California’s seniors lost an estimated $10.9B to fraud in 2020

The relationship started on an online dating site. Katsumi Iwasaki was enthralled by a person who claimed to be a US soldier stationed in Damascus, Syria. They quickly fell to emailing “sweet things,” Iwasaki said.

The 81-year-old San Francisco man had been living alone after his partner of 22 years died of lung cancer, and the budding relationship “made me feel like I had a bright future.” After a few months of corresponding in late 2016, the person, who said his name was “James Lopez,” mentioned the gold — $1 million worth. Lopez needed money to ship a cache from Syria to San Francisco for safekeeping, he said.

“I was lonely and looking for a friend, and whatever James said I think I trusted,” said Iwasaki, who began wiring increasingly large chunks of his retirement savings to Lopez, though the pair had never met. The person claiming to be Lopez promised he would split the gold when he visited San Francisco, said Iwasaki, but neither the gold nor Lopez materialized.

Cases of financial fraud against elders like Iwasaki have been slowly growing since 2016, but when pandemic lockdown measures isolated seniors over 65 from family and friends, reported losses to elder fraud jumped by 30% nationwide in 2020, according to a Federal Bureau of Investigation report.

“We are calling this the perfect storm,” said Glen Fishman, who works for the Institute on Aging’s Elder Abuse Prevention Program in San Francisco, which has seen a “huge increase” in scams against the elderly.

One in 10 seniors fall for a range of scams, according to Comparitech, and most never recoup the losses. Instead, they are left with gaping holes in savings meant to support their golden years. The rise in scams comes as one in three Californian seniors already lack the money to meet their basic needs, according to UC Berkeley’s Labor Center.

The scams range from simple to sophisticated. Targeted for their retirement savings, isolation, and age-related cognitive decline, seniors are romanced by scammers and bilked out of their savings, called by imposters posing as Social Security or Medicare employees to obtain private information, and conned by criminals pretending to be an elder’s grandchild in need of quick cash.

For Iwasaki, the relationship began with a few months of emailing, sometimes 18 times a day. Then, over the next year, “James Lopez” convinced him to part with the $400,000 — in at least 30 wire transfers — that Iwasaki had carefully saved over nearly two decades working as a clerk at a San Francisco law firm.

“I was in love and kind of hypnotized,” said Iwasaki, who would walk to his nearby bank, Citibank, to wire the funds.

Citibank did not respond to specific questions about Iwasaki’s case. A spokesperson for the bank said in an email they are investigating the matter, writing, “We have seen a growing number of scams from robocalls to internet and email fraud and we are deeply committed to doing our part to protect the most vulnerable in our society from financial fraud.”

State regulations require bank employees to report suspected financial fraud of clients to Adult Protective Services or law enforcement. Tellers are the first line of defense for isolated seniors because they know their clients’ spending patterns and can spot unusual behavior such as large wire transfers, according to the US Financial Protection Bureau.