The Issues With The Justice Department’s Expansion Of Its Elder Fraud Strike Force

The Justice Department recently announced an expansion of its Transnational Elder Fraud Strike Force to fight against financial abuse. We applaud its efforts. However, no matter what the expansion puts into better transnational law enforcement, the heart of the problem and the worst of elder financial exploitation does not come from international crime rings.

It is essential that foreign-based scammers be called to account. The theory presumably is that better law enforcement will deter criminals who steal millions every year from vulnerable elders. But according to the National Center on Elder Abuse, which has studied the problem extensively, most elder financial abuse comes from family members (54%). Its studies show that care workers are the second most frequent abusers of elders (31%).

According to the Centers for Disease Control and Prevention, “Elder abuse is an intentional act or failure to act that causes or creates a risk of harm to an older adult. An older adult is someone age 60 or older. The abuse often occurs at the hands of a caregiver or a person the elder trusts.”

The Transnational Strike Force expansion will be welcome in adding more offices, more prosecutors and more aggressive pursuit of syndicates who exploit our elders. And it apparently will do nothing to stop the “close to home” problem that has already been extensively researched. Too much financial elder abuse will continue happening under the federal government’s radar.

At AgingParents.com, on a daily basis, we advise families who have a problem with their elders. Financial abuse is a recurring issue we hear about. Real-life examples include a cognitively impaired elder who owns investment property he can no longer manage. The tenants, his property manager or even family member are ripping him off and he doesn’t realize it due to his mental decline.

That is financial abuse that the Transnational Strike Force will never see. The exploiters are not big targets. No one reports it to law enforcement. The family may devise a strategy to stop the abuse, but some of the elder’s money is surely gone before that is enacted.

Another example is an unscrupulous family member who moves in with grandma, who is frail and dependent on the family for care. The family member gets grandma to sign a Durable Power of Attorney, and then proceeds to clean out grandma’s savings and checking accounts. Sometimes the family member, whom grandma trusted, then disappears — leaving grandma without any money. Sometimes the abuser sells grandma’s house out from under her and puts her in a Medicaid-paid, low-quality nursing home when she has no money left. This sort of abuse is all too common in our experience. Not an iota of it will come to the attention of the DOJ’s Transnational Elder Fraud Strike Force. It’s widespread, and rarely prosecuted.

The problem with reporting financial abuse

One issue the Justice Department’s expanded efforts to combat financial abuse does not address is that most cases of abuse are not reported. According to the National Center on Aging, approximately one in 10 Americans ages 60 and older have experienced some form of elder abuse. Some estimates range as high as 5 million elders who are abused each year. One study estimated only 1 in 24 cases of abuse are reported to authorities.

Law enforcement depends on reports of abuse to determine what, if any, action to take. Since most cases are not reported at all, this leaves many unaddressed victims with their abusers getting away with their actions. Sometimes, elders are too ashamed that they were taken advantage of by a family member or trusted others to be able to bring themselves to report the crime.

As another real-life example, a 93-year-old woman connected to me for advice by her other family. She was being exploited by her son. He had taken money from her bank account with the Power of Attorney he had, and he wanted to get her home next. I looked her in the eye and gently explained that what her son did — and was still planning to do — was abuse, and that it is against the law. She said, “I don’t want my son prosecuted.” This is an example of a willing victim, one the Justice Department will never meet.

I’d guess there are many more cases like hers that contribute to the statistic of how much is stolen from elders each year in the U.S. The federal government puts the figure at $2.9 billion. A private entity, True Link, did a comprehensive study of financial elder abuse. It found that the amount stolen from elders each year in the U.S. is $36.48 billion, more than 12 times what the federal government reports. There appears to be no recognition by the feds of credible research done outside the government, even from national, well-established organizations.

The role of Adult Protective Services

The origin of APS funding was the federal government. The concept was to have an investigative body that could explore reports of elder abuse of various kinds, including financial exploitation. APS’ role varies from state to state and the attitude about financial abuse consumers experience from APS is similarly varied. Some entities are mandated to report to APS when they suspect financial abuse. A state-by-state list of mandated reporters is here, from the National Center on Elder Abuse. They include health care professionals, teachers, bank employees, financial institutions and more.

What happens in real life? They wait too long. They hesitate or they simply fail to do what is required. There are no discernible consequences when they don’t report.

In one case I am familiar with, a retired, high-profile, public figure had thousands of dollars disappearing from her bank account – an observation discovered by her partner. She could not see how it was happening. The bank where the account was located knew of this. When the partner confronted the bank and asked why no one had called her (she had Power of Attorney), and why no one at the bank (a mandated reporter of abuse) had reported the exploitation to APS, the answer was: “We didn’t want to embarrass her.” Mandated reporters do not always do their job of reporting, with various excuses.

Inaction by APS

I cannot count the number of times I have heard frustrated statements from families about financial abuse toward their elders, and their experiences of getting brushed off by APS. When a family member, caregiver, “friend” or other trusted person has financially exploited the elder, someone who sees it reports to APS. The report is taken over the phone, followed by the reporting person filling out an online form.

The type of APS response is consistent: “this is a civil matter and we don’t deal with that.” Staff members at the agency could report to law enforcement but they do not. It’s not their policy. It’s not clear, in their minds, that they should. Or, as one former district attorney in a nearby county revealed, they can have a written policy in their office that they do not report “civil matters” of elder financial abuse to law enforcement. In turn, law enforcement does not prosecute elder abuse committed by family members, caregivers, friends and others.

Sometimes in some locations, APS and law enforcement are only interested in abuse matters involving banks, financial advisors, thief rings or other big targets. Their reasoning is not clear. In California, the law on the books certainly makes financial abuse of any kind by anyone a crime. When sufficient proof is there, it can and should be prosecuted. Some counties take these matters on and law enforcement, through the district attorney, does aggressively prosecute them. But those doing what I see as the right thing do not appear to be in the majority.

I have personally reported such a case with extensive proof, witnesses, an expert’s report, and photos illustrating what happened to APS. I am a retired litigator with 27 years of experience proving things. That matter was not prosecuted by my local law enforcement. Family members had to hire a private attorney. Not everyone can afford that costly expense.

When members of law enforcement tell a concerned family member or elder that the abuse they report is “a civil matter,” they are saying to hire your own civil attorney at your own expense and it’s not their problem. We do not see the Transnational Elder Fraud Strike Force striking at that issue. They, too, are after the big targets – international crime syndicates, and conspirators who have committed provable crimes. I am sure they will do the best possible job in those efforts. But, sadly, it leaves grandma, your isolated neighbor living alone, or perhaps your own aging parent vulnerable and still unprotected.

Conclusion

Any efforts by the Justice Department to make a dent in the $36 billion-plus annual problem of criminals stealing from our vulnerable elders should be supported. The federal government can look further at how extensive the issue is, and examine the research national organizations have carefully done to reveal data the government may not have in hand when deciding how to spend our tax dollars.

I would personally like to see more federal money spent on training APS and state law enforcement agencies to prosecute the “close to home” millions of cases of financial elder abuse these studies show are happening. While it’s certainly helpful that the Justice Department is going after transnational criminals, it leaves untouched the daily exploitation by family members, caregivers, and others who are getting away with this kind of crime.