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FinCEN Elder Financial Exploitation (EFE) Advisory: EFE Trends and Typologies

Trends and Typologies of EFE and Associated Payments

EFE schemes generally involve either theft or scams. Perpetrators of elder theft are often known and trusted persons of older adults, while scams, which can disproportionally affect older adults, frequently involve fraudsters, often located outside of the United States, with no known relationship to their victims. Regardless of the relationship, these criminals can place older adults in financially, emotionally, and physically compromising situations, and the resulting loss of income and life-long earnings can be devastating to the financial security, dignity, and quality of life of the victims.

Elder Theft
Schemes involving the theft of an older adult’s assets, funds, or income by a trusted person.

Elder Scams
Scams involving the transfer of money to a stranger or imposter for a promised benefit or good that the older adult did not receive.

Unfortunately, perpetrators of EFE schemes often do not stop after first exploiting their victims. In both elder theft and scams, older adults are often re-victimized and subject to potentially further financial loss, isolation, and emotional or physical abuse long after the initial exploitation due to the significant illicit gains at stake. Scammers may also sell victims’ personally identifiable information (PII) on the black market to other criminals who continue to target the victims using new and emerging scam typologies.

Elder Theft

Perpetrators of elder theft are often family members and non-family caregivers who abuse their relationship and position of trust. As identified by FinCEN in 2019 in its analysis of a statistically significant, random sampling of SAR narratives, a family member was involved in the theft of assets from older adults in 46 percent of elder theft cases reported between 2013 and 2019. Trusted persons who commit elder theft can also include familiar associates and acquaintances such as neighbors, friends, financial services providers, other business associates, or those in routine close proximity to the victims.
Instances of elder theft often follow a similar methodology in which trusted persons may use deception, intimidation, and coercion against older adults in order to access, control, and misuse their finances. Criminals frequently exploit victims’ reliance on support and services and will take advantage of any cognitive and physical disabilities, or environmental factors such as social isolation, to establish control over the victims’ accounts, assets, or identity. This can take many forms, including the exploitation of legal guardianships and power of attorney arrangements, or the use of fraudulent investments such as Ponzi schemes to defraud older adults of their income and retirement savings. These relationships enable trusted persons to repeatedly abuse the victims by liquidating savings and retirement accounts, stealing Social Security benefit checks and other income, transferring property and other assets, or maxing out credit cards in the name of the victims until most of their assets are stolen.

Case Study on Elder Theft

Housekeeper and Co-Conspirators Exploit Dementia-afflicted Older Adult

A woman in Charlotte, North Carolina was convicted and sentenced to 97 months in prison and two years of supervised release for conspiracy to commit wire fraud and money laundering conspiracy. Donna Graves, who was the ringleader of the criminal conspiracy, conspired to engage in a scheme to defraud a victim identified in court documents as “K.T.” The victim
was an elderly widow who lived alone and suffered from dementia and other physical and mental challenges. During the relevant time period, Graves and her co-conspirators (Gerald Maxwell Harrison and Elizabeth Robin Williams) exploited K.T.’s vulnerabilities and defrauded the victim through a web of forged documents, lies, and deceptions. According to evidence presented at Graves’ trial, beginning in 2014, Graves and Williams provided housekeeping services for the victim through a business owned and operated by Graves. Over the course
of the scheme, the co-conspirators isolated the victim from her friends and family, induced the victim to give them power and control over her personal affairs, and fabricated a power of attorney purporting to give Graves and Williams control over the victim’s financial affairs. Once they gained access and control, Graves, Williams, and Harrison moved the victim out of her residence in Indian Land, South Carolina, first to an apartment in Charlotte, and later to a rental home in Mint Hill, refusing to let the victim’s friends and family know where she was living. Over the course of the scheme, Graves and her co-conspirators failed to provide the victim with proper medical care, which greatly diminished the victim’s health. Furthermore, once the victim’s money was depleted, the co-conspirators abandoned the victim, who was later moved to a nursing home in New York, where she passed away in large part due to the mental and physical deterioration she had suffered in the hands of Graves and her co-conspirators.

Elder Scams

In elder scams, criminals defraud victims into sending payments and disclosing PII under false pretenses or for a promised benefit or good the victims will never receive. These scammers are often located outside of the United States and have no known previous relationship to the victims. Elder scams often follow a similar methodology in which scammers contact older adults under a fictitious persona via phone call, robocall, text message, email, mail, in-person communication, online dating apps and websites, or social media platforms. In order to appear legitimate and establish trust with older adults, scammers commonly impersonate government officials, law enforcement agencies, technical and customer support representatives, social media connections, or family, friends, and other trusted persons. Perpetrators often create high-pressure situations by appealing to their victims’ emotions and taking advantage of their trust or by instilling fear to solicit payments and PII. Scammers often request victims to make payments through wire transfers at money services businesses (MSBs), but are increasingly requesting payments via prepaid access cards, gift cards, money orders, tracked delivery of cash and high-valued personal items through the U.S. Postal Service, ATM deposits, cash pick-up at the victims’ houses, and convertible virtual currency (CVC). Further, elder scams are sometimes facilitated through money mules who transfer or move illicit funds at the direction of the scammers. A victim of an elder scam can also serve as a money mule: the scammer convinces the victim to set up a bank account or limited liability corporation (LLC) in the victim’s own name to receive, withdraw, deposit, or transfer multiple third-party payments from other victimized older adults to accounts controlled by the scammer under the illusion of a “business opportunity.” In some circumstances, victims of EFE acting as money mules may be prosecuted for this illegal activity and are liable for repaying the victims. They may also be subject to damaged credit and further victimized through their stolen PII.

Common Elder Scam Typologies

• Government imposter scams: Scammers frequently target older adults by impersonating officials from U.S. government agencies that are often well-known or provide services to older adults, such as the Social Security Administration (SSA), the Department of Health and Human Services/Centers for Medicare and Medicaid Services (HHS/CMS), and the Internal Revenue Service (IRS), among others. The scammers may threaten the individuals with arrest or seizure of their bank accounts for crimes they supposedly committed, such as tax evasion. Scammers may also claim that victims’ Social Security numbers are suspended due to suspicious activity and demand PII and payment to resolve the supposed matter with the government.

• Romance scams: These scams (also referred to as “online dating,” “confidence,” or “sweetheart” scams) grew to a record level in 2021 with $547 million in reported losses. Romance scams involve fraudsters creating a fictitious profile on an online dating app or website to establish a close or romantic relationship with older adults to exploit their confidence and trust. Online scammers may offer to meet in person (though they almost never do) and ask victims to send money for travel expenses, a sudden “hardship” they experience such as medical costs or legal fees, or a supposed investment or business deal. The scammers often solicit payments over an extended period of time and victims may also send PII as the perpetrators gain the trust of the victims. In some cases, romance scam victims are convinced to open bank accounts and LLCs to receive and send funds as money mules so the scammers can launder their ill-gotten gains from third-party scams.

• Emergency/person-in-need scams: These schemes (also known as “grandparent scams”) involve scammers contacting older adults and impersonating a grandchild, another relative, an attorney, emergency medical personnel, or a law enforcement official to deceive victims into believing that a loved one is in an emergency situation (e.g., a car accident, medical emergency, under arrest, or stranded in a foreign country) and needs money sent immediately to resolve the situation.

• Lottery and sweepstakes scams: These scams are a type of advance-fee scheme in which scammers, typically located in jurisdictions outside of the United States, impersonate lottery or sweepstakes representatives, and lawyers claiming that the victims have won a lottery, prize, or sweepstakes. Scammers may target older adults regardless of whether the victims have previously played the lottery or entered in a sweepstakes. The scammers instruct the victims to pay for supposed shipping, taxes, or other fees in order to claim their prize or lottery winnings. Victims never receive their prize or lottery winnings and are often re-victimized with additional requests for payments throughout the scheme until they run out of money.

• Tech and customer support scams: These scammers impersonate well-known companies as tech and customer support representatives to falsely claim that a virus or other malware has compromised the victims’ computers. Scammers may request remote access to diagnose the alleged problem and will typically attempt to solicit payment for fraudulent software products and tech support services. They also often exploit the remote access to install malware and steal PII and credit card numbers to further defraud the victims. After victims make payments, perpetrators often call back and offer refunds to the victims, claiming their tech and customer support services are no longer available. Perpetrators then will claim to send refund money to the victims’ bank accounts but falsely claim that too much money was refunded. The scammers then induce victims to send payments purportedly to reimburse the tech and customer support company for its “over-refund.” Victims can lose hundreds or thousands of dollars to such refund schemes. A recent evolution of the refund scheme involves perpetrators claiming to be online retailers and purporting to offer a refund for unauthorized transactions on the victims’ accounts.

Case Study of Elder Scams

India-based Government Imposter Scam

An Indian national was sentenced to 22 years in prison for conspiracy and identity theft in connection with his operation of an overseas robocall scam that defrauded thousands of victims out of more than $10 million. The victims, many of whom are elderly, continue to endure significant financial hardship from the defendant’s vast fraud enterprise. According to court documents, Shehzadkhan Pathan, 40, operated a call center in Ahmedabad, India, from which automated robocalls were made to victims in the United States. After establishing contact with victims through these automated calls, Pathan and other “closers” at his call center would coerce, cajole, and trick victims into sending bulk cash through physical shipments and electronic money transfers. Pathan and his conspirators used a variety of schemes to convince victims to send money, including impersonating law enforcement officers from the Federal Bureau of Investigation and Drug Enforcement Administration and representatives of other government agencies, such as the Social Security Administration, to threaten victims with severe legal and financial consequences. Conspirators also convinced victims to send money as initial installments for falsely promised loans. Pathan is the fourth of six defendants in this case to be sentenced for their role in the conspiracy.

Categories: Advisories Anti-Money Laundering Elder Abuse Elder Financial Exploitation (EFE) Emergency/person-in-need scams FinCEN Updates Guidance Impersonation Lottery and sweepstakes scams Romance Scams Tech and customer support scams

eric9to5

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