How criminals steal $37B a year from America’s elderly
About 5 million older Americans fall victim annually
Bloomberg News
Marjorie Jones trusted the man who called to tell her she had won a sweepstakes prize, saying she could collect the winnings once she paid the taxes and fees. After she wired the first payment, he and other callers kept adding conditions to convince her to send more money.
As the scheme progressed, Ms. Jones, who was legally blind and lived alone in a two-story house in Moss Bluff, La., depleted her savings, took out a reverse mortgage and cashed in a life insurance policy. She didn’t tell her family, not even the sister who lived next door. Scammers often push victims to keep promised winnings a secret, says an investigator who helped unravel the sinister effort to exploit an 82-year-old woman.
Her family didn’t realize something was wrong until she started asking to borrow money, a first for a woman they admired for her financial independence. But by then it was too late, says Angela Stancik, one of Ms. Jones’s granddaughters. Ms. Jones had lost all of her life savings — hundreds of thousands of dollars.
About one week after calling Ms. Stancik at the family business in Texas to borrow $6,000, Ms. Jones committed suicide.
That was May 4, 2010. When family members went to her home, they found a caller-ID filled with numbers they didn’t recognize and three bags of wire transfer receipts in her closet. Ms. Jones had $69 left in her bank account.
Some 5 million older Americans are financially exploited every year by scammers like the ones who targeted Ms. Jones or by greedy, desperate or drug-addicted relatives or friends. The number of victims is increasing as baby boomers retire and their ability to manage trillions of dollars in personal assets diminishes.
One financial services firm estimates seniors lose up to $36.5 billion annually. But such assessments are “grossly underestimated,” according to a 2016 study by New York State’s Office of Children and Family Services. For every case reported to authorities, as many as 44 are not. The study found losses in New York alone could be as high as $1.5 billion.
In 2016 the U.S. Centers for Disease Control and Prevention drew attention to elder exploitation as a public health problem, citing groundbreaking research two decades earlier by Mark Lachs. Now cochief of the Division of Geriatrics and Palliative Medicine at Weill Cornell Medicine and New York-Presbyterian Hospital, Dr. Lachs says elder abuse victimsincluding those who suffer financial exploitation-die at a rate three times faster than those who haven’t been abused. It’s a “public health crisis,” he warns.
“I knew these crimes were killing people,” says Elizabeth Loewy, who directed the elder abuse unit at the Manhattan District Attorney’s Office. As her exploitation cases steadily rose to hundreds per year, “so many family members told me, ‘I can’t prove it, but this killed him.’ “
Bente Kongsore, a retired accountant in Creswell, Ore., says her parents’ mental and physical decline accelerated after an assistant manager at a local bank, Susan Paiz, befriended the octogenarians and stole $100,000 from them in 2014.
Her mother died in June 2016. Her father died in December 2017, just weeks before Paiz was sentenced to 10 months in jail. Paiz was caught thanks to a dogged detective in Bellevue and the King County prosecutor’s office in Seattle, which had established an elder abuse unit in 2001. When Ms. Kongsore saw Paiz in the courtroom, she says, she thought, “How could you do that to older people who could not protect themselves?”
The bank where Paiz worked, Union Bank in Bellevue, didn’t return the money until Ms. Kongsore emailed an incriminating letter that Paiz wrote to her parents to a bank investigator, and the bank still hasn’t formally apologized, Ms. Kongsore says. Union Bank didn’t immediately respond to requests for comment. Paiz couldn’t be immediately reached.
Financial exploitation is “a huge problem in the sense that it’s so profoundly destructive,” says Page Ulrey, a senior deputy prosecutor who became the Seattle unit’s first member. Most of her cases are financial, involving victims who rarely get their money back. “They’re usually emotionally devastated as a result of having been betrayed.”
In many cases, it may appear the victim gave consent, but it’s often based on manipulation or deception. Like Ms. Kongsore’s father, victims often “have some level of cognitive impairment, which makes it really difficult for them to figure out the truth of what’s going on,” Ulrey says.
As a result, many of her cases hinge on showing incapacity. “
In 2015, Weill Cornell’s Dr. Lachs coined the term “AgeAssociated Financial Vulnerability,” or AAFV, to sound the alarm. He defined it as a “pattern of imprudent financial decision-making that begins at a late age and puts older adults at risk for material losses that could decimate their quality of life.” Financial judgment can falter before normal cognition does, regardless of whether the person was savvy with money when they were younger, Dr. Lachs says. In other words, it can happen even when the person seems normal.