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FBI agent has seen Utah through flood of fraud

As supervisory role ends, Malpede reflects on efforts to stem the tide.

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"With the concentration comes that built-in marketing network," Malpede said. "You get one person in a ward to truly buy into your investment program or your fraud scheme, or whatever it is, and boom, it immediately cycles through there. And those connections spread out to the stake or family relationships."

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Scammer tactics » Some of the scammers start out aiming to operate a legitimate business, but suffer reverses that cause them to begin cutting corners and engaging in small frauds that just get bigger and bigger, he said. The scammers then try different schemes they hope will get them out of the mess, often falling victims to other criminals.

"That’s probably another thing that’s very unique to Utah is that every case we work in the fraud division almost inevitably ties in way shape or form to another fraud case we’re working," Malpede said. "So this subject [of an investigation] may be this guy’s victim, and this guy’s victim may turn into this subject. It’s very strange."

Fraudsters appear to be good and honest people with an outgoing, attractive personality, he said.

"I’ve sat through many subject interviews where we have the bad guy on the other side and it’s a very pleasant experience because they are so friendly and nice," he said. "They have magnetic personalities."

The scammers create a lavish lifestyle to attract attention to themselves so those who observe the outward trappings of wealth will want to emulate their success and ask how they did it, often without doing any research or asking tough questions about investments being offered.

"It’s that greed gene that our victims have that he [the fraudster] must be doing something right," said Malpede.

Problem cycles » Fraud follows economic cycles, with agents and regulators cleaning up the messes during the downturns, only to see a resurgence during the next upticks, Malpede said.

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In Utah, the FBI is seeing a slowdown in complaints. But from his experience here, Malpede says each cycle of fraud in Utah seems to generate a new and larger investment schemes with each successive wave.

"I expect as the economy comes back we’re going to be right in the swing of it again," he said. "In Utah, what has been unique is every time we cycle, our dollar loses go higher."

If that cycle continues, "where are we going to be in the next round?" Malpede said. "It’s going to be unmanageable."

Despite the gloominess of that observation, Malpede said he is proud of the impact he believes the FBI and other federal and state agencies have had in working together on Utah’s financial fraud problem.

"We’ve had a huge impact," he said. "I bet we’re prevented hundreds of millions of dollars in losses just by making sure people were aware."

Drawn to Utah » For his part, Malpede has elected to stay in Utah as a special agent, foregoing the opportunity for advancement because he likes the lifestyle here, the family-friendly atmosphere, the low crime (violent crime, he makes sure to say) and the great outdoors nearby. He’s just built a new house.

And, of course, there’s plenty of work to be done.


Twitter: @TomHarveySltrib

Copyright 2014 The Salt Lake Tribune. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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