New Twist on the Sex-Offender Registry: Financial Criminal Registry

Utah is most aggressive jurisdiction in publicly shaming financial criminals

By JEAN EAGLESHAM Updated March 24, 2016 4:51 p.m. ET

States have taken the idea of the sex-offender registry and applied it to everything from kidnapping to animal abuse. Utah is expanding it into new territory: financial crime.

An early version of the White Collar Crime Offender Registry, which has been online since February, includes more than 100 people convicted of tax, credit-card or insurance fraud; thefts from employers or friends; and bilking investors.

They include 41-year-old Kenneth Ray Wagner. “Eye Color: Blue. Hair Color: Blonde … Targets: Insurance company.”

The registry displays Mr. Wagner’s mugshot and explains that he was convicted in 2008 of fraud for dismantling his motorcycle, hiding the parts in a storage locker and claiming to his insurance company that it had been stolen.

The list makes Utah the most aggressive jurisdiction in the country when it comes to publicly shaming financial criminals. No other state operates such a list. The Securities and Exchange Commission often shields which offenders haven’t paid sanctions.

The agency last month refused a public-records request by The Wall Street Journal for information on sanctions paid by specific individuals, saying that providing such information would be “a clearly unwarranted invasion of personal privacy.”

The Financial Industry Regulatory Authority does require disclosure of events like some criminal convictions, regulatory actions and customer complaints. But it only applies to securities professionals, and the disclosures are intermingled in a database that includes more routine facts like work history.

Utah lawmakers say their list, which is being administered by the state’s attorney general, will help protect investors by offering easy access to information about con artists.

It could also create leverage to get felons to make their victims whole. Convicts who comply with court orders on time and pay restitution in full won’t appear on the list.

“That’s the carrot,” Utah Attorney General Sean Reyes said.

The new policy plunges the state into a broader debate about using name-and-shame tactics to punish convicts who have already served their time.

Registries have proliferated rapidly in the U.S., experts say. While some lists restrict access to law-enforcement agencies or fire officials, others can be viewed online by anyone, according to the National Conference of State Legislatures. In addition to the 50 states that publicly track sex offenders, five states including California require registration for arson. Minnesota, Illinois and six others maintain lists of methamphetamine producers. In Indiana, a public website lets visitors use Google Maps to find the location of homes that have been used as meth laboratories. Tennessee requires registration for animal abuse— something nine other state legislatures are debating. Florida law requires registration by anyone convicted of a felony of any kind for up to five years after completing the sentence.

Utah itself maintains a sex-offender and kidnap-offender list, as well as its new financial-crimes registry.

In all, the number of Americans on such lists will soon approach a million, if it isn’t already there, said J.J. Prescott, a law professor at the University of Michigan. He warned of possible unintended consequences from applying a public alert designed for sex offenses to other crimes, such as the risk of drug-offender registries being used by addicts to find suppliers.

“Do we want to be a nation of registries?” asked Douglas Berman, a law professor at Ohio State University.

Utah’s white-collar registry will include anyone convicted of second-degree frauds or other financial felonies since January 2006. A total of about 230 people are expected to be on the registry when it is formally launched in a few months, officials said.

The state will generally keep people registered for 10 years after a first offense. A second offense adds another decade, and people with three convictions never get off.

Mr. Wagner’s lawyer, Tara Haynes, said he already has paid a considerable price for his crime. He appeared on the list after serving 90 days in county jail and being ordered to pay more than $16,000 in restitution.

“He is not a white-collar criminal,” Ms. Haynes said. “He’s a blue-collar construction worker.”

Utah lawmakers voted last year to create the registry to stem what they called a growing tide of white-collar crime in the state, particularly by con artists preying on its close-knit religious communities.

Convicts need to fill out a form to register, arrange to have a photo taken and update their address and phone number if they change.

All but one entry in the early version of the registry includes a photo, typically a mugshot, while some also list aliases such as “ Missy Moniker” or “Connie.”

The site has some glitches. It included one man who died of cancer last year—he was removed after The Wall Street Journal sent officials a link to his obituary—and another where the wrong offense was initially shown.

Mr. Reyes said the state is still vetting the registry, including by asking offenders to check the accuracy of their entries. “We want to be fair,” he said.

Some legal experts say Utah’s approach could be an improvement on federal efforts to encourage restitution.

“I don’t know if it will work, but whatever else we’re trying isn’t working so well,” said Mr. Berman, the Ohio State law professor. “Given how low the recovery rate is for court-imposed restitution, we don’t seem truly committed to having that form of punishment go beyond symbolism in some cases.”

The SEC has yet to collect $9.4 billion of $17.7 billion of sanctions it has imposed in the last five fiscal years, according to data on its website.

Defense lawyers argue the restitution provision could favor wealthy criminals while punishing those who struggle to make amends.

Mr. Wagner, for example, fell behind in paying the $16,493.38 restitution that he owed American Family Insurance, the company that he defrauded. He eventually paid the insurer but still owes a $336 fine, court records show. Because he has paid the restitution, he can appeal to come off the registry five years after he is finished serving his probation.

The question of whether Utah’s registry violates defendants’ rights could end up in court.

Clair Rulon Hawkins, a former employee of a Utah real-estate firm, was convicted in 2013 of defrauding an investor who lost $852,000 deposited on two lots of land that Mr. Hawkins helped sell. Mr. Hawkins served four months in Salt Lake County jail and a halfway house. He remains subject to a restitution order for more than $1.4 million.

The 50-year-old is appealing his conviction. He also plans a legal challenge to his inclusion on the Utah registry, arguing it violates his constitutional rights to due process, privacy and economic liberty, his lawyer said.

A spokesman for the attorney general declined to comment on Mr. Hawkins’s case.

State lawmakers and other officials hope their idea will catch on nationally. Mr. Reyes, the attorney general, said his office has been contacted by legislators in several states as well as by federal prosecutors interested in replicating the experiment.

“I know we’re the first in the nation for doing it,” said Michael McKell, a Republican who sponsored the bill in the Utah House to create the white-collar registry. “I certainly don’t think we will be the last.”

Corrections & Amplifications

The SEC often shields which offenders haven’t paid sanctions. An earlier version incorrectly said the agency shields the identities of offenders.

Source: http://www.wsj.com/articles/financial-crime-a-new-twist-on-the-sex-offender-registry-1458811801

2 comments for “New Twist on the Sex-Offender Registry: Financial Criminal Registry

  1. March 25, 2016 at 1:08 am

    Modify the Public Sex Offender Registry
    1 ~ Almost 844,000 American Citizens Marked for Excommunication
    Hundreds of Thousands of men, women and children who are NO threat to society have been marked excommunicated from society at the expense of tax payers due to having been placed upon a public sex offender registry.
    2 ~ Rapist, Child Molester, Danger to Your Children?
    If you see that a Sex Offender has moved into your neighborhood, would you not want to know for sure, THIS PERSON IS VERY DANGEROUS to my family. Presently, this is NOT the case. Presently, the registry is filled with people who have NEVER even touched a child or any other living thing inappropriately. This needs to change. The registry needs to be modified to ONLY show those who are in the community who are a threat to you or your family.
    3 ~Professional Evaluations to Determine the Dangerousness to Society Never Done on Most on the Registry
    All of this with no real evaluation to determine if they are in fact a danger / threat to the safety and well-being of the nation.
    The public registry needs to be modified in a way which will show only the true threats to society. Presently, professional studies have shown only approximately 5 percent of all who are on the registry, (42,200 out of over 844,000) actually present any danger for recidivism.
    4 ~ The collateral damage to the innocent children and spouses of a family member who is on the registry is exactly the same as being on the registry themselves.
    Total excommunication from society, work and housing. Many children of ex-offenders are bullied and beaten at school or in their communities. Some have even committed suicide due strictly because their parent is on the registry and the stigma applied to them associated with the public shaming of their parent.
    THERE IS NO END TO THE PUNISHMENT
    Many of the laws are applied for 25 years or lifetime leaving no reason for the person to ever go on and lead a productive life, as they have been branded for life. Excommunicated from Jobs, Rental Housing and just about anywhere to live due to residency restrictions.
    With 95% of the people who are on the public registry never to recidivate, one of my questions is this; Why do we, the tax payers keep supporting the billions of tax dollars being spent on having 844,000 men, women and children on the registry who pose no threat of recidivating? Another question, why do we keep paying for their medical, dental insurance, food stamps, housing, Utilities, as most of these people are on welfare due to NOT being able to get a job, directly related to the stigma of the public registry.

    This is THE LARGEST human rights violation perpetrated by the United States Government in our generation.

    • D.C.
      May 12, 2016 at 9:33 pm

      Agree fully with article. Being on the sex registry should be only those who have not served their time in prison or jail, probation etc. Those who have had a hands on victim should have a five year registry requirement etc. Depending on the type of crime and the input from counselors for repeat that is a different story, especially violent sexual crimes. If the crime is bad enough some people will not get out of prison so no worries there.
      The sex offender registry is just outrageous in what it does to the sex offender. The sex offender has finished the sentence, gone to counseling, did this, did that, has completed what is required by society. After that the person is labeled for life or 25 years, so how is this person going to get a job? Live anywhere? Not be harassed, not be mentally scared for life by this public humiliation. You all have done something your not proud of, but now your going to be listed on the internet for doing that thing and everyone will know about it. How does that make you feel, There is no forgiveness for any of it, your labeled for life when a lot of people do not pose any threat to society, their offense maybe the first time. Granted, every case needs to be determined of course, but so many people who should not be on the registry are on it and can’t get anywhere in life due to this crazy, unconstitutional sex offender registry.

      The registry does nothing but get an agency millions upon millions to send out propaganda to let the misinformed public know they are being protected. This is a bunch of bologna. The registry doesnt protect people at all. It needs to be changed because it is costing society a lot more than just money. Everyone is so afraid and labels nonthreatening people to their doom.

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