“[Outside of budget], this is the Attorney General’s top priority for this legislative session because of the high level of affinity fraud we prosecute in our office and are aware of throughout the state. This registry is a tool to help empower and inform Utah citizens before investing with those who have illegal pasts and unsavory business practices that have led to second degree felony convictions.”
- Utah Attorney General Sean Reyes
Utah legislators have passed legislation making Utah the first state to publish an online database - complete with an offender's name, physical description, and recent photograph - identifying individuals convicted of specified white collar crimes including securities fraud, money laundering, and theft by deception. HB378 (the "Bill"), which was sponsored by Representative Mike McKell, was passed by the Utah legislature this week, and Governor Gary Herbert has indicated he intends to sign the bill into law when it reaches his desk. The database, modeled on the well-known registry used to identify convicted sex offenders, is proposed as a solution to combat an unusually high rate of financial crimes emanating from Utah, including "affinity fraud" targeting particular groups such as the large Mormon contingent that makes up 62% of the state's population. Indeed, despite ranking in the lower 20% of all 50 states based on population, Ponzitracker's Ponzi Database showed that Utah ranked sixth in both the number of Ponzi schemes over $1 million and the losses attributed to Ponzi schemes since 2008 - surpassed only by New York, Florida, Texas, California, and Illinois.
The White Collar Crime Registry (the "Registry"), as it is named, will modify the Utah Code of Criminal Procedure to establish a registry to compile a public database of all individuals convicted of the following second-degree felonies after December 31, 2005:
- Section 61-1-1 or Section 61-1-2, securities fraud;
- Section 76-6-405, theft by deception;
- Section 76-6-513, unlawful dealing of property by fiduciary;
- Section 76-6-521, fraudulent insurance;
- Section 76-6-1203, mortgage fraud;
- Section 76-10-1801, communications fraud; and
- Section 76-10-1903, money laundering.
If convicted of one of the specified offenses, the following information of the offender will be listed on the Registry:
- Name and alias(es);
- Physical description, including date of birth, height, weight, and eye color;
- recent photograph; and
- convicted offenses.
A conviction for a qualifying second-degree felony will result in the offender's inclusion in the Registry for a period of ten years. A subsequent offense will result in another ten-year inclusion, and a third conviction will result in a lifetime listing in the Registry.
However, an offender's conviction for a second-degree felony after December 31, 2005 does not automatically mandate their inclusion in the Registry. For example, the Bill provides that individuals will not have to register for the Registry if they (1) have complied with all court orders since their conviction; (2) have fully satisfied all restitution imposed by the court; and (3) have not been convicted of any other offense for which registration would be required. Additionally, the Bill sets forth a procedure for an individual to petition for their removal from the Registry after a period of five years from the completion of that individual's sentence, which includes providing notice to victims, obtaining a certificate of eligibility from a state agency, and ultimately a decision by the sentencing court that removal would not be contrary to the public's interests.
While the success of this initiative is far from guaranteed, it is hoped that the public shaming of fraud offenders in a "scarlet letter" fashion will serve not only as a deterrent to potential fraudsters but also as a resource to potential victims. For example, while a significant portion of fraudsters often have multiple convictions for fraud, that information is not always necessarily available to the public or is difficult to locate in court dockets. The hope is that the Registry will show up in an internet search for an individual's name by a potential victim attempting to do some form of due diligence.
The Bill enjoyed widespread bi-partisan support, passing Utah's House by a 65 to 7 vote and receiving unanimous support in the Utah Senate. A copy of the Bill is below: