Bills would crack down on 'affinity fraud' in Utah

SALT LAKE CITY — Some of the things that define Utahns may also be their Achilles' heel, according to a state senator who has drafted a bill designed to help them.

Sen. Ben McAdams, D-Salt Lake City, aims to remedy that with SB101, which would protect Utahns from being defrauded by those closest to them, who hold the highest levels of trust.

"This is an instance where one of our greatest strengths, which is we see the best in others and we're entrepreneurial, that we want to succeed and that is one of the strengths of the people of Utah, but is also one of the things that makes us … peculiarly gullible," he said.

The bill, which would modify the Utah Uniform Securities Act, would exact harsher penalties on those who use "undue influence" to "exploit the trust, dependence or fear of another person or gain their confidence" and "deceptively" influence their decisions. Harsher penalties would apply, as well, if the fraud victim is a "vulnerable adult." The bill would enable prosecutors to file second-degree felony charges in such cases.

McAdams said they want to target those who abuse their positions of trust to attract investors.

"We want to give that an additional criminal penalty," he said. "We should crack down harder on that because they are abusing that status in the community."

Utah has been a hotbed for such schemes. An FBI analysis found that more than 4,000 Utahns have been victimized by fraud in the past year and bilked out of more than $1.5 billion. Many of those who have been charged in connection with fraud-related crimes targeted victims in their church congregations.

Former U.S. Attorney for Utah Brett Tolman, who now works in private practice, said people should be wary of situations where an individual wants to hold a meeting similar to a church meeting and speaks about their plans in religious language, which he said can make it difficult to distinguish what is actually being proposed.

But both McAdams and Tolman pointed out that so-called affinity fraud is a broad issue that affects all types of groups and communities from members of The Church of Jesus Christ of Latter-day Saints to illegal immigrants to those who are deaf.

"Really, any instance involving trust in that community," McAdams said. "Affinity fraud is not unique to the LDS community, and it is not unique to Utah."