In House - The FindLaw Corporate Counsel Blog

Utah Approves White-Collar Crime Registry

There are the sex-offender registries, and then there's the white-collar crime registry. Utah can take credit for being the first state to pioneer such a thing.

The registry seems to have sprung out of a need to keep track of the state's rising incidents of something known as "affinity fraud."

Affinity Fraud

A driving reason for the creation of the registry is to help the public keep track of certain types of criminals who use guile and the mail system to bamboozle trusting people out of their money. Utah is particularly vulnerable to this type of "affinity fraud" criminal activity because the whole linchpin of the scheme is gaining someone's trust through common social ties. In Utah, a significant fraction of the population is Mormon; and often Mormon's and their families are victims of these fraud conspiracies.

Salt Lake City: Come for the Mormonism, Leave Because of Ponzi Schemes

Last year, a schemer who belonged to the Mormon Church was charged with being the brains of a ponzi scheme that bilked about 700 people out of $72 million. Losses in Utah associated with affinity fraud were estimated at a billion dollars. And although these schemes don't quite reach the level of Bernie Madoff, the sums should stun readers.

To get an idea of how bad the problem is, note how the FBI named Salt Lake City one of the top five "Ponzi Hotspots" in America -- not a distinction one would like to hold for long. Not only that, the state also was in the top spots for those wanting to get into the "affinity fraud" game.

Why It Works

The registry should help residents identify previous offenders because the fraud game is so lucrative and recidivism rates are high. And since family values and ties are stronger in places like Utah, fraudsters more easily find trusting marks because they do their best work with the line, "You can trust me because I'm like you." This was, in fact, the MO of Bernie Madoff who took his clients for a ride -- most of them Jewish.

Let's hope this registry does what its proponents say it will do.

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