Unfriendly theft: Educating against affinity fraud

SALT LAKE CITY — Jerome Mayne never thought of himself as a criminal, even though he was violating the law.

The former loan officer — now convicted felon — spent nearly two years in federal prison for participating in a scam during the mid-1990s by making loans to homebuyers using fraudulent information. While his role in the scam was relatively minor, the penalty he paid was significant.

Along with four other co-conspirators, he was charged with conspiracy to commit mail fraud, wire fraud and money laundering. In 1999, he pleaded guilty to the first two counts and spent 21 months in a minimum-security federal prison in Yankton, S.D.

"There were several red flags looking back," Mayne said. Writing loans for clients that didn't have proper documentation and fudging critical data did not seem quite right to Mayne at the time. But he didn't take action to stop it.

"When I look back on it … it was stupid in retrospect," Mayne said. "In fact, it wasn't just stupid, it was criminal."

Mayne will be one of the featured speakers at a half-day conference called "Fraud College" that will be held in Salt Lake City on Feb. 15 at the University of Utah main ballroom from 8:30 a.m. until noon. Individuals may register online for the free event by visiting www.fraudcollege.org.

Real estate schemes are among the many fraud crimes perpetrated in Utah and states across the nation every year. And they've helped fuel Utah's reputation as a place where fraud thrives.

Losses exceeded $1.4 billion in Utah in 2010, said Brent Baker, event organizer and locally based attorney specializing in white collar crime.

"To put that number in perspective, in that same year, skiers and snowboarders spent around $1.2 billion, according to the Utah Ski and Snowboard Association," he said.

While the state and Securities and Exchange Commission investigated the $1.4 billion in frauds, the Salt Lake City office of the FBI reported an additional $600 million in fraud losses under scrutiny during that same period.

According to the Utah Department of Commerce, there are currently 57 active fraud investigations being conducted by the Utah Division of Securities.

One of the focuses of the Fraud College event will be affinity fraud, which government experts claim is especially prevalent across the state.