A piece of unexpected mail recently raised the suspicions of 58-year-old Ellen Schwartz, a Los Altos resident for 44 years.
Last month Schwartz received a letter from a New York City-based financial services company claiming that she won $250,000 in a lottery sweepstakes. The problem? She never entered the sweepstakes.
Making matters more mysterious, the correspondence included what Schwartz called a “legitimate-looking” check for $4,685 to cover fees allegedly related to receiving the money – but with a catch. She was to forward $3,400 via Western Union or MoneyGram to pay the taxes on the winnings.
“It looked very official, but I didn’t trust it,” said Schwartz, a swim instructor.
She took the check to her bank, which identified it as a fake. The bank’s internal fraud unit contacted the local FBI field office to report the incident.
“I got very bad vibes, so I red-flagged it right away,” Schwartz said. “It just didn’t make any sense.”
Janet Berry, deputy district attorney in the elder fraud unit of the Santa Clara County District Attorney’s Office, said Schwartz’s experience is a common example of the increasingly complicated efforts to scam seniors out of their money.
“It’s nothing less than a national disgrace that our elders are treated this way,” Berry said, adding that Los Altos is an appealing target for perpetrators because of its affluence and large senior population.
Berry said scamming has become a national industry, with defrauders trading or selling contact lists to each other. In the past 12 months, the DA’s office prosecuted 44 elder financial abuse cases, a total of 66 charges involving 50 defendants. The office rejected an additional 16 cases due to lack of sufficient evidence.
“They range all the way from misdemeanor charges (less than $950 in theft) to cases where hundreds of thousands of dollars were lost,” she said. “Those cases are usually where investment fraud took place or a situation where someone used power of attorney to swindle someone.”
Among the most common scams, Berry noted, is the “Hi, Grandma” approach, in which seniors receive a phone call or email notifying them that a grandchild is stranded in an overseas jail and needs money to post bail.
Another con reported to Los Altos Police involves perpetrators posing as utility workers and going door-to-door in an attempt to gain access to a home or solicit information – such as Social Security numbers – from residents.
Los Altos Police detective Abe Velasco said scammers target seniors in particular “because they’re more vulnerable and trusting.”
Los Altos Police Chief Tuck Younis added that as technology improves, so does swindling. More and more, he said, scammers can easily and cheaply produce “official-looking” materials like those Schwartz received.
“I do feel that it is getting more sophisticated,” Younis said. “There are people in our community with some wealth and that makes them potentially more of a target.”
And not everyone who goes from target to victim reports the crime to authorities. Berry noted that elder financial crimes – and other elder abuse crimes – are “hugely underreported” overall.
According to a June report by the National Center on Elder Abuse, more than 12 percent of the 5.9 million national elder abuse cases reported in 2010 involved financial exploitation, A June 2011 study by MetLife on elderly abuse noted that victims of financial scams lost a combined total of $2.9 billion in 2010.
Nationally, Berry said, “easily over one-half” of perpetrators committing an elder financial crime are family members. Often, she said, those family members gain power-of-attorney privileges and use a senior’s life savings to fund a lavish lifestyle or substance abuse habit. In other cases, caretakers, neighbors – and even other seniors – are the ones committing the crime. Just 16 percent of elder financial abuse cases are perpetrated by those who have no relationship with the victim, according to Berry.
“The most egregious part of elder fraud isn’t just that the money was taken, it’s the betrayal and lost of trust felt by the victim,” she said.
Resources and tips
Berry cautioned that financial crimes perpetrated on the elderly might soon be on the rise with members of the baby-boomer generation headed for retirement.
“We are looking at a wall of financial abuse coming our way,” she warned.
There are ways to avoid being a victim. Berry said resources are available to those who want to make themselves less vulnerable. Residents may report potential fraud by calling a hotline for seniors and the disabled established by the DA’s office at (855) 323-5337. Seniors can also contact the DA’s Consumer Protection Unit at (408) 792-2880. Berry added that the FBI and the U.S. Department of Justice “have extensive fraud information” available online as well.
The elder fraud unit offers a free training seminar, “How to Fraud-Proof Yourself,” to any county groups that are interested.
“We talk about how the scams work and what their hallmarks are,” she said of the seminars. “There really aren’t a lot of scams, just a lot of variations on the same scam.”
When it comes to family, money and the often-thorny issue of power-of-attorney privileges, Berry said seniors should never be “pushed into a decision.” All family members should be involved in those discussions at the same time to establish a checks-and-balances system. Overall, she added, seniors first need to “feel quite comfortable” in what they believe is the right decision without the potentially selfish influence of others.
Velasco said the best advice he can give seniors worried about getting scammed is an expression most of them have heard before: “If it sounds too good to be true, it probably is.”
For more information, call the Santa Clara County District Attorney’s Office at (408) 299-7400 or visit sccgov.org/sites/da.