Financial Fraud

Con Artists, Money, and YOU



A few days ago I was reading an article in the November 2015 issue of Consumer Reports titled, "A Crying Shame".  It is a compelling article about the growing issue of elder abuse occurring through financial fraud. People in their sixties and above are being targeted by swindlers, and through fear and manipulation are losing their life savings. This issue has outgrown its focus on the very elderly with decreased mental capacities and has overtaken intelligent, retired, family-oriented people as well. The skill and savvy of these criminals have been honed over the past decade, and when combined with a national network of 1000's of fraud criminals, are making even the financially astute individual disadvantaged. To add insult to injury, more swindlers are getting away with this victimization than are being caught.

This topic is heavy on my heart this year. As a Client Care Specialist for our wealth management firm, I have had first-hand experience working with clients who have been exposed to the trickery and manipulation of con artists. Therefore, when I came across this Consumer Report article, I knew it was time to speak out. The more voice we put to this issue, the more our family members and friends can be protected against fraud. In this article you will read heart-felt stories of families who have suffered this crime, you will learn how swindlers are convincing people to give their savings to strangers, and you will be equipped to help prevent and to report fraudulent attempts. Feel free to pass this article on to friends and family so that, together, we can bring awareness to this, often silent, attack on our older generation while keeping our own family and loved ones safe.

Part I: The Sad Truth of Financial Fraud

It has been estimated that seniors are being financially taken for as much as $3 billion a year by con artists. According to a 2010 survey completed by Investor Protection Trust, 20% of seniors are being financially exploited. In 2014, the Journal of General Internal Medicine found that only 1 in 20 victims are reporting the incident (Consumer Reports, Nov 2015, A Crying Shame, p. 29). To make matters worse, the number of complaints being made regarding attempts for fraud have risen 47% between 2012-2014. (The Federal Trade Commission)

What the above statistics mean is that it can happen to anyone. Competent, capable, independent, intelligent people are falling victim to scammers. Here are a few target areas that these criminals are honing in on as they select their next "sucker."

  1. Lost a spouse in the past year-grieving
  2. Live alone-isolated
  3. Financially secure
  4. Have grandchildren or have no family at all

The True Story of Beth Baker (Consumer Reports, p. 30)

Beth Baker is an independent, 87 year old woman who loves her family and would do anything for them. So when she got the frantic call from a man last December she jumped into action to help her grandson.  Beth stated in an interview with Consumer Reports, "He said my grandson was in Peru and was in trouble there." The scammer weaved a story using information Beth was unwittingly sharing about her grandson to convince her that her grandson was attending a wedding in Peru and had been in a terrible car accident that caused a little seven year old boy to be injured and eventually died from the injury. This voice on the phone proceeded to tell Beth that her grandson was in jail and needed money right away or there would be trouble for her beloved family member.

Love and fear are tactics commonly used by con artists. In an effort to help her grandson, she lost $65,000 to the swindler before realizing it was a con. According to her interview with Consumer Reports, the perpetrator called multiple times a day detailing more of her grandson's plight. She couldn't sleep. She was afraid to tell anyone what was happening because she was told harm would come to her jailed loved one. It wasn't until Beth went into the bank to take out a loan that a bank manager became involved and stopped the process. When Beth realized what had happened, she was filled with embarrassment, shame, and questioned her own sanity and worth.  Con artists take more than money from their victims. They take people's dignity and self-confidence.

Beth is one of thousands of stories of fraud.  Continue to read and learn more about this terrible epidemic. In Part 2 of our story we will take a look at the underbelly of the fraudster's criminal network and how they convince people to give thousands of dollars to a voice on the other end of the telephone.

Part II: Inside the Mind of A Swindler

Swindling tens, and even hundreds of thousands of dollars from the savings of elderly people has grown into “Big Business” in the criminal world. A gigantic network of criminals spans across the globe, working together to gather assets from their unsuspecting and trusting prey. Most of the money is moved outside of America into countries such as Israel and, more prominently, Jamaica by using “mules” who physically carry the money onto airplanes and out of the country.  Many fraudsters also have a shared “playbook” that allows them to adapt to the situation unfolding during an initial call to their intended victim. According to a report on written by Bob Sullivan, there are six primary fraudulent stories being used throughout the network to entice average people to give their hard earned money to a complete stranger.

  1. You won the lottery!  Just send in a small fee/pay taxes upfront to obtain your prize
  2. Simply send in your “donation” or “subscribe” to our service and you are guaranteed to hit a big payday on this investment
  3. The sweet-talker wooing his victim
  4. Psychic/spiritual scams
  5. Invest off-shore to protect your money
  6. Care taker shenanigans 

When you read the above list it is easy to believe that no one would fall for such money schemes. However, the skill and savvy of these criminals have been honed over the past decade, and when combined with a national network of thousands of fraud criminals, these villains are mesmerizing even the most financially astute individuals into giving money.

The True Story of Phil Deeb (November 2015, Consumer Reports, p. 35)
In 2006 Phil Deeb, age 68, responded to a mailing advertisement to purchase insurance. The mailer looked legitimate and Phil felt it was time to secure some insurance for him and his family. Phil called the number on the flyer. He met a man that would become his heart-ache for the next several years. Dennis Cline, an insurance salesman, began to immediately woo Phil.  He even invited The Deeb family over for the holidays. Eventually, Mr. Cline persuaded Phil to purchase an $186,000 lump sum pension and to prepare Phil’s taxes that year. All seemed well and the relationship was strong for the next two years until Phil began receiving letters from the IRS for unpaid taxes. Mr. Cline had not filed the 2006 or 2007 taxes and now Phil owed $20,000 to the government. While this terrible situation was coming to light, Phil began to receive debt collection calls for services in which Phil had no knowledge.  Phil’s daughter and son became involved and began to dig more deeply into their dad’s financial situation to discover that two more annuities were opened in Phil’s name but were now worthless.  Mr. Cline had drained the pension and both annuities until the balances dropped to zero. In 2012 Mr. Cline was arrested and later convicted of a first degree felony. Phil underwent emotional strain, physical illness, and psychological deficiencies as a result of the fraud and lengthy trial.

Fraud causes more than financial loss.  The con artist feeds off the real needs people have and destroys their confidence and dignity while abolishing the family’s net worth. Let’s turn now to look at how the scam artist accomplishes his plan.

Today, there are networks whose purpose is to seek out and make lists of senior’s names.  They gather this information from obituaries, purchase legitimate lists from organizations who serve companies which sell to seniors, and they get names and lists from other scammers. Once they have your name, the scam artist tests the waters with a mass mailing or a broad range of cold calling to see which one of you will be interested in the scam. That’s when fraudsters get to work. They gain contact information over the phone or through a mail-in form in order to gather need intelligence on you. Some swindlers will ask you for a small fee (maybe $20) in order to receive your prize or product or will ask you to pay taxes up front. Fraudsters then narrow down their lists to those who responded and gave money. These so-called “sucker lists” are then sold to their friends (according to Consumer Reports, each name is worth $6 with the lists of older people living alone carrying more value).  Once the lists are bought, scammers hone in and begin contacting their would-be victims.  During each call there will always be a “catch.” They will ask you to send in money and they will stress the need for secrecy in order to receive the prize. If the scam is to help out a family member in another country the need for urgency and secrecy is escalated quickly by the con artist. Once the hoodlum has your money they go in for the “kill” and call several times a day to ask for money or just to talk, all the while gathering additional information that can be used later to con you again and again. It would seem logical that once the money is gone the con artist would disappear, but instead they begin to suggest loans, and advances on credit cards, as well as cashing in life insurance policies. The worst criminals begin to threaten harm to family members if the money doesn’t keep coming.

Whether it is an un-vetted insurance salesman or a kind sounding woman calling to notify you that you’ve won a prize, it only takes one lapse of judgement in order to become a victim of fraud. They don white hats, become your friend, and they seem like such great people. Underneath this nice façade is a crew of people working together to move money from your hands and into their hands. Millions of dollars each year are transferred into stranger’s hands as a result of this criminal circle. Hearts are broken, children’s inheritances are demolished, and victim’s hard-earned savings are brought to zero, all because the swindlers have learned how to outsmart their target.  In Part 3 of our story we will gain the needed resources to thwart these financial attackers while creating a safety net for our loved ones who are at risk of becoming prey to this crime.

Part III: A Safety Net Against Fraud

Let’s take a look at the difficulties in catching scammers and how we can create a protective netting around our friends and family.

Forbes Magazine in their online article “Why Elder Financial Abuse Is Such A Slippery Crime” (dated 2/13/15) quoted Executive Director of the National Adult Protective Services Association, Kathleen Quinn’s calling this crime, “rampant, largely invisible, expensive, and lethal” during the February Senate Special Committee on Aging hearing. It is estimated that only 1 in 20 report the problem with as much as $3 billion being captured by criminals each year. The reasons victims do not report financial fraud is varied. It may be a family member creating harm, the victim may suffer from a mentally debilitating disease and not realize they have been victimized, or the person taken by fraud may be too embarrassed or ashamed to come forward. To make matters worse, our government agencies are not equipped to handle the number of cases reported. Therefore, many reports get filed and never investigated because the amounts are too small to warrant the man power it takes to hunt the criminals down.

There is good news, thankfully. During the 2015 White House Conference on Aging, Elder Abuse was made one of its four tracks which means the issue is gaining significant attention. Not only is this issue receiving discussion and debate, but also actionable steps are being taken to tighten the ability for crooks to take advantage of older individuals. The Department of Justice created an Elder Justice website which gives victims and their family members a place to report the abuse and to locate regional Protective Services to receive help. Police are now provided pocket guides that explain the legal rights and issues around this crime.

Financial crimes cannot be eradicated by singular, isolated reporting.  It is through a concerted, collaborative effort that this often silent offender can be brought to justice.  As family and friends to the elderly, there are steps we can take to protect our loved ones.  Stay close and connected to those who are at risk.  Check in on them and don’t be afraid to ask the tough questions if you feel that fraud may be happening.  Become educated about this issue to see the warning signs and be prepared to act if necessary. Equally important, report each case to authorities and seek support from agencies who specialize in this crime.

Below are additional resources for reporting Financial Scams and gaining the support you need should you find yourself at risk for being scammed. Protect your hard earned wealth by questioning everyone asking for money upfront with the need for secrecy. Vet your financial team (CPA or tax preparer, insurance agent, estate lawyer, financial planner, and investment advisors). Solid, high integrity people who truly want to provide financial services for your benefit are in your community.  By verifying credentials and researching your specialist’s history, you can be more assured that your financial team is working on your behalf. If you believe you have been a victim of fraud, then contact one the agencies below.

~Consumer Financial Protection Bureau’s Office of Financial Protection for Older Americans:

~AARP’s scams and fraud page:

~Financial Fraud Enforcement Task Force:

~Senate Special Committee on Aging, Toll-free hotline: 855-303-9470

For more resources go to


Special Thanks to Consumer Reports for bringing this crime to light in their November 2015 edition.

For more information, please contact me at

*The foregoing content reflects the author's personal opinions which may not coincide with the opinions of the firm, and are subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that these statements, opinions, or forecasts provided herein will prove to be correct. Past performance is not a guarantee of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns. All investing involves risk. Asset allocation and diversification does not ensure a profit or protect against a loss. Finally, please understand that–as with other social media–if you leave a comment, it will be made public.