Forensics Journal - Stevenson University 2015 | Page 32

STEVENSON UNIVERSITY

Affinity Fraud:
Identification and Prosecution
Christine Kreke
The Greek tragedian Sophocles said, “Things gained through
unjust fraud are never secure” (Sophocles, n.d.). Individuals
are frequently separated from their money or other possessions
through fraud. Too often, these frauds target specific sectors
of society such as religious affiliations, retirees, racial groups, or
professional organizations. When an offender ingratiates himself
within a group in order to gain trust, affinity fraud will result.

Authorities attribute the problem to the fact that a high percentage
of Utah’s population is Mormon. Specifically, the Mormons as a
community are inclined to trust others and are hospitable to new
community members. Affinity fraudsters used this trust to their
advantage pursuing their schemes (Affinity Fraud: Fleecing, 2012).
The societal effects of affinity fraud are not limited solely to the
amount of funds lost by investors. Once these frauds are uncovered,
investor confidence can diminish the financial markets, and distrust
can increase in the government’s ability to provide protection. Loss
of confidence manifested itself after the Madoff fiasco with the
effects evident throughout the economy. “Unfortunately, affinity
fraud erodes the trust needed for such investments to occur and to
foster our economy” (Sargsian, 2012, p. 10). Essentially, affinity
fraud victims become less likely to trust future monetary requests
and legitimate charitable organizations could suffer from a loss of
endowments. Subsequent to a large fraud being discovered, time
is spent by regulators and law enforcement not only prosecuting
these cases but also in assessing what went wrong. Time consuming
investigations generally include implementation of changes in an
attempt to assist in detection of these frauds in the future.

Regulators and other law enforcement personnel attempt to identify
instances of affinity fraud in ܙ\