Arizona seniors are more vulnerable in fraud cases

Generational differences and retirement nest eggs make seniors an attractive target for scam artists and frauds. There has been a growing trend in senior fraud and it is becoming a nationwide problem. According to one study, at least 1 in 5 seniors over 65 have lost money to fraud schemes.

by D.S. Woodfill
Feb. 29, 2012
Tucson Citizen

Maryann McKessy prosecutes about 800 cases a year as director of the Maricopa County Attorney’s fraud department, but there’s one type of criminal that especially ticks her off: Those who prey on the elderly.

“I always say there’s a certain place in hell for these defendants,” she said.

McKessy and other crime experts said generational differences and retirement nest eggs make seniors attractive targets for fast-talking scam artists looking to make an easy buck.

Senior fraud trending up

Senior fraud is a growing problem nationwide, according to research. A 2011 MetLife Mature Market Institute review of existing research and news reports estimated elder victims lose at least $2.9 billion annually from fraud, up 12 percent from 2008. Fraud perpetrated by strangers accounted for 51 percent of reported cases, followed by fraud committed by family, friends and neighbors, which accounted for 34 percent. A 2010 study by the non-profit group Investor Protection Trust said about 7 million Americans over 65, or 1 in 5, have lost money from fraud schemes.

The prevalence of senior scams in Surprise or Arizona is less clear. Authorities were unable to produce statistics, but fraud experts say the state’s large retirement populations, such as those in Surprise and the Sun Cities, make it rife with easy opportunities for con artists.

“People think they’re easy marks,” said Arizona Attorney General Tom Horne, the keynote speaker at a Friday luncheon in Surprise about elder fraud. The event was put on by AARP and Rio Salado College.

‘Sweetheart swindles’

Authorities say criminals devise countless methods to dupe a person out of their money, but police and prosecutors say some of the most common scams are the following:

Lottery scams: David Daniels, a detective in the Surprise Police Department’s document crimes division, said lottery scams are typically perpetrated by a swindler who calls someone and tells him he has won the lottery. The criminal then asks for their bank account numbers to deposit the funds and also asks for a fee to issue the lottery check.

Police spokesman Norm Owens said the scheme is easy to evade if people would realize they can’t win the lottery if they haven’t participated.

“If you didn’t purchase that lottery ticket, you’re not going to win the lottery,” he said. “You would have that winning ticket in your possession.”

Grandchild scams: “A particularly heinous crime,” according to Horne, the grandchild scam entails a con artist who calls an elderly person, posing as his or her grandchild. The scammer then says he or she was arrested in another country while on vacation and needs money wired to them to pay legal fees.

“A lot of times they get personal information from Facebook,” Horne said Friday. “A lot of grandparents have information about their grandchildren (there).”

Sweetheart swindles: Typically, a scam artist selects a lonely widow or widower and expresses a romantic interest. After ingratiating himself with the victim, the scammer starts draining the elderly person’s savings.

“It’s all toward getting quote-unquote loans, and these loans are never repaid,” McKessy said. “Significant amounts of money are loaned to these people.”

Caretaker fraud: Schemes entail straw companies that get Medicare numbers from elderly people and make claims for unnecessary medical equipment such as electric wheelchairs and oxygen tanks.

“You’re talking hundreds of thousands of dollars they get away with before Medicare even detects that something is amiss,” McKessy said. “It’s amazing how much Medicare pays out.”

Investment fraud: Scammers befriend an elderly person, who has typically scrimped and saved his or her entire life for retirement. They then convince the victim to hand over a check, oftentimes for thousands of dollars to invest in a non-existent investment scheme.

“Whatever it is they call the investment, it doesn’t exist,” McKessy said.

Power-of-attorney abuse: This tends to be perpetrated by an elderly person’s family member, said Cynthia Fagyas, a spokeswoman for AARP’s Arizona chapter.

“Those people … tend to start using their relative’s money for their own benefit,” she said.

‘Verify, verify, verify’

“Scams can happen through a variety of ways now — through the phone, through the Internet (and) by mail,” Fagyas said. “I think that’s because seniors are so trusting that they might be more susceptible.”

Authorities say seniors are more trusting because they come from a day and age when neighbors helped neighbors and a person’s word was a test of his or her honor.

Seniors have to snap out of that mind-set to protect themselves, said Brandon Johnson, also a detective in the Surprise police’s document crimes division.

“We’re not asking people to be cynical,” Johnson said. “We’re asking people to be skeptical. Verify, verify, verify.”

McKessy said intervention by a family member or friend may be necessary when they suspect an elderly relative is being manipulated emotionally, such as in sweetheart swindle.

“If they see a young person forming a friendship with an older person, that’s really unusual and needs to be questioned. Family members can go a step further and order a credit check on the family member to see if expensive items are being purchased.

“If it comes to investment fraud, ask for references,” she added. “People — it’s amazing they will just hand over a check without asking any questions. Do a little research — contact the (Arizona) Corporation Commission. You need to be a registered broker to sell anything.”

Hard to catch the bad guys

Judith Curtis, a Sun City West senior, keeps a file with the word “scams” written on it. The file contains mail she started receiving that promises big lottery payouts for a “processing fee” that varies between about $10 and $20.

After collecting a small stack of letters, she drove to the Sun City West Sheriff’s Posse station and handed them over.

The posse member told her not to worry about it since she didn’t send the scammers any money.

Curtis was irked, because “somebody’s going to send them some money if they don’t know about it,” she said. “People need to be warned.”

Kathleen Winn, the state attorney general’s community education and outreach director, said investigating minor cases such as credit-card fraud is low on most police departments’ priority list.

“Typically the police departments don’t have the resources to go track that down,” she said.

That mentality is slowly changing, Winn said. The Surprise Police Department goes above and beyond when investigating consumer fraud, often taking reports from people outside the department’s jurisdiction, she said.

“I do give a lot of props to the Surprise Police Department,” she said. “They’re willing to do whatever it takes to be the example.”

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