Free Republic

One consequence of Utah being a mostly Mormon state is that the potential for affinity fraud can be higher than in other states. A fraudster can use his activity or status within the Mormon Church to fool church members into trusting him. An example of this in Ogden was Val Southwick, who cheated investors out of millions. Fortunately, Southwick sits in prison now. Of course, affinity fraud is not confined to the LDS Church. Probably the best-known case of massive affinity fraud is that committed by Bernie Madoff, who is alleged to have defrauded investors of up to $50 billion....

The U.S. Securities and Exchange Commission defines affinity fraud as follows: Affinity fraud refers to investment scams that prey upon members of identifiable groups, such as religious or ethnic communities, the elderly, or professional groups. The fraudsters who promote affinity scams frequently are — or pretend to be — members of the group. They often enlist respected community or religious leaders from within the group to spread the word about the scheme by convincing those people that a fraudulent investment is legitimate and worthwhile. Many times, those leaders become unwitting victims of the fraudster's ruse. These scams exploit the...

Mormon folks in Utah have been fleeced of $1.4 billion over the past few years in affinity fraud schemes designed to exploit their connection to the LDS community and culture, according to news reports. Oh, yes, we've all seen it. Or heard about it from friends and relatives. Ponzi schemes. Multi-level marketing. Miracle health products. Peddled to people who have been raised in an LDS culture that values “insider” status, kinship ties, hierarchy, and unquestioning respect for authority over critical thinking and skepticism. A Mormon taste for the miraculous doesn’t hurt either. Fraud peddlers have been known to call down...

Southwick, Koerber, Hammons and Mowen -- a gallery of Utahns convicted or facing criminal charges for involvement in some of the state's biggest fraud schemes. But the four represent only a sampling of the problem that has wracked Utah in recent years as the recession has pushed more schemes into the open. Frustrated by the wave of fraud that by one estimate took $750 million out of Utahns' pocketbooks last year, regulators, law enforcement officials and attorneys are organizing a free "Fraud College" next month in Utah County for the public to call attention to the problem and to try...

After Diane Gordon's husband died in a motorcycle crash in 2004, a million-dollar insurance settlement allowed her to stop working as a housekeeper. For help in managing her money, she turned to a financial adviser, Kurt Barton. She'd met him through their Church of Jesus Christ of Latter-day Saints congregation west of Austin. Their common spirituality, she said, made her trust him; eventually, she placed all of her savings with Barton's company, Triton Financial. Three weeks ago, the company was taken over by state and federal regulators, who described Triton's finances as a $50 million "shell game." Now 57 years...

SACRAMENTO—Federal prosecutors unsealed a complaint Friday charging the president of a suburban Sacramento company with running a $40 million investment scam that bilked about 150 investors, many of whom he met through his Mormon church. One of his associates was charged with impersonating a federal agent in what prosecutors say was a bizarre shakedown scheme to recover some of the lost money. Acting U.S. Attorney Lawrence Brown said Anthony Vassallo, 29, of Folsom, promised investors in his hedge fund 36 percent annual returns with little risk of loss. But he put their money into high-risk ventures, as well as luxuries...