have been reluctant to speak publicly.

Public records show that McCall, 42, was born Tyrone William McCall in Chicago and graduated from Eastern Michigan University in 1990 with a degree in philosophy.

McCall told his training group he received a law degree from Howard University, founded a trading company called MBG Global in 1997 after “an illustrious career on Wall Street with a major investment firm” and “expanded his vision of economic transformation while studying theology at Yale University,” according to the PowerPoint slide.

Howard wouldn't release records without McCall's permission. Yale's divinity school registrar confirmed that McCall attended from 2000 to 2003 but did not graduate. He has not been registered as a broker anywhere in the U.S. for the past two years, the oldest records available, according to the Financial Industry Regulatory Authority.

According to McCall's investors, his business philosophy was “blessing the church by using his knowledge as an attorney to draw up the contracts in such fashion that they protect the church,” the N.C. search warrant said.

But court records paint a different picture.

In Connecticut, where he and his wife, Terrilyn, lived before moving to Charlotte in 2005, authorities found that he had violated state investment rules by issuing securities that were not registered in the state.

He told investors, all approached through church affiliations, that he would use his knowledge and experience in the financial markets to generate high returns, the state's cease-and-desist order says.

In one case, McCall solicited investments from leaders and members of Church on the Rock, a nondenominational church that helps recently released inmates find work, said Jim Heckman, chief of staff of the Connecticut Department of Banking.

Church pastors did not return calls from the Observer. A woman who answered the phone there recently said she knew McCall but declined to comment further.

Connecticut authorities fined McCall and his trading company, called the McCall Business Group, $220,000 each last spring and ordered them to stop conducting business, though McCall was never charged with a crime.

Last July, a Connecticut nurse filed a civil suit against the McCall Business Group, claiming the company owed him $31,000 after he gave it the money and never got it back. A judge sided with the nurse, but the last filing in the case in February showed he had not received the money.

McCall early on developed connections in the church community in Charlotte.

In 2005, he was listed as teaching a class on the biblical basis for financial investments during an annual Baptist convention held at the Westin Hotel, according to the event's Web site. The course examined “the biblical root for financial investment, providing practical and fundamental methods for making the most of your church funds, based on sacred biblical principals,” the site said.

McCall and his wife also donated to charities such as Friendship Trays, which delivers meals to the elderly, people with handicaps and others in need, in 2005, according to the organization's Web site.

In 2007, McCall organized MBG Global and registered it with the N.C. Department of the Secretary of State. According to the N.C. investigators' search warrant, McCall presented himself as an experienced investor, attorney and pastor who historically achieved returns of 36 to 40 percent, using day-trading and other complex investment strategies.

McCall's indictment alleges that he used false promises of high returns to collect $200,000 from the Monroe church, Elizabeth Missionary Baptist, where he had been a member, and $25,000 each from its pastor, Osco Gardin Jr., and a second man between July 2005 and February 2006.

Gardin did not return phone calls or respond to a note left at his office. A woman who answered the phone at the church recently said he'd gotten the messages and did not have a comment.

A woman named in the state's search warrant told investigators that she met the McCalls through a second church and invested last year after McCall spoke of “his desire to increase the wealth of the church and its members so that they may use their proceeds for the ministry,” the search warrant says.

She told investigators she invested $120,000, and that McCall promised her returns of 30 to 100 percent with a minimum guaranteed return of 18 percent. She did not get the investment back, the search warrant says.

The woman and other victims named in the warrant didn't return phone calls or couldn't be reached. They told investigators they had met McCall through church connections, a technique consistent with affinity fraud, authorities say.

“Affinity fraud is an efficient way of marketing a scam,” said David Massey, North Carolina's deputy securities administrator, who said he's seen more such cases in recent years. “The promoter, by working his or her way into a group, becomes identified in the group's mind as ‘one of us.' ”

Often, a fraudster bonds with a church or community leader to help spread the word about his scheme.

“People's guard is down when they're at religious meetings, especially if the promoter is in the good graces of the preacher,” Massey said. “There's a commonality of interest, and when there is, people will tend to tone down the differences they notice and become lulled into a false sense of security.”

Occasionally, investigators can track fraudsters' money through bank accounts or seize homes and cars to return the cash to investors, he said.

But “as a rule, the money is more probably gone,” Massey said.

McCall's indictment alleges he spent investors' money for his personal benefit and on partial payments to previous investors.

One man who attended McCall's training sessions said McCall told the group that, as a Christian, he'd set aside a certain amount of money for charity, but he wanted to grow that sum before donating it.

“When you think about it now, it sounds kind of silly,” the man said in a recent interview near his south Charlotte workplace, asking not to be identified for fear of retaliation.

“But it made sense at the time.”

There were other red flags, such as the McCalls' sparse furniture – training class participants sat on folding chairs during the Friday night sessions – which seemed in stark contrast to their grand home, he said.

According to the state search warrant, the classes continued until fall 2007, when McCall told the group he couldn't continue trading.

McCall is scheduled to appear in Superior Court June 12 on charges of obtaining property by false pretenses and securities fraud.

“He's a spellbinder,” said the former participant. “He's just extremely convincing.”