Fraud Basics

Utah's 'White Collar Crime Registry'

Does it help or complicate?

In 2015, Utah became the first state in the U.S. to implement a white-collar crime registry. Similar to a sex-offender registry, Utah's registry provides searchable information and history about felons who've been convicted of white-collar crimes. This begs the question: Why would Utah want to be the first to implement this resource? Primarily because of the increasing prevalence of white-collar crime in the state — particularly, affinity fraud.

An affinity fraudster, who either purports or actually is a member of an identifiable group, fosters trusting relationships through common bonds as the catalyst for schemes. In California, Armando Ruiz preyed on members of the Hispanic community. [See the March 12, 2012, Securities and Exchange Commission (SEC) charges.]

In Chicago, Clayton A. Cohen, a former marine, focused his attention on "investments" from current and former military. (See the Aug. 6, 2013, SEC release.)

Gaston Cantens used his position in the Florida Cuban American community to gain investors. (See the April 5, 2012, SEC release.)

Bernie Madoff used his affiliation with Jewish communities to further his fraudulent activities and operate his $50 billion Ponzi scheme. Fraudsters via social groups or religious affiliations gain the trust of "investors," who often forgo appropriate due diligence. In Utah, affinity fraudsters often misuse trusting relationships among members of the Church of Jesus Christ of Latter Day Saints, or the LDS Church (Mormons).

The FBI ranks Salt Lake City as one of the top five Ponzi scheme hot spots in the nation. (See State of Fraud, by Gaylen Webb, Utah Business, April 1, 2012.) With roughly 60 percent of Utahans identifying as Mormon and 40 percent as active Mormons, LDS communities are enticing targets for affinity fraudsters in Utah.

The Utah legislature began to fight back against affinity fraud in 2011 when it modified the Utah Uniform Securities Act to include harsher penalties for those who used positions of authority to defraud others or who preyed on adults who are impaired because of age, mental or physical disability. (See Utah Code Ann. §61-1-13 et al.) The battle continued in 2015 with the White Collar Crime Registry (WCCR).


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