According to the state Division of Securities and the FBI, approximately $2 billion has been lost since 2010 by investors to those using various scams, including insurance fraud, Internet fraud and Ponzi schemes. Utahns are believed to be particularly vulnerable to affinity fraud, or fraud where potential victims are targeted through a common bond such as friendship, ethnic or religious affiliation, due to its trusting culture.
The Church of Jesus Christ of Latter-day Saints has repeatedly warned its members against affinity fraud, even taking part in a Fraud College earlier this year, where church spokesman Michael Otterson advised members to cultivate a healthy skepticism.
"Church members should not let their natural trust blind them to the dangers of those who would exploit it," Otterson said at the time. "Should someone — inside or outside of the church — come to you with a financial proposition, ensure that you practice financial discretion and consult qualified, professional advisers with well-established public reputations. There is a difference between trust and naiveté, and church members must be informed and cautious."
Otterson also said the LDS Church offers its support to those who have been victimized, cooperates fully with fraud investigations and returns the donations of members that can be traced to fraud. Perpetrators of fraud can also face disciplinary action from the church. This is in addition to its efforts to prevent fraud by educating its members.
"The church offers these warnings in the hope that financial scams among its members can be prevented from happening in the first place," Otterson said.
Reid's attorney, Martin Gravis, declined to comment on the case. Calls placed to Reid's home were not answered Friday.
Reid's next court appearance is set for Jan. 16, when he will decide whether he wants to have a preliminary hearing on the evidence against him.
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