It happens all the time but often the community and the physical community don't overlap, but check out /r/MLM or other similar subreddits and there's whole groups of scammers who target particular groups (church, social, retired, veterans, etc) with particular pitches designed for that group.

Because if some rando tells you to join Amway or invest in AmCOIN™ you will tell them to get bent, but if it's a trusted friend, you're much more likely to be open.

It's disgusting, but it happens. And in a small town, likely everyone goes to the same church or two, hangs out at the same bar, etc. It can spread like wildfire, though usually after the first few scams it becomes known and starts to die out a bit.

Sometimes you recognize the situation and decide to "participate" (read: lose some small amount of money in the scam) to stay in the community.