Affinity frauds target members of identifiable groups, such as the elderly, or religious or ethnic communities. The fraudsters involved in affinity scams often are—or pretend to be—members of the group.

Fraudsters may enlist respected leaders from the group to spread the word about the scheme, convincing them it is legitimate and worthwhile. Many times, those leaders become unwitting victims of the fraud they helped to promote.

These scams exploit the trust and friendship that exists in groups of people. Because of the tight-knit structure of many groups, outsiders may not know about the affinity scam. Victims may try to work things out within the group rather than notify authorities or pursue legal remedies.

Affinity scams often involve Ponzi or pyramid schemes where new investor money is used to pay earlier investors, making it appear as if the investment is successful and legitimate.

In New York, affinity fraud is considered a serious criminal offense. It is a type of investment fraud that targets specific groups, often exploiting the trust and relationships within those communities. New York State law, under the General Business Law, Article 23-A, the Martin Act, grants broad powers to the Attorney General to combat securities fraud, which would include affinity fraud. The Martin Act allows for both civil and criminal prosecution of securities fraud, without the need to prove intent to defraud. Additionally, federal laws such as the Securities Exchange Act of 1934 and the Securities Act of 1933, enforced by the Securities and Exchange Commission (SEC), also apply to affinity fraud cases. These laws prohibit fraudulent activities in connection with the offer, sale, or purchase of securities. Victims of affinity fraud in New York are encouraged to report the matter to the Attorney General's office or the SEC. They may also pursue private legal remedies, which could include filing a lawsuit for damages incurred due to the fraud.