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Home Focus Accounting & Finance America’s elderly losing $37B a year to fraud schemes

America’s elderly losing $37B a year to fraud schemes

June 15 is Elder Abuse Awareness Day; look for red flags of elder financial abuse

VBJ File

During her years as CEO and Founder of Acuity Forensics, a nationally recognized forensic accounting firm in Vancouver, Tiffany Couch has investigated all sorts of financial fraud cases. But some of the most heartbreaking, according to Couch, are the ones that involve elder financial abuse.

“One of the cases I worked involved an elderly woman who had no children and whose husband had recently died,” Couch recalled. “A woman who attended the same church as the elderly woman befriended her over the years – took her to get her hair done, to Walgreens, grocery shopping, etc. After a few years, the elderly woman signed over Power of Attorney to this woman. The older woman later developed pretty advanced dementia, so the caretaker basically brought this woman to live in her home and sold the elderly woman’s home for about a quarter of a million dollars for cash.”

“About six months later, the woman’s husband had a brand new garage, she had a brand new kitchen and a brand new Escalade,” Couch continued. “The caretaker woman then called Adult Protective Services and said, ‘I can no longer care for this woman, you need to come get her.’ When they came to pick the elderly woman up, she hadn’t been bathed and was in bad physical condition. When Adult Protective Services saw this, they called the police, the police eventually called me and I went through the financials and discovered a long-term fraud that had been ongoing.”

Today, June 15, is Elder Abuse Awareness Day, and according to a report issued in 2015 by True Link Financial, American’s elderly are losing $37 billion a year due to fraud schemes, theft and embezzlement. Although most of the statistics on elder fraud abuse are not broken down by state and/or county, a report from the American Journal of Public Health indicates that one in 18 seniors is victimized nationally.

“The 2017 census reported that Clark County’s population is 474,643,” Couch said. “If the county follows the same trend as nationally, it would indicate that more than 26,000 Southwest Washington seniors are victims of financial fraud and abuse every year.”

Couch said that almost 60 percent of cases involve a perpetrator who is a family member.

Here are just a few common elder fraud abuse schemes that Couch and others in her profession often see:

  • Caregiver fraud, which can be a hired stranger or “well-meaning” family member: Fraudulent caregivers knowingly take advantage of vulnerable, frail people who are depending on them for their help. The caregiver gains the trust of the elder and eventually gains access to personal and financial accounts, resulting in identify theft, forgery, embezzlement and property theft. Couch said caregiver fraud is what Acuity Forensics sees most.
  • The “sweetheart scam:” A well-educated, well-to-do senior is somehow duped into sending large quantities of money to a total stranger.
  • Funeral and cemetery scams: Funeral claims deceased owed them money and tries to extort cash from the relatives to settle fake debts; funeral takes advantage of widow/widower’s grief and ignorance about the cost of burial in order to jack the price up.
  • Telemarketing/phone scams: Couch said these are the most common fraud scams. Older people generally make twice as many purchases over the phone, and since there’s no face-to-face interaction and no paper trail, these scams are hard to trace. Money is often solicited for fake charities, or the con gets the victim to wire or send money on the pretext that the person’s child or other relative is in trouble and needs money.
    Some other common scams include email phishing, lottery scams, reverse mortgages, IRS scams and Medicare scams.

In regards to IRS scams, Aaron Dawson, CPA and shareholder at Opsahl Dawson in Vancouver, offers these five things for people to remember that scammers often do, but the IRS will not do. Any of these five things is a tell-tale sign of a scam.

The IRS will never:

  • Call to demand immediate payment, nor will they call about taxes owed without first having mailed you a bill.
  • Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.
  • Require you to use a specific payment method for your taxes, such as a prepaid debit card.
  • Ask for credit or debit card numbers over the phone.
  • Threaten to bring in local police or other law enforcement groups to have you arrested for not paying.

Couch said that she does occasionally have some cases that end up seeing favorable outcomes, such as one she worked on that involved an elderly woman and her developmentally disabled son who were living in trailer in Puyallup. During one particularly bad winter, the woman’s sister was unable to contact her and the son, so Adult Protective Services was contacted to go out and check on them. When they arrived, it was discovered that there was no heat in the trailer and the woman’s health was failing, and she was unable to properly care for her disabled son.

“Adult Protective Services discovered the woman had a successful, well-off son in the Bellingham area, so they contacted him and he said, ‘yes, bring them up here and we’ll take care of them and get them into an apartment,’” Couch recalled. “The woman gave the son in Bellingham Power of Attorney. In the months before moving to Bellingham, the woman had been living on about $500 a month or less, but as soon as the Power of Attorney came through, the son paid off his mortgage, his line of credit, he went out and bought new furniture for his house, new jewelry for his wife, etc. This went on for about two years until one day the woman’s rent check bounced.”

“The landlord went to check on the woman and her disabled son, and discovered they weren’t turning on the heat or anything, so the landlord called Adult Protective Services,” Couch continued. “When they called the son, he told them he couldn’t handle taking care of his mom or brother anymore, and hung up. It was discovered that the woman had had about half a million dollars in the bank, and by the time the police and I got involved, she had less than $600 to her name. Since the son was well-off, authorities were able to get the money back to the woman, and the disabled son was able to get help through Health and Human Services.”

To see a list of some of the warning signs of elder financial abuse, visit https://dfi.wa.gov/financial-education/information/warning-signs-elder-financial-abuse. In order to learn more about preventing fraud and to see some FBI tips on telemarketing, visit https://www.aarp.org/money/scams-fraud/info-2015/how-to-spot-early-warning-signs-of-elder-financial-abuse.html.

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