Investigating financial crimes against vulnerable adults

Family members, friends and caregivers often prey on defenseless adults. Here’s a “starter kit” to aid CFEs on how to gather and analyze financial, medical and real estate records; present cases to prosecuting authorities; and conduct successful interviews.

When the family of Reginald Lucraft placed him in the care of Myles Roberts, they couldn’t have imagined they’d have to spend three years after his death fighting for his assets. But after battling banks to understand how fraud was committed against Lucraft, they got their answer. Roberts admitted to defrauding Lucraft between 2004 and 2014.

According to The Telegraph article, ‘We placed our trust in a carer – but he stole more than £100,000’ on April 25 by Amelia Murray, Roberts withdrew large sums from Lucraft’s accounts and sold shares on the pretext that he’d gone into a care home. He also borrowed 82,500 pounds in Lucraft’s name secured against his London home and falsely claimed to be Lucracft’s next of kin, his son or his grandson. In January, Roberts was sentenced to 32 months in prison.

According to The Telegraph article, Charity Action on Elder Abuse estimates approximately 120,000 cases of elderly people are financially abused in England each year, mainly by family members, friends and caregivers.

CFEs — whether licensed law enforcement professionals or investigators for prosecuting authorities — face special challenges when investigating financial crimes against vulnerable adults (VAs).

A victim’s vulnerability is usually caused by physical and/or cognitive impairments that render the VA less able, or totally unable, to live independently. Should a VA fall prey to a financial fraudster, they also might be less able or unable to assist in the investigation of these crimes. In fact, unlike most business-fraud victims, the VA might be less willing to assist in the investigation because they’re ashamed, embarrassed or deny they were victimized. Nevertheless, it’s important to discover evidence on alleged predatory fraudsters who target VAs, and CFEs can substantially help.

A thief can steal everything a VA owns. However, I’ll focus here primarily on the theft of money and property found in bank, investment and/or retirement accounts; life insurance policies; Social Security payments; and real estate titles. A financial predator can also use a VA’s stolen personally identifiable information to open their financial accounts.

My goal here is to provide a “starter kit” for CFEs investigating financial crimes against VAs — but especially for those CFEs who are new to this field of prosecution. The information here is general in nature, given that each jurisdiction has its own laws that govern financial crimes against VAs. I don’t intend to give legal advice or offer legal opinions.

I discuss initial reporting of the crime, initial planning of the fraud examination, interviewing the relevant parties, and obtaining and analyzing documents to build the case for prosecution submission.

The initial report

The first allegations of criminal financial abuse of vulnerable adults often are reported by care facilities servicing the VA, or by concerned relatives, friends, doctors or attorneys of the VA. They typically report these allegations to local adult protection agencies or to law enforcement. Initial reporters often supply documentation that provide you a good starting point, give insight into the VA’s condition and help you identify other potential witnesses.

Once you make and assign a report that alleges financial abuse of a VA, you should:

1. Interview the victim, other family members, associates and the suspect.
2. Identify and obtain records of the victim’s financial accounts and other assets.
3. Determine the victim’s assets and sources of income, and also where the assets are going. If the victim is receiving any public assistance, it can be helpful to locate any applications or forms to identify the victim’s assets and sources of income.
4. If possible, run a credit report. The report can help you identify any new lines of credit the fraudster opened, show recent spikes in credit balances and patterns of late payments or defaults. It can also help identify whether the VA has a mortgage or any home equity loans.
5. Obtain the victim’s medical records, if possible. These can establish the physical and cognitive condition of the vulnerable adult, and the VA’s ability — or lack thereof — to give meaningful consent.
6. Establish if a Power Of Attorney or other formal fiduciary relationship exists between the victim and suspect, or between the victim and another party.
7. Conduct a thorough analysis of the victim’s financial condition based on financial records you obtain.

Interviews

Interviewing the VA and their family can be challenging. The VA might have such profound cognitive problems that remembering or communicating information is difficult or impossible. However, this isn’t necessarily fatal to the case. In fact, it can be important in establishing the depth of the victim’s vulnerability.

When you interview the victim’s family members, remember that they, too, could be exploiting the VA.

Record the interview preferably by video or at least audio. After the interview, the VA’s cognition or health might deteriorate (or they could die), which would render them unable to testify by the time the case goes to court. However, the recorded interview might be admissible, and it can be very powerful for the jury to hear or see the victim.

Your interview should calibrate the victim’s awareness, cognition and any overt manifestations of vulnerability, especially those impacting their orientation to reality and ability to remember.

Let the victim know why you’re interviewing them and gauge whether they’re aware that something might be wrong with their finances. If the victim is aware, ask them about the nature of the financial problems. Pay careful attention to whether the victim is oriented to time, place and their own information (name, birthdate, age), and whether they can meaningfully answer all types of questions (open-ended versus yes-or-no questions). This calibration is critical to assessing whether the victim has the capacity to consent.

Determine if the victim can tell you about their income, assets and other financial information. Where do they bank? How do they receive Social Security and other income payments? Do they have any annuities? Do they have credit cards or other lines of credit? Do they own real property?

Also determine whether the victim is aware of anyone who has POA over them. Quite often, VA financial predators use this instrument literally as a license to steal. Finally, assess the victim’s relationship with the suspect, and gauge their feelings about the suspect.

If possible, bring copies of documents that might be helpful to show the victim. When showing documents to the victim, mark each document with a letter or number, and introduce each document by saying, “I’m going to show you this (describe the document) that I’ve marked (letter/number). Do you recognize this? Have you ever seen it before? Do you know what this says?” By stating the numbers/letters of the documents in the recorded interview, it becomes easier to work them into your subsequent summary report and transcript

When you interview the victim’s family members, remember that they, too, could be exploiting the VA. Even a failed attempt at interviewing the victim’s family can be helpful in building a case for the VA’s vulnerability. It can also open the door to other possible suspects.

Other witnesses might have seen events that the VA is unwilling or unable to disclose. A neighbor or friend could’ve witnessed someone coming to the house to get a check from the VA. A care facility staffer might have seen concerning interactions between the VA and the suspect.

Interviewing or attempting to interview the suspect is crucial. Run the suspect’s criminal and civil legal history prior to the interview to understand the suspect’s background. The criminal history might show charges of honesty-related offenses, and the civil history might show cases that demonstrate a suspect’s financial problems.

Typically, suspect interviews take place in a non-custodial setting, and the suspect might be more willing to talk when they know they can leave at any time. You might even obtain vague admissions that the suspect has been accessing the victim’s assets. For example, the suspect could assert that they purchased certain things to benefit the victim and might offer information on who else had access to the victim’s account. The suspect might also discuss their understanding of the victim’s condition. Finally, they might volunteer their own financial account information.

Video or audio record all interviews with other witnesses. Transcribe all recordings, and prepare written summaries of all statements that put key events into chronological order. This is now a good time to amass the financial records and other documents that will establish your criminal case.

Obtaining financial records of the victim and suspect

Develop detailed financial profiles of the victim and the suspect by legally obtaining as many financial institution records as you can (bank records, credit card records, investment account records, loan servicer records, real estate records, etc.).

Human services workers, family members, attorneys and others will give you copies of financial records. These are a starting point, but you must obtain complete records directly from the financial institution for two reasons: 1) the records others give you are seldom complete and 2) if the criminal case is charged and goes to trial, typically you can only admit authenticated documents obtained directly from business entities.

Depending on your jurisdiction, you can obtain bank and other financial institution records by subpoena or search warrant. Work with the prosecuting authority to identify and craft the appropriate instrument.

Complete financial institution records include:

• Images of account application(s), including a signed application form.
• Images of authorized signature card(s).
• Images of any documents affecting the ownership of the account.
• Names of all who have access to the account(s).
• Copies of all photo identifications, a Social Security card or other forms of identification of authorized user(s).
• Images of fronts and backs of checks written from the account.
• Images of deposit and withdrawal slips.
• Images of fronts and backs of checks deposited to the account.
• Any documentation related to wire/electronic transfers to or from the account.
• Documentation regarding any cash advances from the account.
• Distribution requests, copies of fronts and backs of distribution checks and mailing addresses for the distribution checks.
• Images of monthly statements.
• Any correspondence for the account(s).
• Any audio recordings, or other documentation, of telephone communications with anyone discussing the account.
• Information on whether the VA has a safety deposit box.
• Any POA instruments affecting ownership and/or authorization to conduct transactions on any of the said accounts and any instrument canceling or otherwise amending the POA.

You can tailor this list to a specific type of account and append it to a subpoena or a search warrant as an exhibit. Although the list is lengthy, it’s important to get all records related to any accounts, given the many ways in which a financial account can be accessed. Request records covering a date range six months to a year prior to the onset of the suspected financial abuse up to the present day.

Make working copies of these records and property-inventory the originals. If the financial institution’s production is on paper, don’t write on the originals. If the case is charged, these financial records will probably have to be disclosed to the defense, and it’s vastly preferable to disclose copies that are in the same condition as the financial institution that produced them.

If the case goes to trial, the prosecutor needs clean original copies of these records to offer in court. If the production is on disc, in PDF or other imaged format, simply print all contents and, again, property-inventory the disc. You can then use the working copy for your subsequent financial analysis, and you can highlight and underline to your heart’s content.

Obtaining credit reports and medical records

Pull the victim’s credit report from the Annual Credit Report website with the victim’s help. The free report can show whether the victim’s Social Security number has been used to open new lines of credit or if existing lines of credits suddenly have outstanding balances. As with financial records, make a working copy of the credit report and property-inventory the original report.

Work with the victim, their guardian and the prosecutor to obtain medical records. You’ll need to determine whether you can obtain these by direct request, subpoena or search warrant. Contact the victim’s known medical providers in advance and get their request forms plus information on where to send the request or demand. Require that the providers certify all copies of all medical records. Make working copies of the certified records and property-inventory the originals.

If medical records are to be used at trial the medical institution from which they came must present and vouch for them in court. That institution typically offers the certified records it originally received. (Note: in many jurisdictions, certified copies of documents that are stapled together must never be unstapled, or the certification will be nullified.)

The medical records can be a trove of information documenting the victim’s physical and cognitive condition plus the suspect’s interaction with the victim in the clinical environment. Of course, the medicalese can read like Klingon to a lay person, so you might need assistance from others in getting a plain-English understanding of their contents.

Real estate records

If the VA owns real estate, run a property records search at the county recorder’s office to verify the status of title to the victim’s property. VA fraudsters can and do fraudulently convey victims’ property into their own names, sell VAs’ property out from under them and pocket the proceeds, or obtain credit using the property as collateral — all unbeknownst to the victims.

Analyzing financial records

You can construct a simple Excel spreadsheet that details transactional dates; originating and recipient institutions, account numbers and account owners; plus transaction types and amounts. A clear picture of the pattern of theft will emerge especially when you sort the data by date.

The type, or method, of a transfer can be revealing. Was it by paper check? Electronic transfer to another account at another bank? Electronic or online transfer to another account at the same bank? Telephone transfer? ATM? In person at the teller window with a deposit or withdrawal slip? Sudden changes in the victims’ banking methods often signal the suspect glommed on to it.

Here are a few things to look for in the victim’s financial records:

1. Excessive cash withdrawals via withdrawal slips. (Yes, this tactic is still very much alive.)
2. Excessive ATM withdrawals, especially out of the victim’s geographic area.
3. Excessive debit card transactions, especially if the VA is historically a cash or check person.
4. Excessive online transfers, especially if the VA is clearly not computer-literate or, again, historically a cash or check person.
5. Excessive number and/or dollar amounts of checks payable either to the suspect or to cash. 
6. Any other transactions not consistent with the VA’s lifestyle.
7. Any unusual or unexplained deposits to the VA’s account. (The suspect might be drawing down investment funds, opening lines of credit, selling the VA’s assets including their house, etc.)
8. Any additions of credit lines or overdraft protection on checking accounts.
9. The absence of previously consistent payments for the VA’s living expenses (rent/mortgage, medical and pharmacy, utilities, care facility payments, etc.).

Here are a few things to look for in the suspect’s financial records:

1. Collateral deposits that match withdrawals or checks written from the victim’s account.
2. Lack of withdrawal activity that one would expect from an adult (no rent or mortgage payments, no ATM withdrawals, no payments for typical bills).
3. Conversely, habitual spending beyond the suspect’s discernible income. (You’ll find many suspects with gambling and drug problems.)
4. Payments to the suspect’s bills that can’t be traced to their bank account records.

These lists are only starting points. Your fraud examination will demonstrate other leads to pursue. Note that often bank or credit card records will show where (geographic area, business name) an ATM, debit card or credit card transaction took place. Input this information into a separate column in the spreadsheet.

Case submission to prosecuting authority

After you’ve digested the interviews and analyzed the financial records, you’re normally ready to submit your case to your prosecuting authority. Your initial submission might only be the dawn of the case and will suggest avenues for further investigation before a charging decision can be made.

As with other types of financial crimes, the more you’ll look, the more you’ll find and the more you’ll discover how creatively fraudsters rip off the most vulnerable among us.

Annette Simmons-Brown, CFE, most recently was a senior paralegal at the Hennepin County Attorney’s Office in Minneapolis, Minnesota. She’s now a governmental paralegal specialist in Tallahassee, Florida, working in administrative law and statutory rulemaking for regulated professions and occupations. Her email address is: simmonsbrown22@msn.com.