Affinity Fraud Generally Occurs When People Least Expect It

 

Fraudulent acts make headlines nearly every day. But when fraud occurs amongst friends and family, the violation really “hits home” ? perhaps even in the most literal sense. Unfortunately, it is surprising how callous or devious some people can be, even the people trusted the most.

Idaho resident Dan Palmer appeared to be a religious man, a family man; he was someone people thought they could trust. He seemed the perfect citizen and a role model for the community. Last week, Mr. Palmer pled guilty to federal criminal charges. He allegedly ran a $78 million “Ponzi” scheme from which his investors lost more than $20 million. This was an example of what is called “affinity” fraud. Some of his investors were close relatives, neighbors, fellow church members, and even the father of a student he coached in football. No one, not even those closest to Palmer, knew what was truly going on behind the scenes with Mr. Palmer’s company, the Trigon Group.

Earning one’s trust is an honorable trait. It is important to be comfortable with those people closest to you. But judgment and scrutiny must always be exercised. Affinity fraud can happen when one least expects it. All investors need to be careful when it comes to putting large sums of money in someone else’s hands, regardless of the relationship. Investors should remember the old saying ? “if it seems too good to be true, it probably is.”

Page Perry is an Atlanta-based law firm with over 125 years of collective experience representing investors in securities-related litigation and arbitration. While past results are no indicative of future success, Page Perry’s attorneys have recovered over $1,000,000 for clients on more than 45 occasions. Page Perry’s attorneys have extensive experience in representing investors in affinity fraud cases. For further information, please contact us.