In March 2015, Utah Governor Gary Herbert signed into law the nation's first "White Collar Crime Offender Registry." The registry, which is similar in concept to sex offender registries, requires the state’s financial felons to register with Utah's Office of the Attorney General upon their conviction for certain financial fraud-related crimes.
One of the key reasons Utah Attorney General Sean Reyes said he proposed the law was because the heavily-Mormon state of Utah is "sadly known for its high level of financial vulnerability to affinity fraud.... Utah's unique personal interweavings and close relationships offer a rich environment for predatory behavior and financial crimes in our state." The most recent example of this type of affinity fraud in Utah was in the news yesterday, as Reyes' office charged a father and son with 15 counts of securities fraud for running a Ponzi scheme that brought in more than $200 million from 400 investors. The Utah AG charged Wendell A. Jacobson, 61, and Allen R. Jacobson, 36, with using "their membership in The Church of Jesus Christ of Latter-day Saints to find and gain the trust of prospective investors."
The SEC previously filed a lawsuit against the Jacobsons in December 2011 concerning the same conduct. The SEC similarly alleged that the Jacobsons used their memberships in the Mormon church "to make connections and win over the trust of prospective investors." Utah's KSL.com reports that Wendell Jacobson was the bishop of a Snow College student ward at the time of the alleged fraud.
The SEC lawsuit alleged that the Jacobsons claimed that investors would share in the profits derived from rental income at certain apartment complexes as well as the eventual sales of those properties. In reality, the SEC charged, the
LLCs are suffering significant losses and the Jacobsons are merely pooling the money raised from investors into large bank accounts from which they are siphoning money to pay family expenses and the operating expenses of their various companies. They also are paying earlier investors with funds received from new investors in classic Ponzi scheme fashion.