Creating a Financial Abuse Specialist Team

The Financial Abuse Specialist Team is a collaboration of concerned community members – teaming with the district attorney, law enforcement, and social agencies – to address the growing problem of financial abuse of elders.

Predators lurk the streets searching for the most vulnerable people in our communities. These criminals aren’t looking for victims in alleyways; they worm their ways into the lives of the elderly and sick to get what they want. However, new programs for elder crime fighting are cropping up to help combat elder fraud.

As the deputy chief of investigations for the Office of the District Attorney Nola Foulston in the 18th Judicial District of Kansas, my duties include collaborating with law enforcement and other agencies that investigate fiduciary abuse of elders and other white-collar crimes. Our office created the Financial Abuse Specialist Team (FAST) – a specialized fraud unit for a comprehensive law enforcement and community approach.

The FAST is a collaboration among concerned community members and the district attorney, law enforcement, and social agencies to address the growing problem of financial abuse of elders.

FORGETFUL COUPLE

Here’s an example of the work accomplished by this team. The case involved an elderly couple, “Mr. Brush,” 86, and “Ms. Jones,” 89. The couple moved in together after Mr. Brush’s wife passed away. They began relying on each other for emotional and financial support. Unfortunately, dementia was creeping up on both of them. And so were several local con artists who saw an opportunity to take advantage of the situation and, in the process, destroy the elders’ retirement savings.

The suspects, John M. Smith and James D. Blanton, unemployed crack cocaine users, separately befriended the elderly couple and started taking advantage of their kindness. Mr. Brush and Ms. Jones’ memories were slipping so Smith and Blanton were able to visit them almost daily and ask for money and promise they would repay.

During the spring of 2008, Mr. Brush had put a for sale sign in the window of one of his cars, which prompted yet another thug to stop by and ask for a test drive. After getting the keys from Mr. Brush, the thief drove off in the car and never returned. Mr. Brush called 911 and reported the theft to police. The case was assigned to Roger Runft, a detective with the Wichita Police automobile theft section.

During the auto theft investigation, Runft learned that Smith and Blanton had been “borrowing” money from Mr. Brush and Ms. Jones for several years under false pretenses and hadn’t paid them back. Ms. Jones had documented the transactions on tiny slips of paper and kept them in a cardboard box.

Runft notified the FAST. A member of the team, Kansas Social and Rehabilitative Services (SRS)/Adult Protective Services (APS), was able to make arrangements for a guardianship and conservatorship for the couple and secure them from any future loss of assets. The FAST members immediately began the investigation. 

DEVELOPING THE FAST PROGRAM

Kansas, like other states, has a growing elder population. The U.S. Census Bureau projects that more than 62 million Americans will be 65 or older in 2025 – up 78 percent from 2001, according to the Sept. 21, 2004 USA Today article, “Special Report: Havens for Elderly May Expose Them to Deadly Risks,” by Kevin McCoy and Barbara Hansen. The number of Americans 85 or older is expected to top 7.4 million in 2025 – an increase of nearly 68 percent from 2001.

A minimum of one in nine Americans older than age 60 have experienced some form of elder abuse. Some estimates range as high as 5 million elders being abused each year, according to “Facts About Elder Abuse in the United States,” published by the group, Elder Justice Now.

Even though some elder financial abuse cases were being prosecuted in Wichita, it was clear in 2008 that the population was underserved and the results of investigations lacked the necessary follow-up to assure prosecution of offenders. SRS/APS, law enforcement, and community resources weren’t communicating.

My goal was to present a program proposal that would enhance communications among partners and lead to more successful prosecutions and effective resolution of cases. I pitched the idea of starting the FAST program to D.A. Foulston, and she immediately approved it.

In my research, I found a number of other communities around the nation had created specialized financial investigative teams, but some had failed or were limited in their initiatives possibly because they hadn’t sought the cooperation of diverse participants. So in collaboration with Assistant District Attorney Tania Groover, we created a list of recommendations for the composition of our team. Here are a few:

1. Recruit team members from known areas of specialty such as CFEs, CPAs, bankers, attorneys, and mental health experts.

2. Ensure that those added to the team to augment law enforcement efforts have special expertise in financial, legal, and health matters and a clear purpose.

3. Create a three-tiered approach: consultation, assistance, and public education.

I immediately recruited four CFEs: two had worked in law enforcement and two were also CPAs. Their expertise would be essential to the success of the program.

To ensure a productive unit, our goal was to involve law enforcement agencies responsible for investigating the cases, which included local police, sheriff offices, the Kansas Bureau of Investigations, the FBI, and others. Ultimately, all agencies were eager to participate because they knew this was an opportunity to build new resources.

We critically needed the support and assistance of SRS/APS because its social workers are on the front lines of investigations and can notify law enforcement when they uncover allegations of fraud or abuse.

In the past, social service workers weren’t always able to recognize crimes and often made basic criminal investigation mistakes such as interviewing victims with suspects present, interviewing multiple witnesses together, and not understanding bank statements. But case investigations improved greatly when the social service workers were teamed side by side with CFEs, detectives, and prosecutors.

The FAST soon gained the support of local bankers, elder service organizations, psychologists, nurses, and civil attorneys with expertise in elder issues such as durable powers of attorney and conservatorships. Our team became so popular that we had to limit the volunteer participants to maintain communication and efficiency.

The entire FAST team meets every other month. The law enforcement group, which includes the prosecutors, CFEs, SRS/APS, psychologists, and attorneys, meets every month to discuss specific cases.

“That’s the benefit of our FAST team in having all of our experts coming together,” said Groover in the article “Group Fights Elder Abuse,” by Ron Sylvester in the Oct. 17, 2009 issue of The Wichita Eagle. “We’re all in the same room putting our heads together and making these cases stronger for prosecution.”

INVESTIGATING AND PROSECUTING BLANTON AND SMITH 

Now let’s get back to the opening case. Detective Runft presented his findings to the group, and FAST members immediately offered to help. 

Members of the group organized Ms. Jones’ several thousand cash transactions and analyzed the bank records. The receipts recorded cash given to defendants Smith and Blanton, dates, and the reasons the defendants gave for needing the money.

We photocopied, “Bates-stamped,” inventoried, and examined each transaction record. (Bates stamping places identifying numbers and/or date/time marks on images and documents as they are scanned or processed.) We listed all the transactions on a Microsoft Excel spreadsheet, which revealed the disturbing patterns of abuse.

It was obvious that Blanton and Smith had visited the elderly couple many times every day and received funds in similar amounts for the same things. For example, on one day, Blanton received money seven times to get his car out of impound. Ms. Jones gave him amounts ranging from $20 to $70.

We determined the total loss to be about $250,000, which was much more than the elderly couple’s obvious income, which included only a small railroad pension and Social Security retirement.

I contacted Chris Cavanaugh, CFE, CPA, director of internal audit at Wichita State University, and one my first FAST recruits. During his examination of the elderly couple’s records, Cavanaugh found more than $500,000 had traveled through their accounts, mostly in the form of cash withdrawals. Not surprisingly, the bank records showed withdrawals in similar amounts on days the receipts depicted the transactions. Mr. Brush obtained the extra money from cashing in several investment accounts he had built over many decades.

The next step was to overcome a possible defense that the criminals already had paid back the money. Cavanaugh requested additional records that showed only two possible deposits that could be construed as repayment. One was a check signed over by Smith in the amount of $20, and the other was a check in the amount of $1.77. I contacted Detective Brad Bryant with the Wichita Police Department who ordered both suspects to be arrested. Groover handled the prosecution.

Smith and Blanton admitted to Bryant that they took money from the couple. Smith claimed he was going to repay with a settlement he was expecting from an estate, but he had lied. Blanton claimed he would be receiving a settlement from the State of Kansas Victims Compensation Board, which was also untrue. Both suspects confessed they had used the cash mostly for buying drugs.

Because of the close cooperation of the FAST members and other agencies, Smith and Blanton were both charged with mistreatment of a dependent adult – a felony in the State of Kansas. Smith pleaded guilty to taking $199,958.55. Blanton pleaded guilty to taking $28,161.65. Both were convicted. Smith received a 30-month prison sentence and was ordered to pay back $218,750.47.  Blanton received a 34-month prison sentence and was ordered to pay back $35,639.65.

During James Blanton’s sentencing hearing, 18th Judicial District Court Judge Warren Wilbert described Blanton’s acts as “disgusting” and called Blanton a predator. In The Wichita Eagle article, Bryant said that without the FAST, the case might never have been charged. “Had one detective had to sit down and go through all this, he might still be working on it today,” Bryant said.

COOPERATION OF MANY 

The FAST has gone on to help in the prosecution and conviction of many culprits who preyed on defenseless elders. The team has been able to squash fraudsters because it has many diverse participants with complimentary diverse skill sets. With the growing elderly demographic, we know we’ll be busy for years.

Dana Gouge, CFE, is deputy chief of investigations for the Office of the District Attorney Nola Foulston in the 18th Judicial District of Kansas.

[See "Vulnerable Situations and Red Flags for Elder Fraud" at the end of this article.] 

Vulnerable Situations and Red Flags for Elder Fraud

What makes someone a target for financial exploitation? Here are some situations that may make someone vulnerable:

• Lives alone
• Diminished eyesight
• Memory loss/dementia
• Restricted mobility
• Must rely on friends, relatives, or private help
• Needs assistance with medications
• Can’t drive or carry groceries from the car

Once you’ve identified a vulnerable target, look for the red flags that might indicate that the elder has been exploited:

• The address has changed one or more times after a long period of stability.
• The telephone number changes or becomes unlisted.
• The bank accounts change in any way.
• Bills are delinquent.
• Financial information isn’t readily available.
• Alertness is diminishing from visit to visit, indicating medications probably have been changed.
• Visitation patterns to church or old friends are changing.
• Caregivers or those giving medications are now handling finances.
• Caregivers, neighbors, or relatives are becoming overly attentive. 
• The vulnerable person has just one (possibly dominating) caregiver/
  companion
• The caregiver/companion is overly accommodating.

Methods to Query About Financial Affairs 

A financial exploiter works to isolate the vulnerable elder to make the elder totally dependent on the exploiter. When family, friends, social workers, or fraud examiners suspect someone is exploiting an individual, queries must be both tactful and persistent. However, superficial examinations often show nothing because the vulnerable person has been intimidated, “befriended,” and often threatened by the perpetrator. Here are actions you should take:

• Interview the vulnerable elder apart from caregivers or companions to obtain any valuable information.
• Visit the elder numerous times to gain the elder’s trust and give him or her emotional support.
• Respect the elder’s privacy, but engage in more than superficial chitchat and polite answers to go beyond the typical conversation content of older people.
• Find out if the elder is receiving banking or bill-paying assistance and who helps, how often and how long the system has been in place, and if the elder reviews what the helper does.
• Discover where the elder’s mail is delivered, if someone else collects his or her mail, and if the mailing address has changed recently. (Ask for copies of old tax returns or bank statements to check for changes in address or banks.)
• Determine if the elder ever signs blank checks, if anyone else has signing authority on any bank accounts, and if original checks accompany the bank statements. (Fan the checks to see if signatures are consistent with the persons authorized to sign.)
• Find out where the elder keeps financial information, who has access to this information if he or she is being cared for, and if caregivers have access to this information when the elder is napping or away.
• Find out if the elder’s activity, church friends, and patterns of attendance have changed, or if the elder’s personality has changed, and, if so, when it changed.
• Discern where the elder met his or her “trusted friend,” how long he or she has known the person, and if the acquaintance was through a “chance” meeting.

(Source: “Financial Exploitation of Elders” by Linda L. Saunders, CFE, CPA, in the July/August 2001 issue of Fraud Magazine.)