Park City warned of fraud
June 29, 2010
The prevalence of "angel investors" in Park City people willing to fund a start-up company make it a prime target for con men, said Keith Woodwell, director of the Utah Division of Securities. That’s why he’s encouraging Summit County residents to take advantage of resources on fraud prevention.
Making the most headlines is a conference today at Utah Valley University called Fraud College, but Woodwell’s office and other agencies are eager to run searches and checks any time to help residents invest wisely.
As the country still scratches its head over how Bernie Madoff hid his Ponzi scheme so long, experts have advocated the creation of a "fraud college" for government regulators.
Utah attorney Brent Baker and the Utah Securities Association created it because Utahns frequently make headlines for being suckered by various scams. They want people to quit waiting for government to make investing safe and arm themselves with good information, Woodwell said.
With strong neighborhood and religious networks, Utahns are often susceptible to affinity fraud. Park City’s demographics make that less of a problem here, but Woodwell said there’s a major problem with con artists convincing Parkites they’re raising money for legitimate businesses.
"It’s common knowledge that a lot of venture capital activity goes on and they position themselves to appear as angel investors," he explained.
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The most frequent things we’re seeing are foreign currency trading schemes and commodity trading schemes, he said. People follow the news and know the Euro and the price of gold are unstable.
"They claim to have proprietary software algorithms to track changes and predict markets. It’s just baloney," he said.
People need to identify the signs of a scam and know what steps to take to verify the legitimacy of an investment opportunity, Woodwell said.
Agencies had to instigate public awareness campaigns to get people to buckle their seatbelts and look both ways before crossing the street. Now it’s second nature. The same needs to happen with investing, he explained.
Before giving someone your money, it must become an instant and natural reaction to do due diligence to check out the person, their licenses and the opportunity, he said.
Those interested in trying to make some of the conference can register at fraudcollege.com. For everyone else, the website offers links to ask government regulators questions.
View Fraud College happening today at UVU in a larger map