ALL the News about
Mormons, Mormonism
and the LDS Church
Mormon News: All the News about Mormons, Mormonism and the LDS Church
Posted 24 Feb 2001   For week ended November 24, 2000
Most Recent Week
Front Page
Local News
Arts & Entertainment
·New Products
·New Websites
·Mormon Stock Index
Letters to Editor
Continuing Coverage of:
Boston Temple
School Prayer
Julie on MTV
Robert Elmer Kleasen
About Mormon News
News by E-Mail
Weekly Summary
Submitting News
Submitting Press Releases
Volunteer Positions
Bad Link?

News about Mormons, Mormonism,
and the LDS Church
Sent on Mormon-News: 22Nov00

By Kent Larsen

SEC Says Scam Artists Target Mormons

SALT LAKE CITY, UTAH -- The head of the Securities and Exchange Commission's Salt Lake City office says that the Olympic bribery scandal is only the latest scandal in a state with a history of scandals. And, says Kenneth Israel, who heads the Salt Lake office, its because the scams target Mormons.

Salt Lake City is by far the smallest US city with a SEC office, mainly because there has been so much work for SEC investigators to do there. As a result, the state has developed a reputation for brazen, fraudulent scams where investors are duped. The scams have even led some in the securities industry to call Utah "the sewer of the securities industry," according to the Associated Press. "It's outrageous, but we see a lot of it," says Israel. "If it seems too good to be true, it probably is, but people keep investing."

Israel's theory for the amount of fraud in Salt Lake City centers on the trust that LDS Church members have for each other. The close-knit structure among church members is what gives con artists the ability to spread their frauds. "People are very trusting, especially if you're in the same faith," says former Sandy, Utah jeweler Chris Thomas. He lost $25,000 in a fraud by a fellow church member and neighbor. He says these crimnals sometimes find a haven in church.

The LDS Church has tried to discourage the use of church connections to perpetrate these frauds. Its policies prohibit using Church facilities and resources, including local church directories that form the basis of LDS networking, to promote businesses. The Church also regularly cautions members to be cautious in investing, even when other church members are involved.

But the scandals happen, in spite of the warnings, often using networks of people that have met through the Church, even though they haven't used church facilities or resources to promote their business.' In other cases, the Church's policies have been ignored. Complicating the issue is that the growth of the LDS Church outside of Utah has meant that scams reach outside of Utah, and even originate elsewhere.

Recently, Ohio Attorney General Betty Montgomery filed a lawsuit against a buyer's club founded by an LDS man, alleging that the company was just a ponzi scheme that preyed upon LDS relationships. News articles about the company showed that it had spread among LDS Church members, even getting local LDS bishops to refer unemployed members to the company as potential employees.

The Associated Press lists a number of other Utah-based scams that have also involved LDS Church members, including the Bonneville Pacific scandal, which was wrapping up just as the Olympic bribery scandal broke, and the Mark Hoffman scandal, involving the sale of fraudulent documents, many involving Mormon history, to collectors.


Federal regulators call money scams a cottage industry in Utah
MSNBC (AP) 20Nov00 B4
Associated Press

See also:

LDS Man's Buyers Club Collapses After Suit by State of Ohio


[an error occurred while processing this directive]

Copyright 1998, 1999, 2000, 2001 Kent Larsen · Privacy Information