Financial Exploitation of Elders

 


Fraud examiners should know the red flags of elder financial abuse and how to identify and protect those who may be vulnerable. 

Ninety-six-year-old "Mrs. Mabel Hunt" wanted to live out her life in her longtime home. One of her neighbors, "Rev. Bob," a minister, knew this and convinced her to allow him to become a "joint tenant," so that the state Department of Social and Health Services, he said, wouldn't be able to force her to sell her home and move her to a nursing facility. But Rev. Bob was lying and Mabel was too trusting. She walked straight into a financial exploitation trap.

Mabel didn't know that a joint tenant is actually a joint owner of her home. Once Rev. Bob was on the title, he obtained a line of credit against her house, liquidated most of the equity, and stole the funds for his own use. At the same time he offered to manage her money, and she allowed him to be a signer on her bank accounts. He promptly began siphoning off her money. She never suspected that Rev. Bob had an insatiable gambling habit and a desire to live a high lifestyle.

Rev. Bob mortgaged Mabel's house, traded in her Cadillac (that she hadn't driven in years), and quit paying utilities and important medical bills on her behalf. The scheme began to unravel when the power company cut off her electricity for non-payment.

Financial exploitation doesn't just happen to the elderly but, obviously, they are more susceptible to promising offers of assistance and companionship. Fraud examiners should know the red flags of elder financial abuse and how to identify and protect those who may be vulnerable.

Assets Available to Exploit
Author Jack Olsen in his 1998 book, "Hastened to the Grave: The Gypsy Murder Investigation," writes that a million complaints of elder financial abuse are filed every year in the United States. Financial exploitation is on the rise because:

  • the population is living longer;
  • the baby-boomer generation is now aging; and
  • retirees own houses that have greatly appreciated.

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