Scams on Mormons

[_Simon Belmont]

ttribe had some wise words for us, as a CPA in Salt Lake City:

Affinity frauds occur because fraudsters are able to exploit a natural sociological phenomenon. Namely, we have a natural tendency to trust people who seem to be "like us" in some way that it important to us and fraud, by its very nature, is a violation of trust.

Affinity scams may run across a variety of different types of sources of human similarity: race, religion, political affiliation, geographic isolation, gender, ethnic origin, family, age group, etc. In the case of Utah, it is my opinion and observation that Utah experiences abnormally high levels of affinity fraud for several reasons, some of which are related to the Church culture:

1 - A significant proportion of the population belongs to the same religion;
2 - The vast majority of the population belongs to the same political party;
3 - The vast majority of the population is a single race;
4 - A significant proportion of the population comes from similar roots (i.e. pioneers) which lends to creation of "reputations" by last name;
5 - Many generations of families tend to remain nearby (these frauds spread like wildfire in families);
6 - Utah communities tend toward a rather "old fashioned" tone whereby being neighborly is a core value. This builds trust.

Are some of these outgrowths of Church culture? Absolutely. The reason you see such high rates on Utah is because it is one of the only places in the U.S. where you have such a concentration of these factors.

A major example of affinity fraud is the Madoff scam and his success amongst New York's Jewish population. I'm not sure anyone would try to argue that there's anything that makes Jews inherently more prone to becoming fraud victims, it's just that affinity frauds prey on groups. It's what they do. These types of frauds are very common in rural southern towns in the U.S. where the demographics are very similar to Utah, for example.

Here are some affinity fraud stories:

http://www.crimes-of-persuasion.com/Cri ... finity.htm

http://www.crimes-of-persuasion.com/Cri ... _scams.htm

http://www.businessweek.com/magazine/co ... 977068.htm

http://www.acfe.com/madoff-case/Chasing-Madoff.pdf

Here are some additional stats on race from 2004 survey performed by the the FTC:

- 11.2 % of the U.S. adult population, or 25 million people, were victims of fraud in the study year;
- 34% of Native Americans and Alaska Natives were victims of fraud;
- 17% of African Americans were victims of fraud;
- 14% of Hispanics were victims of fraud;
- 6% of non-Hispanic whites were victims of fraud.

I don't think there's anything about being Native American that makes an individual a more likely fraud victim other than the fact that they are often part of a tightly-knit group. The fact is ANY tightly-knot group of the population is more likely to be the victims of fraud.