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SALT LAKE CITY — The state has a word of warning for some Native Americans who may be targeted by investment scammers.
In the wake of a recent landmark federal settlement, the Utah Division of Securities has issued an alert to educate potential investors, including tribal members receiving lump sum payouts from the $3.4 billion Indian Trust Settlement.
The settlement arose from a class‐action lawsuit brought by Native American representatives against the federal government. Reached in 2009 and 2010, the settlement resolved claims that the government violated trust duties to individual Indian beneficiaries.
Our fear is that as we've seen with other high-profile lump sum payments, (then) shortly after the con men follow the news and they see people getting large checks and (approach them with a) great investment opportunity to turn your $3,000 or $4,000 check into $10,000.
–Keith Woodwell, Utah Division of Securities
The money is "reparations, essentially, for treatment of Native Americans going back over 100 years," according to division director Keith Woodwell.
The president signed the legislation authorizing $3.4 billion in funding to be distributed among registered Native American tribe members nationwide.
Woodwell said recipients of highly‐publicized payouts often become targets for investment fraud.
He noted that members of religious or ethnic communities, professional organizations, or other close‐knit groups are often targets for similar types of scams because of the high level of trust that often exists within the groups and the tendency of their members to share information with each another.
The division is sharing this information with Utah's tribal community as an effort to educate them about affinity fraud so that if they are approached with any "get rich schemes," they will know what state resources are available to them for information.
Woodwell said the state is concerned that individuals receiving lump sum payouts — that may be as much as a few thousand dollars — could become potential targets for investment scams and other frauds.
"Our fear is that as we've seen with other high-profile lump sum payments, (then) shortly after the con men follow the news and they see … people getting large checks and (approach them with a) great investment opportunity to turn your $3,000 or $4,000 check into $10,000," Woodwell explained. Scam artists may promise very high returns with little or no risk, but individuals receiving payments related to the settlement should be wary.
Qualified tribal members should expect to receive their payments later this year.
"They will try to use names of other tribe members who are investing to talk up the credibility of the program, and they leave a trail of tears behind," Woodwell said. "People just end up out of their money."