SALT LAKE CITY (ABC4 News) – Utah is known for a lot of things, most of them positive, but according to a new study, we are the nation’s capital for Ponzi schemes.
It’s the classic fraud where early investors are paid with new investors’ money until the scheme inevitably collapses.
Attorney Mark Pugsley works to recover money for victims of investment fraud. He took data from a 10-year study by Ponzitracker.com and applied it to Utah discovering that we lead the country with 1.35 Ponzi schemes per 100,000 residents, nearly three times as many as second-place Florida. If you take away the massive Bernie Madoff case in New York, we lose more money per capita than any other state, over $502 for each resident.
Pugsley says that many victims are members of The Church of Jesus Christ of Latter-day Saints.
“They say ‘Hey I’m paying my tithing. I’m a good person. I have a temple recommend or whatever it be, therefore if I invest in this then I’m going to be blessed and somehow Heavenly Father will protect me from getting scammed’ and unfortunately that doesn’t work,” he told ABC4 News.
In addition to religion as part of the sales pitch, Pugsley says other red flags are secrecy about the investment and a promised high rate of return.
“If anyone is offering you more than 10 percent a year on an investment you need to be extremely, extremely careful,” Pugsley said. “And if it’s more than 20 percent a year, just say no. It’s just not real. If it sounds too good to be true, it is.”
Five years ago ABC4 spoke to a victim who lost thousands to a scheme operated by Davis County businessman Dee Randall who was then still a free man.
“Chances are he’s drivin’ some nice car still and he’s livin’ in a house that he still owns,” the victim who wished to remain anonymous said. “So they need to go take that house away from him, take his cars away from him and make him go out and buy a bus pass and ride the bus. That’s what I want to say to him. I mean, I’d love to say a lot more.”
In 2017, Randall was sentenced to 30 years in prison but there are plenty of others happy to take his place conducting the same type of fraud.
“I hardly ever see cases with less than a hundred thousand dollars in losses,” Pugsley said. “These people really do get wiped out. I had a really sad case a few years ago after we tried to get the money back and just had no luck the man who was in his 70s told me he had to go back to work bagging groceries at the local grocery store just to pay for his wife’s medication.”
Pugsley tells ABC4 he would like Utahns to become educated enough about these schemes that his phone stops ringing and he could go into another specialty of law.
For more information on investment fraud in Utah check out http://rqn.com/blog/utahsecuritiesfraud/#.XMjRUWhKiUk.