What Is the Elder Fraud Industry? 1 Kirkman Elder Fraud Wars - PDF document

Kirkman – Elder Fraud Wars 7/17/2020 (Courtesy Chapel Hill CROP Walk Facebook Page) What Is the Elder Fraud Industry? 1

Kirkman – Elder Fraud Wars 7/17/2020 Foreign Sweepstakes (Spain, Jamaica, UK, Russia, Grandparent Scams Moldova, Canada, Costa Rica) (U.S., Canada, Russia) Home Repair (U.S.) IRS, Treasury Agent Scams (India, Pakistan) Medicare Scams Sweetheart Scams (India, China, U.S.) (U.S., Nigeria, Ghana, UK) Driveway Paving Scams (U.S.) Financial/Estate Planning Fraud (U.S.) Money Transfer Schemes Foreign Lotteries “Nigerian 419 Fraud” (Spain, Jamaica, UK, Russia, (Several W. African countries) Philippines, Canada) Worst Individual NC Victimizations Foreign Sweepstakes Grandparent Scams $900,000 – plus, Asheville $65,000, Charlotte Area Home Repair IRS, Treasury Agent Scams $275,000, Cary $60,000, Charlotte Medicare Scams Sweetheart Scams $25,000, Durham $1.2 million, Triad area Driveway Paving Scams $80,000, Greensboro Financial/Estate Planning Fraud $ 2 million – plus, Durham Area Money Transfer Schemes Foreign Lotteries “Nigerian 419 Fraud” $600,000 – plus, Jacksonville $3.2 million “Because that’s where the money is.” Willie Sutton, upon being asked why he robbed banks The Saturday Evening Post, Jan. 20, 1951 2

Kirkman – Elder Fraud Wars 7/17/2020 Forbes Magazine 5-16-18 Hallmarks of the Elder Fraud Industry • Repeat Victimization • “Super Victims” • Typically More Than 75 Years Old • Seldom Reported or Prosecuted • And… …the Deliberate Exploitation of Age-Related Vulnerabilities 3

Kirkman – Elder Fraud Wars 7/17/2020 Vulnerabilities Elder Fraud Criminals Exploit * • Fixed income, • Loneliness/Isolation financial • Depression insecurity • Med Cycles • Easy access to funds, equity, credit • Impaired vision, • Desire to be a “Decision Maker” hearing, mobility Again • Age-related • Obsessions cognitive decline •Accessible/at home *Templeton V, Kirkman D, “Fraud, Vulnerability and Aging,” Alzheimer’s Care Today , Nov. 2007. COMMONLY EXPLOITED MILD COGNITIVE IMPAIRMENTS • MEMORY LOSS • SLOWER TO PROCESS INFORMATION • IMPAIRED JUDGMENT WHEN EXCITED OR UPSET • OBSESSIONS & COMPUSLIVE BEHAVIORS “I Make ‘em Feel Like They Are Somebody Again.” 4

Kirkman – Elder Fraud Wars 7/17/2020 “I make them feel like they are Somebody again!” “Super Victims” • $10,000-plus in losses to same scam • A new super victim reported every 2-3 days • Repeat victimization • The more the victimizations, the harder it is to stop • 10-12 victims with $100K - $500K in losses reported to the Atty. Gen. Office per year “RELOADING” The Key to Repeat Victimization • Variations on the same scam, or • A Variety of different scams • Each scam sets the table for the next one • “I didn’t want the one-time victim. I didn’t want the two-timer. I wanted to sell these people 10 times!” (Shover N., Coffee GS, The Origins, Pursuits and Careers of Telemarketing Predators, Final Report to the National Institute of Justice, US Dept. of Justice 2002) 5

Kirkman – Elder Fraud Wars 7/17/2020 Targeting Techniques Foreign Sweepstakes Commercially available lead lists, Press-1 robocalls (random) Grandparent Scams Social media Home Repair Visual surveillance IRS, Treasury Agent Scams Press-1 Robocalls (random), Commercially available lead lists Medicare Scams Commercial list brokers Targeting Techniques (Cont’d) Driveway Paving Scams Sweetheart Scams Visual surveillance Social media, Dating websites Obituaries Financial/Estate Planning Fraud Commercially available lead lists Money Transfer Schemes “Nigerian 419 Fraud” Foreign Lotteries Spam emails Commercially available lead lists, Press-1 robocalls The Narrative • Must be exciting or alarming • “Rinse and repeat” 6

Kirkman – Elder Fraud Wars 7/17/2020 Typical Narratives Foreign Sweepstakes Enormous prize heading to NC Succession of fees, taxes, expenses Grandparent Scams Child is in BIG Trouble! Growing list of fees, fines, expenses Home Repair Extensive water damage, mold and other problems IRS, Treasury Agent Scams You are in BIG trouble; more violations Medicare Scams “You’re not getting all benefits!” Typical Narratives (Cont’d) Driveway Paving Scams Sweetheart Scams Pave, repave, seal, reseal Fiancé is in BIG Trouble! Only you can help Financial/Estate Planning Fraud “Getting you to financial independence!” “The government will try and tax your children’s inheritance!” Money Transfer Schemes “Nigerian 419 Fraud” Foreign Lotteries Millions heading to your bank acct. Huge prize heading to NC More unexpected fees, expenses. Succession of fees, taxes, expense s Tricks to Sell the Narrative 1. Impersonation of police or banking officials 2. Official-looking documents, congratulatory messages 3. hecks (often counterfeit) 4. Partial payment to victim – cash, check, 5. Detailed facts gleaned from Social Media (Grandparent Scam) 7

Kirkman – Elder Fraud Wars 7/17/2020 “Mrs. Smith, this is David Kirkman from the Attorney General’s Office again. I was wrong before. That is a legitimate sweepstakes company. Feel free to wire the $30,000 to Toronto.” THREATS • Angry Man at the Door: “You haven’t paid me for repairs!!” • Caller: “This is the IRS…We will arrest you if you don’t pay now!” • Overseas jailer claims grandchild being beaten up by jail inmates. “They are my killers. I will send them to your house if you don’t send the money!” 8

Kirkman – Elder Fraud Wars 7/17/2020 Cross-Border Fraud Traditional Payment Methods Your State Attorney General Can Request Interdiction of All MoneyGram and Western Union Wire Transfers by An Older Repeat Victim of Fraud. Recent Trends in Money Transfer Bank-to-Bank Wire Deposits Into Specified Accounts Recipients = “Money Mules” Who Forward $$$ Overseas 9

Kirkman – Elder Fraud Wars 7/17/2020 Hillsborough Paver Jimmy Stevens Cashing Victim’s Check After Violating Court Order Financial Capacity = the ability to independently manage one’s financial affairs consistent with personal self - interest.  Multidimensional, broader scope than medical decision-making capacity. Able to exercise prudent judgment in conducting financial activities. Able to avoid financial abuse. ref: NEUROLOGY 2009;73-928-934// Widera JAMA Feb 16, 2011 30 10

Kirkman – Elder Fraud Wars 7/17/2020 Preclinical AD (asymptomatic) Mild Cognitive Impairment Prodromal AD (symptomatic) Dementia fully expressed AD ( dementia stage illness) Mayo Clinic on Alzheimer’s Disease 2002; pg 32 (*) Mayo Clinic on Alzlheimer’s Disease 2002; pg 32 31 Financial Capacity and AD • Early AD - Financial Capacity already significantly impaired. Mild AD - Impaired in most financial • activities. • Moderate stage AD - Severe impairment in all financial abilities is usually present • Ref: ARCH NEURO.2000;57:877-884. 11