By Sens. Ben McAdams and Lyle Hillyard
As the adage goes, sometimes our greatest strength can be our greatest weakness. Utah is a warm, welcoming and trusting community. We see the best in others and, in most cases, our trust and friendship is well placed.
Unfortunately, con artists often prey on this strength and find it easy to bilk their trusting friends and neighbors. The FBI is currently investigating financial fraud in Utah totaling 1.4 billion dollars. By comparison, Utah’s annual ski industry is valued at roughly $700 million dollars.
Predatory investment scams in Utah carry heavy costs. They harm families, destroy livelihoods and dash retirement dreams. Hard earned savings, that could otherwise be invested in local start-ups and create Utah jobs, are, instead, deceptively swindled away on the lavish lifestyle of a fraudster.
Utah must pursue creative new tools to combat predatory investment scams. We support two such proposals currently under consideration by the Utah Legislature.
The first proposal would give expanded authority to the Utah Division of Securities to grant a modest financial reward to an individual who provides information that materially assists in the prosecution of a scam. Such reward would come from a fine charged to the convicted fraudster at no cost to the taxpayers. Frequently, the perpetrator of an ongoing fraud threatens the victim that if they assist with an investigation, they will be cut off from the benefits of the venture under suspicion. The reward measure under consideration by the Legislature can be a valuable tool for cracking down on scams.
A second proposal would create an enhanced criminal penalty for an individual who exerts undue influence in violation of a position of authority or relationship of trust to commit securities fraud. Those who explicitly use their status within a community for their criminal advantage should be held accountable.
The people of Utah and our state’s economy will benefit from these legislatively enacted tools to fight fraud, in conjunction with hard work of the Utah Division of Securities and the Utah Attorney General.