Last month, Utah became the first state in the U.S. to have an online registry for white-collar crime offenders. The registry, which was approved by Utah legislature last year and has been online since mid-February, includes a recent photo of criminals convicted of second-degree felonies involving fraud in the last 10 years in Utah, similar to other criminal registries.* Although this information is already publicly available, Utah’s Attorney General Sean Reyes said that the user-friendly nature of the database is an important tool for consumer protection, especially in light of the state’s financial vulnerability to a certain types of fraud known as affinity fraud.
Why is Utah so particularly vulnerable to these sorts of schemes? The perpetrators of affinity fraud pray on groups with strong social ties, such as religious and ethnic communities. Usually, it involves a fraudster being, or pretending to be, a member of the group, and subsequently exploiting the trust of that community to run a Ponzi scheme. As Lisa Fairfax, a law professor at George Washington University, wrote, the scam is based on the premise that “You can trust me because I’m like you.” It works—well. The most famous affinity-fraud case in recent years is that of Bernie Madoff, who scammed his (mainly Jewish) clients of nearly $50 billion dollars.