21
Uncovering the Hidden Face of Affinity Fraud
Race-Based Predatory Bias, Social Identity, and the Need for Inclusive Leadership
AUDREY MURRELL, RAY JONES, and JENNIFER PETRIE
Affinity fraud is often described as exploiting group trust based on shared affiliations or common social characteristics, such as race, religion, ethnicity, age, or professional designation, for the purpose of financial advantage or gain (Perri & Brody, 2012). In affinity fraud, an offender uses identification with a targeted group to gain the trust of group members. Because social identity plays a central role, fraudulent or unethical practices can spread quickly due to positive feelings of affinity among individuals. Some argue that the impact of affinity-based fraud can be more devastating than that of non–affinity fraud or schemes. For example, one estimate over a ten-year period is that there were more than three hundred sizeable Ponzi schemes with combined losses for investors of more than $50 billion. It is estimated that over half of these cases were affinity based (Marquet International, 2011). One of the largest Ponzi scheme offenders in history, Bernie Madoff, relied on his affinity with Jewish clients and wealthy investor circles to scam an estimated $20 billion from clients (Marquet International, 2011). Affinity fraud continues to have detrimental effects on the American consumer; the Federal Trade Commission indicates that an estimated 10.8 percent of all US adults are victims of fraud, with many crimes relying on group trust (Anderson, 2013). Understanding how affinity fraud reflects the negative use of kinship or social identity based on demographic characteristics such as race, ethnicity, religion, or social class is the focus of this chapter. This analysis is important for revealing how the impact of affinity-based fraud is often ignored or mischaracterized as a function of unsophisticated consumers who lack financial literacy. We argue for the need to develop inclusive leadership to help address and ultimately prevent this type of predatory bias and its consequences within business and society.
We focus in particular on race-based affinity fraud targeting African Americans, as it provides a strong example of how negative aspects of social identity characteristics can play a key role in affinity fraud cases. Researchers indicate that marginalized and racialized groups such as African Americans experience more harm from affinity fraud, necessitating more proactive investigation and intervention (Austin, 2004; Federal Trade Commission, 2016). To better understand race-based affinity fraud, our chapter describes three specific case examples of how affinity fraud infiltrated African American groups, as explained by three mechanisms of social identity theory: ingroup favoritism, outgroup derogation, and positive distinctiveness. We then discuss the potential impact of inclusive leadership as a critical intervening factor that can help address race-based affinity fraud. This perspective complements previous literature that advocates for regulatory enforcement, consumer education, and individual behavioral change to combat affinity fraud (Austin, 2004; Bosley & Knorr, 2016; Fairfax, 2003; Federal Trade Commission, 2016; Kramer, 2009). We argue that principles of inclusive leadership can also serve to influence individual, group, and organizational behavior in such a manner as to help reduce predatory biases, such as identity-based affinity fraud, that negatively affect African Americans and other racial/ethnic groups.
This work is important because one of the great dangers of affinity fraud is that it works by undercutting the standard respect for inclusive and ethical practices that should be supported, modeled, and upheld by leadership within organizations (Bucy, Formby, Raspanti, & Rooney, 2008). In legal and public policy assessments of how to prevent affinity fraud, most authors offer technical approaches based on developing awareness of investment practices and recognizing investment opportunities that are “too good to be true.” With race-based affinity fraud, a purely technical approach would not address the powerful social and psychological aspects of the fraud that often lead victims to take an active and (even) willing role in the fraudulent activities. This is a leadership challenge that requires far more than just technical knowledge of investments. Thus, we assert that principles of inclusive leadership can play a critical role in preventing and addressing the negative consequences of race-based affinity fraud. This is consistent with previous work that has outlined practical steps for individuals to be vigilant against biases that may render them victims of manipulated trust (e.g., Kramer, 2009). We suggest that while affinity and identity processes within racial and other social identity groups can be manipulated or exploited, these contexts may serve as a unique opportunity for inclusive leadership to have a positive impact in reducing the negative consequences of this type of predatory behavior.
Race-Based Affinity Fraud and African Americans
Previous work shows that affinity fraud disproportionately targets racial identity groups such as African Americans based on community and ethnic connections (Austin, 2004; Federal Trade Commission, 2016; Khasru, 2001). African Americans are more likely to be fraud victims, at 17.3 percent compared with 13.4 percent of Hispanics and 9 percent of non-Hispanic Whites (Anderson, 2013; Federal Trade Commission, 2016). Affinity fraud exacerbates financial obstacles for African Americans, as they already encounter higher rates of fraudulent practices, such as predatory subprime loans, even when controlling for income and risk factors, such as credit score (Fisher, 2009). It is also the case that African Americans are the targets of predatory investment schemes by those who leverage a common group identity within the African American community. These unethical individuals frequently claim solidarity with African Americans and frame their financing as combating the historical racial oppression in mainstream financial institutions (Austin, 2004; Sargsian, 2012). They successfully commit fraud by tapping into the religious social justice beliefs that are highly valued within African American communities, such as a belief in efforts to overcome past injustices or improve the financial condition of the oppressed (Austin, 2004). African Americans are also less likely to report being victims of affinity fraud due to the bonds of ingroup trust and a proclivity to distrust law enforcement and government as the outgroup. The reluctance to report affinity fraud frequently hinders investigation, prosecution, and prevention (Austin, 2004; Bosley & Knorr, 2016; Federal Trade Commission, 2016; Perri & Brody, 2011).
On a macrolevel, affinity fraud renders more harm for African Americans compared with Whites. The negative financial and psychological effects of fraud and betrayal, which all victims experience, are compounded by detrimental and stigmatizing effects specific to African American communities (Austin, 2004; Fink, 2009). As African American communities often self-finance through charitable giving and community investment in local nonprofit organizations and African American churches, affinity fraud erodes both resources and the communal system of trust that brings African Americans together to fund community organizations and missions. Austin (2004) argues that affinity fraud is a crime perpetrated not just on the individual but on the community as a whole. Thus, race-based affinity fraud is a crime against the social fabric of trust that binds African American communities together that can stifle positive community transformation.
Some argue that affinity fraud is particularly egregious to African Americans because of persistent financial vulnerability. African Americans have low rates of proactive investment compared with non-Hispanic Whites at every income quartile (Brown, 2007). At the highest income quartile, 26 percent of African Americans own stocks, compared with 56 percent of Whites (Brown, 2007). At the lowest income quartile, Whites own stocks at a percentage ten times greater than African Americans (Brown, 2007). The affront of affinity fraud perpetuates the reluctance of African Americans to trust and invest in the stock market (Austin, 2004; Bosley & Knorr, 2016). The consequences disenfranchise African Americans from the economic gains available in capital investment even as their rates of discretionary income increase (Austin, 2004; Brown, 2007). The positive growth in African American disposable income has also become an incentive for perpetrators of race-based affinity fraud (Austin, 2004). Across all income and education levels, African Americans remain vulnerable to targeted schemes based on racial group identity.
This targeting has not gone unnoticed, as the high prevalence of fraud among African Americans recently prompted the Federal Trade Commission to enhance prevention and reporting of African American fraud cases (Federal Trade Commission, 2016). In addition, the Federal Trade Commission and academics called for additional research on fraud across race and ethnic groups, specifically regarding schemes targeting African Americans (Austin, 2004; Federal Trade Commission, 2016; Marlowe & Atiles, 2005). Thus, it is essential for us to explore key factors that influence race-based predatory biases, such as affinity fraud targeting African American consumers and communities. In order to accomplish this, we describe three actual cases of race-based affinity fraud and examine how social identity processes operate to explain these types of predatory practices. Harrington (2017) makes the case that Americans are vulnerable to fraud because we shield our children from knowing the negative outcomes of trust and silence discussion of fraud and affinity-based deception. As parents, leaders, and community members, we bypass critical ethical discussions in favor of the flawless American dream narrative (Harrington, 2017). However, in order to combat the negative effects of race-based affinity fraud, we must examine the underlying mechanisms that facilitate affinity-based deception and its negative consequences for African American individuals and communities.
Affinity Fraud: A Social Identity Theory Perspective
Developed by Tajfel and Turner (1979), social identity theory outlines the process and consequences of categorizations of individuals into various social groups. This social categorization significantly influences how individuals evaluate themselves and others in terms of either ingroup or outgroup membership. A key motivating factor is the individual’s effort to maintain a positive social identity that is reinforced by positive self-esteem and group distinctiveness. These processes drive how group membership is both defined and valued, as well as the nature of intergroup behaviors and interactions within an organizational context (Ashforth & Mael, 1989).
First, social identity leads to category accentuation in that people often exaggerate or enhance the similarities of people within their ingroup in positive or beneficial ways. This is often labeled as a preference for characteristics of one’s own group, or ingroup favoritism. Some argue that rather than a negative perception of non–group members, ingroup favoritism is an enhancement of positive group-based self-esteem (Hogg & Abrams, 1990). Second, a threat to identity creates a need to regain positive ingroup status, which can often be achieved by devaluing other social groups, a process known as outgroup derogation (Turner, 1975). Since outgroup derogation is purely a social process, the criteria for comparison, the evaluation of relative status, and the overall outcome of the comparison process are driven by the individual’s subjective belief systems and the strength of his or her own social group identification. Third, when individuals categorize themselves and others into social groups, there are cognitive processes that enhance the differences between social groups in a manner that both defines and maintains one’s own positive group identity (Brewer & Gardner, 1996). This positive distinctiveness is a social comparison process in which features and dimensions that define one’s ingroup are evaluated more positively than others within the outgroup (Tajfel & Turner, 1979). In extreme cases, positive distinctiveness can drive intergroup discrimination by establishing, maintaining, and maximizing differences between social groups (Brewer, 1991; Brewer, 2007; Pickett, Bonner, & Coleman, 2002).
These three key principles of social identity theory are relevant for helping to explain race-based affinity fraud. Ingroup favoritism, outgroup derogation, and positive distinctiveness can arguably play a role in better understanding how affinity fraud can intensify historical racial barriers that are salient and impermeable within a US context. For example, research on the impact of media in making racial categories salient shows that movies with African American leading actors frequently fail in their appeal to larger, mixed-race audiences (Weaver, 2011). The recent success in 2018 of the movie Black Panther is a noteworthy exception (Huddleston, 2018). The marginalized appeal of movies with leading African American actors explains the impact of media as a function of the combined effects of identity salience, ingroup bias, outgroup derogation, and the need to maintain positive distinctiveness associated with racial group status. Thus, it makes sense to explore the ways in which actual cases of affinity fraud can be understood as a function of social identity processes that lead to predatory biases and outcomes based on social category, specifically race.
Affinity Fraud as Ingroup Favoritism: The At-Risk Youth Sports Program
James Brown and Darnell Jones targeted African American athletes in high schools in Aiken, South Carolina (Keating, 2011). They gained credibility within communities with a strong sports culture because of their reputation and fame as professional athletes. In addition, they used stories of previous professional players who were either bankrupt or under financial stress after retirement to provide credibility and appeal to their youth sports program. They especially targeted young athletes and their families, seeing them as highly trusting and most likely to form a bond with Brown and Jones, since the men came from disadvantaged communities yet achieved success in the sports arena. Thus, they positioned the Summit Management Company as a financial service company targeting African American athletes, mostly in high school and all from low-income areas (Keating, 2011).
They wore expensive suits and drove Lexuses to high school sporting events and talked openly about how they used sports to change their social and economic situations, taking their own families out of economic hardship. Their own financial wealth made these appeals very attractive. Thus, they singled out athletes who came from low-income homes and approached each high school athlete with expensive athletic shoes, tracksuits, and gifts to family members. After gaining the athlete’s trust, they then promised to help the athlete through the process of turning professional, signing contracts, and managing their finances. They also stayed in contact with each of the athletes and talked with them through the ups and downs of their attempts to play at a high level in professional sports (Keating, 2011). Ingroup favoritism was leveraged by using current clients’ families to connect with future athletes and their families so the pipeline of victims was maintained.
All the while, Brown and Jones were using the money from the various professional contracts that they negotiated and the subsequent bonus and contract money that they controlled for the athletes to fund their expensive lifestyles (Keating, 2011). They charged exorbitant fees to clients and moved funds around, often draining the accounts of their young clients. There were no financial accountability measures in place, and many described their actions as nothing more than a pyramid scheme. The power of their scheme was based on the strength of young athletes’ identification with these two men as African American athletes from poor backgrounds who became successful. However, stories of the devastating impact of their schemes on these athletes and their families soon became visible. When one victim received notice that his mother’s home was in foreclosure, it was explained away by Brown and Jones as simply an “accounting error.” However, the reality is that her mortgage had not been paid and the money the athlete earned playing sports was laundered through bogus credit lines, leaving the athlete and his family bankrupt. When reported to the FBI, Brown and Jones went into hiding, and it was several years before the fugitives were found and charged. They were convicted in federal court on fifty-six counts of fraud and money laundering but cut a deal in which Brown would serve twenty-one months in prison and Jones, forty-one months. However, the damage to the victims’ savings, reputation, and financial history could not be reversed. Most victims received only meager financial payments because the money entrusted to Brown and Jones was already gone. Jones was ordered to pay a total of $1,817,537.50 in financial restitution at monthly payments of $250. This means that he would finish paying all penalties to their victims in the year 2609 (Keating, 2011).
Affinity Fraud as Outgroup Derogation: The Financial Warfare Club
The Financial Warfare scheme from Marcus Dukes and Teresa Hodge played on the trust and charitable impulses among members of urban African American churches in upper-income areas across Prince George’s County, Maryland (Fager, 2002; Rich, 2005). African American churches often encourage their members to give to other African American businesses under the banner of “trust and support.” Dukes and Hodge’s scheme appealed to African American members’ desires to gain access to the investment and entrepreneurship arenas, especially in affluent and well-educated communities. They also used to their advantage the historical and well-documented mistrust within minority communities of the government and especially law enforcement. They promoted being part of the Financial Warfare Club as a necessary protection from the negative effects of the dominant racial group’s propensity to take advantage of African Americans in terms of finance and investments. In fact, they used explicit language of outgroup derogation such as ending “economic apartheid” to invoke negative images of being shut out of the benefits of investment opportunities because of racial group membership (Fager, 2002; Rich, 2005). This is consistent with research showing that in situations where mistrust exists, outgroup derogation is enhanced and becomes a self-reinforcing cycle of intergroup bias conflict (Gaertner, Mann, Murrell, & Dovidio, 1989).
While Dukes and Hodge were under investigation, church members were typically unwilling to provide testimony against these fraudulent activities. This reluctance to cooperate with government and law enforcement investigations reflects the traditional distrust of government and law enforcement involvement in the African American community. This point was particularly salient given the fact that the Financial Warfare Club was positioned as a means for church members in the African American community to actively combat a financial system that did not benefit them. Even when Dukes was found guilty of taking more than $1.3 million from at least one thousand African American investors across eighteen states, the overarching points regarding the necessity of combating the government control of wealth in African American communities and distrust of government and law enforcement efforts to prosecute minorities who were trying to create economic opportunity remained a compelling lesson learned from this case (Fager, 2002; Rich, 2005; Securities and Exchange Commission, 2002). When distrust of “others” is high, affinity fraud is more effective in creating barriers between victims of predatory practices and the very systems and individuals meant to provide a protective resource.
Affinity Fraud as Positive Distinctiveness: A Social Capital Investment Program
The notion of positive distinctiveness suggests that when social identity is salient or relevant within the context, individuals will exaggerate the differences between their social groups and others in a manner that favors ingroup membership. In essence, this is the combination of simultaneous processes of ingroup favoritism and outgroup derogation. Individuals will selectively attend to and value information that helps to maintain this positive distinctiveness. For example, research finds that when people read international news articles favoring their own country over another (e.g., the United States versus Germany), they evaluate their country (ingroup) better than the other country (outgroup) and have better knowledge or recollection of the news they read, consistent with the notion of positive distinctiveness (Trepte, Schmitt, & Dienlin, 2018). This can be applied to the case of Ephren Taylor, the son of a minister who targeted African American evangelical churches with a Ponzi scheme that was masked as his Social Capitalist investment program. From 2007 to 2010, Taylor and his wife, Wendy Jean Connor, conducted numerous Wealth Tour Live seminars at evangelical churches in African American communities near Atlanta, Georgia. In the seminars, Taylor presented himself as a successful and “socially conscious” investor who was giving back to the community by working with churches in African American communities to generate economic development opportunities (“Fleecing the Flock,” 2012; Wyler, 2014).
Taylor directly focused on the traditional role of African American churches in supporting economic activity in their local communities. His program explicitly referenced ideas that were core to the positive distinctiveness of racial identity that members of churches in African American communities develop with respect to the church’s responsibility to support and develop economic benefits within their communities. He connected to members by quoting scripture in an accurate and authentic manner, as the son of a preacher, and tied these references to themes pertaining to economic empowerment and attainable housing within the community. He also made it a point to disparage traditional investment options in the stock market and mutual funds by emphasizing how these investments created no benefit for the African American community (Wyler, 2014). Thus, he enhanced positive distinctiveness based on racial group identity and outgroup derogation among his targeted victims.
In actuality, Taylor’s investment program was a multi-million-dollar Ponzi scheme in which churchgoers were encouraged to invest their savings in Taylor’s “low risk, high reward” investment opportunities (Wyler, 2014). He emphasized that his investment program was a “no risk sweepstakes machine” that would consistently generate annual gains between 12 and 20 percent by creating and supporting successful inner-city businesses. Taylor was highly successful in convincing church members to invest their savings with him, generating $2 million alone from the New Birth Missionary Baptist Church in Atlanta. In fact, Taylor had no underlying business model or validating financial performance data to substantiate his investment program. He collected money from people and ran a series of laundromats and juice bars that were not profitable. At the same time, he used the money invested to support a luxurious lifestyle for himself and his wife. The Securities and Exchange Commission filed charges, and both Taylor and his wife were convicted and sentenced to prison for multiple counts of fraud (Wyler, 2014). Taylor’s investment scheme relied on the positive distinctiveness of African Americans participating in charitable giving to accomplish his fraud.
Affinity Fraud and the Need for Inclusive Leadership
The solutions proposed to prevent affinity fraud cases such as these traditionally focus on legal or procedural efforts yet overlook the role of leadership in creating and sustaining meaningful change. Bosley and Knorr (2016) and Sargsian (2012) cursorily mention the need to educate group leaders on affinity fraud, but they do not include specific strategies or models. While these legal and procedural interventions are necessary, we argue they are insufficient in addressing the economic, social, and psychological consequences of race-based affinity fraud. Mere procedural changes will not affect the social identity processes that enable race-based affinity fraud to have detrimental effects on people, families, and communities of color. We argue that inclusive leadership must play a role in preventing affinity fraud that is based on key demographic categories such race and prevent social identity theory processes from having a negative impact.
Inclusive leadership is often defined as a leader’s influence in shaping environments where belongingness and individual uniqueness are respected and where the leader exhibits openness and accessibility and values high-quality interactions among followers (Nembhard & Edmondson, 2006). This type of leadership invites and values diverse input from others that cuts across boundaries such as demographics or social identity group membership. A key benefit of inclusive leadership is its positive impact on perceptions of psychological safety, especially among diverse group members (Carmeli, Reiter-Palmon, & Ziv, 2010). This notion of psychological safety is defined as individuals’ perceptions of the consequence of taking interpersonal risks without fear or threat to individual or social group identity (Edmondson, 1999, 2004) and has been related to positive individual, group, and organizational outcomes (Shore et al., 2011).
Psychological safety and inclusion are present when belongingness is strong and value in uniqueness is high. This means that instead of an emphasis on ingroup bias, outgroup derogation, and positive distinctiveness, the dual experiences of belongingness and uniqueness are simultaneously emphasized. This is consistent with research on inclusive workplace cultures that defines them as ones that maintain high acceptance (belongingness) and individual value (uniqueness) (Ely & Thomas, 2001).
One could argue that inclusive leadership creates a superordinate identity through its impact on individual and group outcomes (Gaertner et al., 1989). A key benefit of inclusive leadership for preventing predatory biases such as affinity fraud is the impact of a superordinate identity on perceptions of psychological safety among diverse group members (Carmeli et al., 2010). Inclusive leadership builds a unified social identity that facilitates trust and connectedness among others while valuing individual contribution and diverse perspectives (Nembhard & Edmondson, 2006). This suggests that inclusive leadership can help overcome or correct the negative effectives of ingroup favoritism, outgroup derogation, and positive distinctiveness based on social group membership through enhanced perceptions of group identity, belongingness, and psychological safety. This type of leadership at the workgroup, organization, or societal level sends a powerful signal to followers that belongingness and group identity must include and not devalue uniqueness among diverse individuals. The ability to simultaneously support social cohesion and inclusion can build group trust and may offset the negative impact of outgroup derogation and ingroup bias.
Inclusive leadership allows individuals to acknowledge multiple identities and, at the same time, to be wary of identity-based divisiveness or deception. It empowers members to form trust but not blindly follow the herd, and it builds members’ capacity to identify and contest affinity-based threats that include perpetrators of fraud. Thus, inclusive leadership helps to shape the culture and climate of the work team and workplace to be more supportive, open, and trusting, which yields positive relationships among peers, enhances communication, and builds trust (Randel, Dean, Ehrhart, Chung, & Shore, 2016). These environments would be less susceptible to affinity-based fraud if they were steeped in a culture of inclusivity and inclusive leadership—if the parents, school, and church leaders ascribed to a broader conceptualization of leadership. Also, when leaders model the value of inclusion and respect to participants and followers, then these organizations may build capacity to resist affinity-based schemes in the future.
A Call for Inclusive Leadership Development
While inclusive leadership sounds promising in theory, a key factor to offset the negative impact of identity-based affinity fraud rests in the need to develop a pipeline of inclusive leadership within organizations and society. Sugiyama, Cavanagh, van Esch, Bilimoria, and Brown (2016) make a similar argument for more relational and identity-based leadership development approaches that can address the specific needs of a diverse and global workforce. They suggest that leadership development programs must explicitly focus on inclusive leadership through the process of identity work (Ely, Ibarra, & Kolb, 2011) that provides a safe environment for examining, challenging, and transforming traditional identity structures into more inclusive conceptualizations that balance inclusion and uniqueness. This means an explicit focus on identity-based approaches to leadership development that include strengthening the leader’s relational competencies in order to build high-quality relationships among diverse social identities (Nishii & Mayer, 2009). An explicit focus on inclusive leadership development also means challenging our definitions of leadership effectiveness to shift toward collective outcomes and away from traditional notions of success, relative gain, and superiority. This type of inclusive leadership development through identity work and collective outcomes is central to feminist approaches to leadership development (Eagly & Karau, 2002). This means that developing inclusive leaders may require a diverse, interconnected social environment in which learning is both personal and reflective while engaging the leader in necessary identity-based work (Vinnicombe & Singh, 2002).
Notions of inclusive leadership are embedded in the common identity model, which is rooted in social identity theory (Gaertner & Dovidio, 2012). This approach emphasizes the value of recategorization, or creating a shared superordinate identity for members of different groups, as a way to address ingroup bias and intergroup conflict (Dovidio, Gaertner, Ufkes, Saguy, & Peterson, 2016). Inclusive leadership based on this model would induce members of different groups to recategorize themselves as members of an all-inclusive social group, thus changing the conceptual representations of different groups from an “us” versus “them” orientation to a more encompassing, superordinate “we” identity. Prior research shows positive benefits of a common identity, such as the reduction of bias between African Americans and the police in response to community-engaged policing efforts (Murphy, Cramer, Waymire, & Barkworth, 2017). This suggests that the presence of inclusive leadership within the youth sports program would have facilitated a common social identity of community-engaged student athletics that could have reduced the vulnerability of at-risk African American high school students to targeted recruitment based on racial group identity alone. A similar impact of recategorization is relevant for the Financial Warfare Club. Leaders cultivated mistrust through outgroup derogation by expanding the differences between African Americans and “others.” Recategorization through an inclusive leadership approach would have stressed a common identity supporting social justice, socially responsible investing, and community development that consists of African Americans and other historically disenfranchised communities. The impact of inclusive leadership and recategorization is also relevant to the social capital investment program, especially in terms of encouraging victims of affinity fraud to exercise their voice and take collective action. This is perhaps the strongest benefit of inclusive leadership and recategorization, as followers’ voices are often silenced by a notion of misplaced loyalty to the ingroup or mistrust and fear of the outgroup. Some evidence supports this in research that examines the impact a common identity has on facilitating peace in situations of global intergroup conflict (Reysen & Katzarska-Miller, 2017).
Future research should unpack the critical competencies that define inclusive leadership that is able to prevent identity-based predatory biases such as affinity fraud. For example, feminist perspectives argue for a focus on relational competencies, such as social awareness and connectedness, that model identity-based leadership (Day & Harrison, 2007). While this style of leadership focuses on building capacity among diverse individuals and work groups, more field and qualitative research is needed to validate the impact of this type of leader approach on key workplace and organizational outcomes. This should focus on the benefits but also examine the potential consequences of this approach to leadership development, which may include backlash in response to attempts to transform organizations and communities. Making identity and identity work explicit dimensions of leadership development in future theory and practice would be a valuable contribution to attempts to address the ongoing negative consequences of affinity fraud and other race-based predatory practices that affect individuals, organizations, and communities.
REFERENCES
Anderson, K. B. (2013). Consumer fraud in the United States, 2011: The third FTC survey (Report). Retrieved from http://
Ashforth, B. E., & Mael, F. (1989). Social identity theory and the organization. Academy of Management Review, 14(1), 20–39.
Austin, D. E. (2004). “In God we trust”: The cultural and social impact of affinity fraud in the African American church. University of Maryland Law Journal of Race, Religion, Gender & Class, 4, 365–410.
Bosley, S., & Knorr, M. (2016). Pyramids, Ponzis and fraud prevention: Lessons from a case study. Journal of Financial Crime, 25(1), 1–15. Retrieved from http://
Brewer, M. B. (1991). The social self: On being the same and different at the same time. Personality and Social Psychology Bulletin, 17(5), 475–482.
Brewer, M. B. (2007). The importance of being we: Human nature and intergroup relations. American Psychologist, 62(8), 728–738.
Brewer, M. B., & Gardner, W. (1996). Who is this “we”? Levels of collective identity and self representations. Journal of Personality and Social Psychologyocial Psychology, 71(1), 83–93.
Brown, D. A. (2007). Pensions and risk aversion: The influence of race, ethnicity, and class on investor behavior. Lewis & Clark Law Review, 11(2), 385–406.
Bucy, P. H., Formby, E. P., Raspanti, M. S., & Rooney, K. E. (2008). Why do they do it? The motives, mores, and character of white collar criminals. St. John’s Law Review, 82, 401–571.
Carmeli, A., Reiter-Palmon, R., & Ziv, E. (2010). Inclusive leadership and employee involvement in creative tasks in the workplace: The mediating role of psychological safety. Creativity Research Journal, 22(3), 250–260.
Day, D. V., & Harrison, M. M. (2007). A multilevel, identity-based approach to leadership development. Human Resource Management Review, 17, 360–373.
Dovidio, J. F., Gaertner, S. L., Ufkes, E. G., Saguy, T., & Peterson, A. R. (2016). Included but invisible? Subtle bias, common identity, and the darker side of “we.” Social Isseus and Policy Review, 10(1), 6–46.
Eagly, A. H., & Karau, S. J. (2002). Role congruity theory of prejudice toward female leaders. Psychological Review, 109(3), 573–598.
Edmondson, A. (1999). Psychological safety and learning behavior in work teams. Administrative Science Quarterly, 44(2), 350–383.
Edmondson, A. (2004). Psychological safety, trust, and learning in organizations: A group-level lens. In R. M. Kramer & K. S. Cook (Eds.), Trust and distrust in organizations: Dilemmas and approaches (pp. 239–272). New York, NY: Russell Sage Foundation.
Ely, R. J., Ibarra, H., & Kolb, D. (2011). Taking gender into account: Theory and design for women’s leadership eevelopment programs. Academy of Management Learning Education, 10(3), 474–493.
Ely, R. J., & Thomas, D. A. (2001). Cultural diversity at work: The effects of diversity perspectives on work group processes and outcomes. Administrative Science Quarterly, 46, 229–273.
Fager, C. (2002, December 9). Fraud: Financial warfare scam targets black churches. Christianity Today. Retrieved from http://
Fairfax, L. M. (2003). The thin line between love and hate: Why affinity-based securities and investment fraud constitutes a hate crime. U.C. Davis Law Review, 1073, 1073–1143. Retrieved from http://
Federal Trade Commission. (2016). Combating fraud in African American & Latino communities: The FTC’s comprehensive strategic plan (Report). Retrieved from https://
Fink, P. J. (2009, February). Fink! Still at large: People who suffer losses as a result of affinity fraud often struggle with the psychological ripple effects of such betrayal. What strategies can we use to help victims move forward? Clinical Psychiatry News. Retrieved from https://
Fisher, L. E. (2009). Target marketing of subprime loans: Racialized consumer fraud & reverse redlining. Journal of Law and Policy, 18, 121–155.
Fleecing the flock: The big business of swindling people who trust you. (2012, January 28). Economist.
Gaertner, S. L., & Dovidio, J. F. (2012). Reducing intergroup bias: The common ingroup identity model. In P. A. M. Van Lange, A. W. Kruglanski, & E. T. Higgins (Eds), Handbook of theories of social psychology (Vol. 2, pp. 439–457). Thousand Oaks, CA: Sage.
Gaertner, S. L., Mann, J. A., Murrell, A. J., & Dovidio, J. F. (1989). Reducing intergroup bias: The benefits of re-categorization. Journal of Personality and Social Psychology, 57(2), 239–249.
Harrington, B. (2017, July 31). Why Americans get conned again and again. The Atlantic, p. 7. Retrieved from https://
Hogg, M. A., & Abrams, D. (1990). Social motivation, self-esteem and social identity. In D. Abrams & M. A. Hogg (Eds.), Social identity theory: Construction and critical advances (pp. 28–47). New York, NY: Harvester Wheatsheaf.
Huddleston, T., Jr. (2018, February 21). An especially diverse audience lifted ‘Black Panther’ to record box office heights. Fortune. Retrieved from http://
Keating, P. (2011). How to scam an athlete. Retrieved from http://
Khasru, B. Z. (2001). Affinity scams target religous ethnic investors. Fairfield Business Journal, 40(34), 1, 20.
Kramer, R. M. (2009, June). Rethinking trust. Harvard Business Review, pp. 69–77. Retrieved from https://
Marlowe, J., & Atiles, J. H. (2005). Consumer fraud and Latino immigrant consumers in the United States. International Journal of Consumer Studies, 29(5), 391–400.
Marquet International. (2011). The Marquet report on Ponzi schemes. Retrieved from https://
Murphy, K., Cramer, R. J., Waymire, K. A. & Barkworth, J. (2017). Police bias, social identity, and minority groups: A social psychological understanding of cooperation with police. Justice Quarterly, 35(6) 1–27.
Nembhard, I. M., & Edmondson, A. C. (2006). Making it safe: The effects of leader inclusiveness and professional status on psychological safety and improvement efforts in health care teams. Journal of Organizational Behavior, 27(7), 941–966.
Nishii, L. H., & Mayer, D. M. (2009). Do inclusive leaders help to reduce turnover in diverse groups? The moderating role of leader-member exchange in the diversity to turnover relationship. Journal of Applied Psychology, 94(6), 1412–1426.
Perri, F. S., & Brody, R. G. (2011). Birds of the same feather: The dangers of affinity fraud. Journal of Forensic Studies in Accounting & Business, 3(1), 33–46. Retrieved from http://
Perri, F. S., & Brody, R. G. (2012). The optics of fraud: Affiliations that enhance offender credibility. Journal of Financial Crime, 19(3), 305–320.
Pickett, C. L., Bonner, B. L., & Coleman, J. M. (2002). Motivated self-stereotyping: Heightened assimilation and differentiation needs result in increased levels of positive and negative self-stereotyping. Journal of Personality and Social Psychology, 82(4), 543–562.
Randel, A. E., Dean, M. A., Ehrhart, K. H., Chung, B., & Shore, L. (2016). Leader inclusiveness, psychological diversity climate, and helping behaviors. Journal of Managerial Psychology, 31(1), 216–234.
Rich, E. (2005, June 10). Md. investment club organizer convicted of fraud. Washington Post. Retrieved from https://
Reysen, S., & Katzarska-Miller, I. (2017). Superordinate and subgroup identities as predictors of peace and conflict: The unique content of global citizenship identity. Peace and Conflict: Journal of Peace Psychology, 23(4), 405–415.
Sargsian, K. (2012). A wolf in sheep’s clothing: Enacting statutes enhancing criminal penalties for affinity fraud. Retrieved from https://
Securities and Exchange Commission. (2002, September 5). Commission files injunctive action against Marcus Dukes and Teresa Hodge in affinity fraud. Retrieved from https://
Shore, L. M., Randel, A. E., Chung, B. G., Dean, M. A., Ehrhart, K. H., & Singh, G. (2011). Inclusion and diversity in work groups: A review and model for future research. Journal of Management, 37(4), 1262–1289.
Sugiyama, K., Cavanagh, K. V., van Esch, C., Bilimoria, D., & Brown, C. (2016). Inclusive leadership development: Drawing from pedagogies of women’s and general leadership development programs. Journal of Management Education, 40(3), 253–292.
Tajfel, H., & Turner, J. (1979). An integrative theory of intergroup conflict. In J. A. Williams & S. Worchel (Eds.), The social psychology of intergroup relations (pp. 33–47). Belmont, CA: Wadsworth.
Trepte, S., Schmitt, J. B., & Dienlin, T. (2018). Good news! How reading valenced news articles influences postive distinctiveness and learning from news. Journal of Media Psychology, 30(2), 66–78.
Turner, J. C. (1975). Social comparison and social identity: Some prospects for intergroup behaviour. European Journal of Social Psychology, 5(1), 5–34.
Vinnicombe, S., & Singh, V. (2002). Women-only management training: An essential part of women’s leadership development. Journal of Change Management, 3, 294–306.
Weaver, A. J. (2011). The role of actors’ race in White audiences’ selective exposure to movies. Journal of Communication, 61, 369–385.
Wyler, G. (2014, September 17). Ephren Taylor’s disastrous megachurch Ponzi scheme. Vice. Retrieved from https://