Category Archives: Criminal Exploitation

False Facts Empower Financial Abuse

Here is a fine example of how an article by a nationally syndicated columnist can mislead and misdirect the reader.

Scammed by your own family More than half of elder abuse financial cases involve an adult child
By Lew Sichelman Published: Mar 23, 2012 12:01 a.m. ET

http://www.marketwatch.com/story/scammed-by-your-own-family-2012-03-23

THE FOLLOWING ARE A FEW QUOTES I PULLED FROM THE ARTICLE WITH A DISPUTING COMMENT:

“More than half of elder abuse financial cases involve an adult child… About 60% of the financial-abuse cases substantiated by adult protective services involve an adult child. Sons are most likely to rip off their parents or grandparents, the study found, even more so than a paramour, bogus contractor, fly-by-night handyman or shady lender…”    

The author took this information from a 2009 MetLife’s Mature Market Institute report… but in June 2011, MetLife released another national report correcting their mistake – family members are NOT the most common offenders. The author wrote this article later in March, 2012, ignoring the correction.  Although they have been at times, most of my cases did not involve the adult children as the abusers.

“And it is all legal, according the elder abuse authorities in Los Angeles….Unless someone is declared incompetent, they can give away all their money to anybody they want to as long as they have not been declared incompetent….”

This is very misleading for someone reporting financial crimes against their loved ones. Although lack of capacity does have to be proven, an exploitation victim does NOT have to be formally declared incompetent, or under guardianship to be a victim…In fact, over 90% of my cases over 30 years, involved someone who did not have the capacity to give consent reference financial matters, due to short-term memory loss. This was confirmed by expert testimony/medical records, but there was no formal declaration of incompetency and the victim was not under a formal guardianship at the time.

“Loneliness and isolation raise the risk of elder financial abuse, which covers a lot of territory, including theft, misuse of financial instruments such as powers of attorney, investment fraud, home repair schemes and identity theft. The high rate of dementia among seniors makes them a tempting target, especially when they own their homes free and clear and have good credit ratings.”

This quote is spot on!  Thanks for reading and feel free to share.

http://www.marketwatch.com/story/scammed-by-your-own-family-2012-03-23

Link

Growing financial exploitation prompts legislation mandating advisers to report suspected abuse

http://www.wsj.com/articles/officials-seek-clampdown-on-elder-fraud-1451434278

Donald Chambers backs requiring financial advisers to report suspected fraud involving older people.

Grappling with growing financial exploitation of the elderly, state officials are pressing for laws that require financial advisers to report suspected “elder fraud” to authorities.

But the mandate faces pushback from the financial industry, which says it could result in a massive number of reports that turn out to be false.

People 60 years and older were involved in 171,230 fraud complaints tracked by the Federal Trade Commission in 2014, more than double the number in 2010, although some of that jump could come from improved reporting.

American retirees are exercising greater control over their finances, given the decline in traditional pension plans. But the complexity of managing and investing savings poses a challenge, particularly as the U.S. population ages, resulting in a greater number of people projected to get dementia. That has opened up avenues for exploitation.

The fraud ranges from sweepstakes scams and bogus investment schemes to dishonest caregivers or family members skimming funds. In some cases, investment advisers or stockbrokers churn accounts through unnecessary trades, resulting in high fees or losses.

Elder financial abuse is expected to “grow dramatically,” according to Rick Fleming, head of the Office of the Investor Advocate at the U.S. Securities and Exchange Commission. Older Americans lost at least $2.9 billion to financial abuse in 2010, up 12% in two years, according to Metropolitan Life Insurance Co. , which tracks issues facing the elderly.

To help curb the problem, a coalition of state securities regulators in September proposed a model state law that would require financial advisers, including brokers at large investment houses and independent advisers, as well as their supervisors, to report suspected elder financial fraud to both a state securities regulator and an adult protective-services agency.

The legislation would mandate prompt reporting by a financial adviser who “reasonably believes that financial exploitation” of an older person “may have occurred, may have been attempted, or is being attempted.”

The bill gives brokers and advisers civil immunity from privacy violations for reporting suspected fraud, and allows them to put a temporary hold on suspicious account disbursements.

Supporters say advisers and brokers are well-positioned to raise early warnings about exploitation that can leave elderly victims with scant money left for necessities and little time to rebuild savings.

“In the long run we’ve got to say the greater good is served by making it mandatory and trying to protect the vast amount of people,” said Joseph Borg, Alabama’s securities commissioner. He plans to introduce such legislation early next year.

But financial-industry trade groups are pushing back against a key part of the North American Securities Administrators Association’s proposal. They say its reporting mandate would overburden state agencies, while some financial advisers worry they could be sued if they miss an abuse case.

Roughly 40% to 50% of all “red flags” about suspicious activity turn out to be false, according to an Oct. 29 letter to NASAA from the Securities Industry and Financial Markets Association, the main Wall Street trade group. A voluntary reporting system would allow firms to check out such reports internally before going to authorities, it said. Some financial firms already have in-house units that monitor for elder confusion or abuse.

Laws requiring professionals such as social workers to report elder abuse are common. Roughly half of the states also mandate elder fraud reporting by certain financial professionals.

But the laws don’t always extend specifically to financial advisers. Kansas’ law doesn’t generally treat brokers as mandatory reporters, according to the state’s securities commissioner. Meanwhile, Ohio’s law requires lawyers to report suspected elder financial exploitation, but not financial advisers.

In New York state, which doesn’t have a mandatory reporting law, only one in 44 cases of elder financial exploitation was reported to authorities in 2008, according to a 2011 study by Cornell University and aging agencies.

“We’re losing valuable time that we could provide that safety net for that elderly individual,“ said Judith Shaw, NASAA’s president and securities administrator in Maine, which lacks a mandatory fraud-reporting law.

That troubles Donald Chambers, 86, a retired University of Kansas professor who manages his investments through a broker but said he may not be far off from having to delegate the task to a family member or his lawyer.

If his broker had any suspicions he was being defrauded, Mr. Chambers said he would feel better knowing that the broker was obliged to bring those hunches to an investigator. It is “simply a wise idea,” he said.

Similarly, Philip Marshall believes mandatory reporting might have helped his late grandmother,  Brooke Astor, the New York philanthropist. She was financially exploited by her son, Mr. Marshall’s late father, as she suffered from dementia, a jury found in 2009.

“Certainly there were irregular patterns in terms of financial transactions,” said Mr. Marshall, a university professor and advocate for the prevention of elder financial abuse.

“There is no black eye, no blood, but the truth is, this ends up breaking victims,” said Elizabeth Loewy, the former chief of the elder-abuse unit in the Manhattan District Attorney’s Office.

Every state has adult protective-services agencies to investigate reports of abuse, neglect and exploitation of older adults. But dementia, embarrassment, or reluctance to report family members all play roles in low disclosure rates, said Kathleen Quinn, executive director of the National Adult Protective Services Association, a group for those agencies.

In a 2014 survey by the group, 44% of agency officials said financial institutions were frequently unwilling to provide a client’s records, and 40% reported long delays obtaining records.

The Financial Industry Regulatory Authority, Wall Street’s self-regulator, recently proposed its own rule to allow firms to put temporary holds on suspicious account disbursements, though the proposal doesn’t address mandatory reporting.

Currently, even when financial advisers suspect an aging client is being taken advantage of, many say they are hamstrung by strict rules governing the execution of trades and processing of withdrawals, and worry about violating privacy laws if they report concerns.

The current system, “kind of puts advisers and firms in between a sort of legal rock and hard place,” said Steve Kline, director of state government relations for the National Association of Insurance and Financial Advisors, a professional association. The proposed rules aim to provide clarity.

New study, bill puts focus on senior fraud

Teaching police dispatchers about fraud vulnerability might lead them to encourage senior callers who fit Lichtenberg’s profile to file complaints.

|By Diane C. Lade, Sun Sentinel

New efforts are underway to combat what aging experts say has become one of the top threats facing elders: losing their savings to con artists and financial predators.

Gerontologists at a Detroit university have created, for the first time, a potential victim profile that could alert professionals and families to which seniors are most psychologically vulnerable to fraud.

And a bipartisan bill filed last week by U.S. Rep. Ted Deutch, a Democrat from Boca Raton, and two other representatives would create a federal advisory office dedicated to protecting elders from fraud and ensuring victims’ complaints are handled efficiently and quickly. Deutch was joined by Congressmen Vern Buchanan, R-Fla., and Peter Welch, D-Vt.

Deutch’s bill mandates that the Federal Trade Commission, which would house the new office, “immediately” funnel elder fraud and exploitation reports to appropriate local law enforcement or regulatory agencies for investigation, something the FTC is not required to do now. The new office also would alert elders to new scams and educate them about investment fraud,

“I am impressed, and not in a positive way, with how much time, energy and sophistication is going into some of these scams,” said Peter Lichtenberg, director of Wayne State University’s Institute of Gerontology and the researcher behind the elder fraud victim profile. “We need to be thinking about who is vulnerable, and know more about how older adults make their financial decisions.”

His study of 4,400 people age 60 and older found those with high depression levels, and who scored low on tests gauging how valued and connected to others they felt, were almost 300 percent more likely to report having lost money to scams or fraud. None of Lichtenberg’s subjects had Alzheimer’s or any memory-impairing medical conditions that can leave elder patients open to fiscal predators.

The study, done in conjunction with the Illinois Institute of Technology and published in the current issue of Clinical Gerontologist, also suggested there’s an additional issue for younger seniors, or those under age 74, who were fraud victims: They were more likely to report being financially dissatisfied.

“These were people looking to make more money for their retirement and didn’t have many avenues available,” Lichtenberg said.

Lichtenberg’s next project is to develop a rating scale and checklist that could guide health-care workers, law enforcement and aging service professionals in determining when a senior might be at risk for fraud. He plans to create public education materials on fraud vulnerability for elders and their families as well.

Jacquelyn Browne, director of the Master of Arts in Gerontology program at Nova Southeastern University, said Lichtenberg’s work shows how isolation and mental health issues affect seniors in ways many people don’t realize.

“Financial vulnerability is an area that probably does not get assessed or isn’t on a clinician’s radar,” she said. “This looks at the bigger picture of looking at an elder’s quality of life.”

Financial abuse of elders has become a top concern for regulators, and spurred Deutch’s bill. Complaints to the FTC regarding fraud against people age 60 and older almost doubled between 2010 and last year, with 115,892 filed in 2012 — one quarter of all fraud complaints.

There were 1,264 allegations of senior financial exploitation in Broward and Palm Beach counties, and 8,477 statewide, filed with Florida’s abuse hotline last fiscal year.

Assistant State Attorney Richard Sherman Jr., with the Broward State Attorney’s Office elder exploitation unit, finds seniors in his fraud cases often are living alone, have a disability and are sad. “They latch on to people who appear to take an interest in them, but then who rob and betray them,” he said.

Experts agree that senior exploitation often goes unreported, as the victims are in denial or feel ashamed and guilty about losing their money.

Robin Taylor said her father, a Hollywood retiree who died at 95 last month, wrote multiple checks totaling $90,000 to a woman half his age who had befriended him. Taylor said her dad, a World War II veteran and former salesman, for more than a year refused to believe the woman was lying about needing cancer treatments and money for other emergencies, and believed her promises to repay him.

The two had met very shortly after the elderly man’s wife had died “and I think my father was very lonely, very angry about being old,” said Taylor, a former deputy district attorney in Colorado, who eventually persuaded him to file a police report. “He felt good being able to help her.”

Broward SAO investigator Joe Roubicek said teaching police dispatchers about fraud vulnerability might lead them to encourage senior callers who fit Lichtenberg’s profile to file complaints. “We hear that sometimes seniors try to report fraud but are turned away by law enforcement telling them it’s a family matter,” he said.

Financial abuse costs elderly billions

As Boomers age, scammers find targets ripe for taking

By Herb Weisbaum ConsumerMan
msnbc.com contributor

NBC NEWS.COM http://www.nbcnews.com/id/41992299/ns/business-consumer_news/t/financial-abuse-costs-elderly-billions

Mickey Rooney took on a new role last week, as an advocate for abused seniors. His personal story of betrayal was painful to watch. The 90-year-old actor bravely shared the shame and humiliation of elder abuse with members of Congress and the entire country.

“For years I suffered silently, unable to muster the courage to seek the help I knew I needed,” he said.

Rooney told a Senate subcommittee a family member withheld food and medicine and meddled in his personal finances. If this could happen to him, Rooney said, it could happen to anyone. He urged lawmakers to do something about the growing problem — and do it now.

Financial abuse of the elderly is a serious problem, even though we rarely hear about it. A study done by MetLife Mature Market Institute in 2009 estimated the financial loss from abuses to be at least $2.6 billion a year. But that’s just an educated guess.

“Right now, we truly don’t know how much exists,” says Professor Pamela Teaster, who chairs the department of gerontology at the University of Kentucky and is on the board of the National Committee for the Prevention of Elder Abuse. “We believe it is an incredibly under-reported problem.”

The MetLife study, which Teaster helped write, found that only one in six cases of elderly financial abuse is ever reported. Based on new information, she says, that figure now appears to be conservative.

“We have hit some hard financial times and we’re seeing the exploitation increasing,” Teaster said.
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The opportunities for abuse of the elderly are almost limitless. The exploitation can take place at a care facility where a staff member is able to cozy up to a resident to get jewelry, money or power of attorney. In other cases, family members believe they are entitled to their parents’ or grandparents’ money and find ways to take it.

Con artists also prey on older people, because as a group they control a tremendous amount of this country’s wealth. And in many cases, poor health — both physical and mental — makes them easy targets for financial predators.

Suspect elder abuse?

What should you do if your suspect elder abuse? Report your concerns. Remember: Most cases of elder abuse go undetected. Don’t assume that someone has already reported a suspicious situation.

To report suspected abuse in the community, contact your local adult protective services agency. Call the Eldercare Locator at 1-800-677-1116 or check for your state’s reporting number here.

To report suspected abuse in a nursing home or long-term care facility, contact your state specific agency. To find the listing, click here.

Source: National Center on Elder Abuse

“It can be a complete stranger, a dishonest telemarketer or someone who just befriends an older person, either through the phone, Internet or some happenstance meeting,” explained Bob Blancato, national coordinator of the Elder Justice Coalition. “It’s sad to see them take advantage of these vulnerable people.”

One family’s tragic story
Katsu and Charles Bradley of Tacoma, Wash., owned their home and had set aside a nice nest egg for their retirement years. When they could no longer care for themselves because of advanced forms of dementia, the family hired Norma Cheesman to be a live-in caregiver.

The Bradleys’ daughter, Caroline Moye of Seattle, tells me Cheesman “took everything” her parents had worked and saved for their entire lives.

“She thought she had found the goose that laid the golden egg,” Moye said. “And in a matter of 10 months she made my parents homeless and penniless.”

The prosecutor in King County, Wash., has charged Cheesman with various felonies, including theft and forgery. Court papers say within months of moving in, Cheesman convinced 86-year old Charles Bradley to give her power of attorney, name her as beneficiary of his estate and disinherit his wife.

Cheesman is also accused of facilitating a reverse mortgage on the Bradleys’ house (which the couple owned free and clear) as a way to fill their bank account with a large sum of money which she could then steal. The prosecutor claims Cheesman literally guided Katsu Bradley’s hand to sign her name on the loan documents because she was too infirm at the time to sign her name herself.

Court papers say Cheesman then had Mr. Bradley withdraw huge amounts of cash from the couple’s savings and persuaded him to buy the home she was living in.

In all, the Bradleys’ estimated cash losses are put at more than $300,000. And the home they lived in for 45 years went into foreclosure. Charles and Katsu Bradley died within a month of each other in 2008 with just $374 in the bank.

Somehow Cheesman, the trusted caregiver, was able to do all this without the family finding out. To this day Caroline Moye finds that so hard to believe.

“I called my mom and dad every single day.” Moye said. “It’s not like we weren’t involved with my parents. But she pulled the wool over our eyes and was methodical in taking every single penny that she could.”
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Norma Cheesman has still not answered to the charges. She did not show up for several court hearings and no one knows where she is. A few weeks ago, a judge issued a warrant for her arrest.

It will take a village to tackle this problem
Experts who deal with elder abuse say it takes place in every community. And it’s sure to get worse as baby boomers move into their senior years.

“I think we need to prepare ourselves for a huge wave of more and more victims in the next five to 10 years, unless we train our law enforcement and prosecutors how to deal with it,” said Paul Greenwood, head of elder abuse prosecutions unit at the San Diego County District Attorney’s Office.

Greenwood says the hardest part of his job is finding out about abusers in the community. That requires people to report suspected abuse and for police to treat it like the serious crime it is.

California requires certain groups of people — bankers, clergy and health care providers — to report anything that might indicate financial exploitation of a senior.

Greenwood believes every state should have such a mandatory reporting law. He also believes every major prosecutor’s office in the country should have at least one person dedicated to financial elder abuse. He calls it a cop-out to blame budget constraints for not doing this.

“You’ll never meet a prosecutor who doesn’t prosecute DUIs for lack of money,” Greenwood said. “They wouldn’t dare not to prosecute them.”

When he talks to judges, Greenwood tries to explain that financial abuse of a senior is a violent crime, because it can have a devastating effect on that person’s life. Someone in their 70s or 80s may never recover from the financial loss.

“I do believe that in some instances it shortens their lifespan,” Greenwood told me. “I’ve seen cases where in two or three months after the crime, the victim seems to give up the will to live. In one case that was devastating, the victim committed suicide because he felt there was no reason to keep living.”

Pamela Teaster with the National Committee for the Prevention of Elder Abuse says we, as a society, need to make it clear that we will not tolerate this crime.

“We need to treat our elders better,” she said. “The bad guys need to be caught and punished.”

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Big Mouth Sami

Summary of a case involving a little guy with a big mouth arrested for exploitation of the elderly…and then solicitation to commit murder.

July 2000:

joe-pesciSami Jourdak was a 71-year-old vertically challenged person with an irritating high voice and he sure talked a lot.   The first time we met, he reminded me of some of the small, talky characters played by the actor Joe Pesci, but with white hair. He seemed harmless enough, though, and there was something sad about the guy.

Our paths crossed when he exploited a 94-year-old blind woman named Hillary. She was alert, trusting and courageous in many ways.

At the time, the two recently had met at her church and quickly developed what seemed a mutually beneficial friendship. He would take her out to lunch a few times a week and she would pay. He was tight on money and she loved to get out of her house, so it worked out quite well. It all seemed harmless enough.

But looks were deceiving and Jourdak was a dangerous man. Twelve years earlier he had been arrested and convicted for sexual assault on a child and spent two years in prison for that crime. This apparently harmless old man with the non-stop squeaky voice was a predator.
When they went out to lunch, Jourdak was slipping Hillary’s ATM card from her purse, making withdrawals, then replacing it without her knowing. It was too easy.

But after two weeks and more than $5,000 in withdrawals, Hillary’s home health aide caught Jourdak sneaking the ATM card back into the purse. When the aide approached him about it, he became very threatening and assured her that if she spoke to Hillary, she would regret it.
Instead, the aide went to the police and I became involved.

When I first approached Hillary, she was not only emotionally hurt but also angry that Jourdak had violated her trust. She agreed to wear a “wire,” a secret recording device that all cop-and-crime movies seem to include for some reason. Hillary said she would question him about the money when he came to visit her the following day.

Jourdak arrived right on time expecting to take Hillary to lunch, but instead she confronted him about his theft. My partner and I listened to the conversation from inside an unmarked police car parked in the neighbor’s driveway.

When confronted by Hillary, Jourdak admitted everything, but insisted that he took her money so that no one else could. He claimed that he was only trying to protect her. His defense was lame, we moved in and he was arrested.

I thought that this case had ended, but Jourdak had other ideas…..
He was furious at the home health aide because he suspected that she had tipped off the police. So he wanted her dead, just as he had threatened.
This time, Jourdak was more than all talk.

Jourdak’s cellmate was a “tough guy,” so to speak. He was someone with a violent background related to drugs and weapons violations. So Jourdak approached him about hiring a hit man to kill the home health aide for a few thousand dollars.

Jourdak said that, with the witness out of the way, he could both get revenge and probably beat the charges against him. His cellmate said that he would see what he could do.

Less than two weeks later, after Jourdak had bonded out of jail, he met with a stranger at a diner in Fort Lauderdale. His cellmate indeed had arranged a rendezvous with a hired killer.
The hit man was a big, sleazy-looking middle-aged man who dwarfed Jourdak’s small body. Jourdak spent a full hour with him and wouldn’t stop talking, of course. That was his nature. He said that he wanted the health aide killed and didn’t care how. He also explained that he had been taking Hillary’s ATM card and everything had been going just fine until the aide had butted in and ratted him out to the police.

In the end, Jourdak agreed to pay $3,000, but only after the killing. The hit man said that he wanted the money before the murder. Jourdak agreed and they went their separate ways, planning to meet the next day to exchange the payment.

Jourdak drove home to his apartment, but the hit man drove to the rear parking lot of the diner where the rest of us had been listening from behind tinted windows in unmarked cars. The hit man was actually an ATF agent and I, along with several other detectives and agents, had been monitoring the meeting from the start.

Sami Jourdak simply was a victim of very bad luck.  His cellmate was a tough guy all right, but also a confidential informant for an ATF agent. He had reported Jourdak’s intentions to his agent, who in turn had called me.

Those of us working the case decided that it would be prudent to arrest Jourdak quickly. I found him on that same day in his apartment complex doing his dirty laundry.

I arrested him again, this time for solicitation to commit murder. He cried like a baby when he was loaded into the back seat of a squad car and carried off to jail.

The hit man in this case had been an impostor, yes – but so was Jourdak, and he gave perfect example of how predators who appear completely harmless can be the most dangerous predators of all.

by Joe Roubicek, copyright 2010 Coral Springs