The Fraud Examiner

Fighting Fraud with Utah's White-Collar Crime Registry
 

By: Jennifer Liebman, Research Editor, ACFE   


Val Sedgwick used his ties to the Church of Jesus Christ of Latter-day Saints to assure real estate investors of his trustworthiness to use their funds to develop land, when in fact he was using their money to pay for his personal expenses and past debts. Nicholas Garza swindled his employer and its clients with an invoice edited to include fraudulent charges used only for his benefit. James Douglas Oliver convinced small businesses to pay for a spot on the “clown map” he was creating. His business, Clowns and Maps Are Us, never got around to making that map.

The details of their frauds are different, but they all “earned” their place in the only white-collar crime registry in the United States. The registry, which the Utah legislature passed into law in 2015, has been online since February 2016. It’s a requirement for anyone convicted of second-degree felonies for securities fraud, theft by deception, unlawful dealing of property by fiduciary, insurance fraud, mortgage fraud, money laundering and pattern of unlawful activity in a Utah state district court since 2005. First-time fraudsters stay in the registry for ten years and those convicted of a second offense remain listed for another ten years. A third fraud conviction keeps the registrant on the list for life.

As of June 2016, 171 people convicted of fraud in Utah district courts are listed on the registry website. According to the Salt Lake Tribune , approximately one hundred people are convicted of financial crimes in Utah annually. Proponents of Utah's white-collar registry hope that it will curb affinity fraud crimes in the state and, perhaps, spur fraudsters to make good on restitution to their victims. Those who pay the court-ordered restitution in full may get their names removed from the site.


Utah and Affinity Fraud

Just as sex-offender registries were created to provide people with accessible information they can use to protect themselves from criminals in a given jurisdiction (as well as some old-fashioned public shaming for convicts), the white-collar registry's proponents contend that it's a user-friendly tool for investors who live in a state with a large religious population often vulnerable to affinity fraud schemes. In an affinity scheme, perpetrators target close-knit religious or ethnic communities by leveraging their trust as a member of that group. Affinity schemes can be doubly devastating for victims because the frauds not only deplete their funds, but they can also shatter trust in people with whom they thought they shared a common bond. A quick read-through of the online database reveals several convicted fraudsters who used their connections to the Mormon Church as a way to take advantage of investors. The registry also lists a number of people who defrauded their friends and family. Utah Attorney General Sean Reyes, who spearheaded development of the registry, told The Atlantic that affinity frauds in Utah add up to millions in losses each year.



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