SEC Obtains Relief in Affinity Fraud Case Targeting Christian Investors

Defendant Alanar was a Sullivan, Indiana-based broker-dealer controlled by four members of the Reeves family. They used it to conduct an “affinity fraud” against investors of the Christian faith, raising over $120 million from investors in church bonds and over $50 million from investors in dozens of bond funds that were also named in this action. Rates of return were misrepresented and investor proceeds were misused, including, for example, the diversion of $8 million worth of church funds held in trust for the repayment of bondholders into an online brokerage account. The Reeves were subsequently charged with 10 separate felony counts by the State of Indiana.