[Senate Hearing 116-530]
[From the U.S. Government Publishing Office]
S. Hrg. 116-530
FIGHTING ELDER FRAUD:
PROGRESS MADE, WORK TO BE DONE
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HEARING
BEFORE THE
SPECIAL COMMITTEE ON AGING
UNITED STATES SENATE
ONE HUNDRED SIXTEENTH CONGRESS
FIRST SESSION
__________
WASHINGTON, DC
__________
JANUARY 16, 2019
__________
Serial No. 116-1
Printed for the use of the Special Committee on Aging
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
46-920 PDF WASHINGTON : 2022
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SPECIAL COMMITTEE ON AGING
SUSAN M. COLLINS, Maine, Chairman
TIM SCOTT, South Carolina ROBERT P. CASEY, JR., Pennsylvania
RICHARD BURR, North Carolina KIRSTEN E. GILLIBRAND, New York
MARTHA McSALLY, Arizona RICHARD BLUMENTHAL, Connecticut
MARCO RUBIO, Florida ELIZABETH WARREN, Massachusetts
JOSH HAWLEY, Missouri DOUG JONES, Alabama
MIKE BRAUN, Indiana KYRSTEN SINEMA, Arizona
RICK SCOTT, Florida JACKY ROSEN, Nevada
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Sarah Khasawinah, Majority Acting Staff Director
Kathryn Mevis, Minority Staff Director
C O N T E N T S
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Page
Opening Statement of Senator Susan M. Collins, Chairman.......... 1
Opening Statement of Senator Robert P. Casey, Jr., Ranking Member 3
SPECIAL GUEST SPEAKER
Statement of Senator Jerry Moran, Chairman of the Committee on
Commerce, Science, and Technology, Subcommittee on
Manufacturing, Trade, and Consumer Protection.................. 5
PANEL OF WITNESSES
Erika Flavin, Daughter of Couple Scammed by Grandparents Scam,
Willow Grove, Pennsylvania..................................... 6
Candice Simeoni, President and Founder of the York County Elder
Abuse Task Force, and Law Enforcement Officer at Kennebunk
Police Department, Kennebunk, Maine............................ 7
The Honorable Derek Schmidt, Attorney General, State of Kansas,
Topeka, Kansas................................................. 10
Judith Kozlowski, JD, Elder Justice Consultant and Subject Matter
Expert, Washington, D.C........................................ 12
APPENDIX
Prepared Witness Statements
Erika Flavin, Daughter of Couple Scammed by Grandparents Scam,
Willow Grove, Pennsylvania..................................... 39
Candice Simeoni, President and Founder of the York County Elder
Abuse Task Force, and Law Enforcement Officer at the Kennebunk
Police Department, Kennebunk, Maine............................ 41
The Honorable Derek Schmidt, Attorney General, State of Kansas,
Topeka, Kansas................................................. 45
Judith Kozlowski, JD, Elder Justice Consultant and Subject Matter
Expert, Washington, D.C........................................ 49
Questions for the Record
Candice Simeoni, President and Founder of the York County Elder
Abuse Task Force, and Law Enforcement Officer at the Kennebunk
Police Department, Kennebunk, Maine............................ 55
The Honorable Derek Schmidt, Attorney General, State of Kansas,
Topeka, Kansas................................................. 59
Judith Kozlowski, JD, Elder Justice Consultant and Subject Matter
Expert, Washington, D.C........................................ 61
Statements for the Record
Testimony of Thomas M. Flavin, Jr. and wife Elfriede Flavin,
Effects of a Grandparents Scam................................. 65
The Honorable Derek Schmidt, Attorney General, State of Kansas,
Topeka, Kansas, Appendix A-C................................... 67
FIGHTING ELDER FRAUD:
PROGRESS MADE, WORK TO BE DONE
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WEDNESDAY, JANUARY 16, 2019
U.S. Senate,
Special Committee on Aging,
Washington, DC.
The Committee met, pursuant to notice, at 9:34 a.m., in
Room 562, Dirksen Senate Office Building, Hon. Susan M. Collins
(Chairman of the Committee) presiding.
Present: Senators Collins, McSally, Rubio, Hawley, Braun,
Rick Scott, Casey, Blumenthal, Jones, Sinema, and Rosen.
Also present: Senator Moran.
OPENING STATEMENT OF SENATOR
SUSAN M. COLLINS, CHAIRMAN
The Chairman. The Committee will come to order.
Good morning. It is my pleasure to welcome back both new
and returning members to the Committee. I am delighted that my
friend and colleague Senator Casey will once again be serving
as the Committee's Ranking Member, and I am thrilled that we
have many new members joining the Committee this year, and we
welcome them also.
This Congress, this Committee will continue to focus on key
issues affecting American seniors: first, the high cost of
prescription drugs; second, retirement security--making sure
that our seniors have the financial resources that they need
for their retirement and that they do not outlive their
savings; third, greater investment in biomedical research for
diseases like Alzheimer's and diabetes that disproportionately
affect older Americans; and, fourth, stopping financial schemes
and other scams targeting older Americans. In today's hearing,
we will look at the progress being made to coordinate and
strengthen the fight against these scams and explore what
further steps could be taken to protect our Nation's seniors.
Combating this type of fraud has long been a focus of this
Committee. In fact, this is the 22nd hearing that the Aging
Committee has held during the past six years to examine scams
affecting older Americans. Previously, we have highlighted the
notorious IRS imposter scam, the Jamaican Lottery scheme,
computer tech support fraud, grandparent scams, elder financial
exploitation, identity theft, romance scams, and the ``Drug
Mule'' scam--where seniors are tricked into unwittingly serving
as drug couriers.
A number of critical points have emerged from our work.
First, many scams are perpetrated by criminals operating from
foreign call centers, beyond the reach of state and local law
enforcement and thousands of miles from the seniors whom they
victimize. The criminal networks behind these scams typically
maintain crews of ``runners'' within the United States to
launder the money stolen from victims and send it overseas as
quickly as possible, using wire transfers or gift cards.
Fighting these scams requires a coordinated response led by the
Federal Government, in close cooperation with state and local
law enforcement, the private sector, and stakeholder
organizations.
I am pleased to say that law enforcement has stepped up its
efforts to combat these networks. A good example is the
takedown of five call centers based in India and the arrests of
their U.S. based co-conspirators in late 2016. The case against
these fraudsters culminated last year in the sentencing of 24
individuals in the U.S. to prison terms, coupled with orders to
pay hundreds of millions of dollars in restitution to their
victims. This case illustrates the power of coordination: three
federal agencies led the investigation, assisted by local law
enforcement in four states, and more than a dozen U.S.
Attorneys' Offices around the country. A number of other
federal and international agencies provided significant
support.
Another excellent example of the value of coordination was
the sweep of elder fraud cases last February--the largest of
its kind in our Nation's history. This sweep resulted in
criminal charges against more than 200 defendants who had
engaged in elder fraud schemes in which victims lost more than
half a billion dollars. The sweep included cases in more than
50 districts and involved multiple federal, state, and
international law enforcement agencies.
We have learned in our prior hearings that combating fraud
is a lot like playing that frustrating game of ``Whack-a-
Mole.'' Con artists are ruthless in their efforts to devise new
schemes to defraud their victims. Although the scams we have
examined differ in scope and structure, one factor is common to
all: the fraudsters need to gain the trust and active
cooperation of their victims. Without this, their schemes would
fail. Oftentimes these criminals harass their victims into
cooperating with them. Other times they seduce them into
cooperating with them. That is why it is so important that
seniors and the public at large recognize as quickly as
possible the red flags that signal potential fraud. Coordinated
efforts to educate the public to the scammers' tactics are
therefore critical, and that is one of the reasons that we have
held this series of hearings.
Another key point that has emerged from our investigations
is how much the scammers depend upon technologies like Caller
ID ``spoofing,'' robocalling, wire transfers, and gift cards to
perpetuate their schemes. This problem is only getting worse.
Last year, the Federal Trade Commission logged an incredible
3.8 million complaints about robocalls, and some experts
estimate that nearly half of all mobile phone calls will be
fraudulent by the end of this year unless technology is
deployed to identify and block those calls. This Committee has
repeatedly stressed the need for regulators and the business
community to work more aggressively to stop scammers from using
inexpensive technology to facilitate their fraudulent schemes.
There is a counter technology, and I find the lack of progress
in deploying this protective technology to be very troubling.
This year we are going to redouble our efforts to ensure that
this persistent problem is solved.
Today we also are releasing our updated 2019 Fraud Book. As
we have done for the past several years, this book lists the
top ten scams perpetrated against seniors that are reported to
our Committee's Fraud Hotline. The book includes tips for
recognizing, avoiding, and reporting these common scams. Once
again, the IRS Impersonation Scam, in which a criminal calls an
unsuspecting victim pretending to work for the IRS and
claiming, wrongly, that the victim owes unpaid taxes and
demanding payment immediately, is the number one most reported
scam on our list.
Despite the work of this Committee and of our witnesses,
far too many seniors are still losing money and, often, their
retirement savings to con artists. Stopping these scam artists
requires a coordinated response from all levels of government,
from advocacy groups, from the private sector, but the fact
remains that alert citizens are our number one defense. I am
proud of the Committee's work to help seniors become more aware
and more informed and to put those heartless, ruthless
criminals on notice that they will be caught and brought to
justice.
I very much appreciate the extraordinary group of witnesses
that have joined us today, and I am now pleased to turn to our
Ranking Member, Senator Casey, for his opening statement.
OPENING STATEMENT OF SENATOR
ROBERT P. CASEY, JR., RANKING MEMBER
Senator Chairman. Chairman Collins, thank you very much and
thanks for having this hearing, and I want to thank our
witnesses. This is a critically important issue that so many
Americans talk to their elected representatives about, and it
is critical that we continue our work on this issue.
We know that though underreporting causes experts to
struggle to estimate the total financial impact of scams and
financial abuse targeting seniors, we do know that it adds up
to at least $3 billion a year. This number is staggering, and
that might be an understatement; but the impact a con artist,
just one con artist, can have on the life and even the
livelihood of a victim and their family is much, much worse
than any number.
As we will hear today, some scammers are able to rip away
tens of thousands of dollars from our loved ones, robbing them
of their nest eggs and threatening their retirement security.
This is why government officials at all levels, and our
partners in the private sector must do everything we can to
prevent scams before they happen.
Each one of us has had the experience of watching a parent
or a relative age and, with that, the experience of worrying
about their financial security, and so everyone who can play a
role in stopping scams must play a role in this effort.
Thankfully, we have had some good progress.
For example, in Pennsylvania the Attorney General, Josh
Shapiro, recently announced a commitment from three major
retailers to change their policies to protect consumers from
scams. These retailers will reduce the total net worth of gift
cards that can be purchased in one visit. This is so important
because, in growing numbers, con artists are asking for the
barcode number on gift cards as a form of ``payment.''
These retailers have also committed to increasing the
training employees receive on how to spot a scam and how to
stop it. The collaboration between Pennsylvania's Attorney
General and these companies is one that we should replicate.
I am proud today to reintroduce the Stop Senior Scams Act
with Senator Moran, who joins us here today, and I am grateful
to be working with Senator Jerry Moran on that effort. This
bill will bring together the best minds from the public and the
private sectors to develop solutions to ensure that seniors do
not lose one more penny to a scam artist.
It is a common sense proposal. It has the support of
organizations like AARP, Consumer Union, the National Retail
Federation, Money Gram, and many more, and as we will hear
today from Erika Flavin, the effect of scams on seniors' lives
is too great for us to not fight back.
Again, I want to thank Chairman Collins and the members of
this Committee for being here today and to Chairman Collins,
once again, for holding this hearing, and we look forward to
hearing from our witnesses.
The Chairman. Thank you very much, Senator Casey.
We will now turn to our witnesses. First, I will defer to
the Ranking Member to introduce our witness from the
Commonwealth of Pennsylvania.
Senator Casey. Thank you, Chairman Collins.
Erika Flavin is our witness from Willow Grove,
Pennsylvania, in southeastern Pennsylvania. Erika will tell us
about how her parents lost over $80,000 to a grandparent scam.
Erika, we want to thank you for bringing this story to us.
I was saying to you earlier as we were talking that I want you
to convey our gratitude, not only mine but the gratitude of
this Committee and well beyond this Committee, to you and your
family and your parents for making it possible for us to learn
from what happened. It has got to be very difficult to tell and
retell this story, but it does help a lot of people when you do
that, so please thank your parents and your family for that.
I also want to thank you for traveling here today, as is
true of our other witnesses, to share this story and your
willingness to shine a spotlight on harmful scams and the
positive impact that will have on people's lives and preventing
other families from going through what your family experienced.
I also want to recognize your son, Timothy, who joins you
here today.
Thank you again for being here. We look forward to your
testimony.
The Chairman. Thank you very much.
I am now going to turn to a special guest for the Committee
today, my friend and colleague Senator Jerry Moran of Kansas,
who, as Chairman of the Senate Commerce Subcommittee on
Consumer Protection, has also done a lot of work to combat
scams targeting seniors, and I would invite him to introduce
the witness from the State of Kansas.
STATEMENT OF SENATOR JERRY MORAN, CHAIRMAN
OF THE COMMITTEE ON COMMERCE, SCIENCE, AND
TECHNOLOGY, SUBCOMMITTEE ON MANUFACTURING,
TRADE, AND CONSUMER PROTECTION
Senator Moran. Madam Chairwoman, thank you very much for
the opportunity and the invitation to be here to introduce my
Attorney General, the Attorney General of the State of Kansas.
Before doing that, I thank you for hosting this hearing
regarding elder fraud. Fighting elder fraud is a noble cause. I
was thinking to say what a timely moment it is to have this
hearing, but as I thought about those words, there is no time
in which this issue unfortunately is not important, so there is
no one moment. It is a constant battle that we face.
I also would like to thank the Ranking Member for his
leadership, of course, on the Subcommittee, but also for him
teaming up with me and our office, our team, as we pursue the
Stop Senior Scams Act. It is designed to make certain that
retailers, financial institutions, wire transfer companies, and
others have the resources necessary to train their employees so
we can stop fraud as it is occurring on their premises, and
Bob, it has been a pleasure to work with you on this and other
issues in the U.S. Senate.
My primary mission of the morning is to welcome and to
thank the Attorney General of Kansas, Derek Schmidt, who comes
here not just as the Attorney General--that is an honor in and
of itself--but comes as an advocate on behalf of Kansas seniors
and, in fact, American seniors. He is the immediate past
president of the National Association of Attorneys General, and
his initiative during his tenure in that position was titled,
``Protecting America's Seniors: Attorneys General of the United
States Against Elder Abuse.'' As our Attorney General, he has
been responsible for significant and important initiatives. He
combined within his department and created an entity called
``Fraud and Abuse Litigation Division,'' in which there is a
focus on elder abuse, and it houses our statutory Abuse,
Neglect, and Exploitation Unit.
Derek is a former Senate staffer, was a Senate staffer
before I was a Senator, where he worked for United States
Senator Nancy Kassebaum, someone who remains highly regarded
and revered on this and other issues in Kansas and across the
country.
Attorney General, thank you for your service to the people
of the State of Kansas, and thank you for sharing today your
knowledge and information and advice and suggestions to the
U.S. Senate.
The Chairman. Thank you very much, Senator Moran.
I am delighted that from the great State of Maine we will
hear today from Candice Simeoni. She is the president and
founder of the York County Elder Abuse Task Force, and she
works as a law enforcement officer at the Kennebunk Police
Department in Kennebunk, Maine. In 2018, Officer Simeoni worked
on an astonishing 77 elder justice cases, including three that
have been referred to the local district attorney. She has
really been such a leader in this area in the State of Maine. I
wish we could clone her and put her in every community in the
state and in the country, and we thank you for being here
today.
Our next and final witness this morning, we will be hearing
from Judith Kozlowski. She serves as an expert consultant on
elder justice matters within the Department of Justice, and she
told me this morning that she last testified on this very issue
25 years ago, so it shows how dedicated she has been, and it
also shows that this has been a problem for a very long time,
and I think it is now getting the attention that it deserves.
She will provide insight into how the Federal Government
fosters coordination among federal agencies to better protect
seniors from scammers.
I thank you all for joining us, and we will start with Ms.
Flavin.
STATEMENT OF ERIKA FLAVIN, DAUGHTER OF
COUPLE SCAMMED BY GRANDPARENT SCAM,
WILLOW GROVE, PENNSYLVANIA
Ms. Flavin. Good morning. I would first like to thank
Ranking Member Senator Casey and Madam Chairperson Senator
Collins for inviting me to speak regarding the recent scam that
was perpetrated on my parents.
Over the course of their lifetime, my parents have held a
variety of jobs. My father worked several jobs throughout his
career and was also a member of the Army Reserve. My mother
worked in a variety of light manufacturing jobs and later
served as a teacher's aide.
Unfortunately, last year my parents became victims of the
grandparent scam. My parents were contacted on the 17th of
September by a supposed lawyer representing their grandson, my
nephew, who had allegedly been involved in a car accident in
Tennessee, was in jail for a DUI, and needed $10,000 cash for
bail. My parents withdrew $10,000 and mailed the money as
instructed.
On the 19th of September, the supposed lawyer told my
parents that my nephew had been re-arrested on charges of
vehicular manslaughter due to the loss of a fetus in the
accident of the car that he allegedly hit. This time his bail
was now $50,000. They withdrew $40,000 more. This time my
father had to sign a document that he was not being taken
advantage of, but the bank asked no further questions. They
were told to wrap the money in carbon paper so that it would
look like a book before mailing it.
On the 21st of September, that lawyer told my parents that
the charges against my nephew would be reduced and he would be
able to go free if damages were paid for the balance of what
insurance did not cover. This amount was $30,544. They again
mailed the money as they were told and were also told that they
would receive the bail money back that they had put up, a total
of $50,000.
During some of these calls, my parents spoke to someone
claiming to be my nephew, but who said he sounded different
because of a broken nose from the alleged car accident he was
in.
On the 28th of September, they received one final phone
call from the phony lawyer asking for another $20,000. The
phony lawyer said he needed a $20,000 retainer for successfully
defending my nephew. My parents refused to send any more money
and decided that my nephew's parents should be the one to
retain him as an attorney. When they did not get the bail money
back, they contacted my sister and quickly learned that my
nephew was where he was supposed to be, in college.
It was then that my parents knew that they had been
scammed. My parents contacted local law enforcement to file a
police report, but assumed they were not getting back any of
their money.
Financially, my parents gave away $80,544. This was most of
my father's Thrift Savings Plan retirement account. This was
money that was supposed to be used to help with those life
expenses one incurs as they age. Between their Social Security
and pension, their living expenses are covered, but there is
little to no money for any large emergency. My father spoke to
the banker afterwards, and the banker admitted that he thought
something was going on, but he was not allowed to say anything.
I disagree. The banker does not have the right to stop my
father from taking out his money. Banks can be a first line of
defense in helping educate seniors about these types of scams.
The emotional wreckage that this whole thing provoked is
far worse. My mother is in a constant state of anxiety and
feels that she is a bad grandmother because she did not
recognize that the voice was not her grandson's. My father has
flashbacks to a time when his family had to put up their house
for bail when his younger brother was arrested.
My siblings and I were heartbroken that our parents went
through this all alone since they were originally told that
they were under a gag order and wanted to respect their
grandson's wishes not to share this with their mother.
I also understand that my parents may not have understood
or recognized potential signs of the scams due to them being so
devoted to their grandchildren. I would again like to thank my
parents for giving me permission to tell their story in the
hope that it can help someone else.
In the words of my father, ``We are bent. We are not
broken. We will survive this incident. In a way it feels like a
sad death in the family. If you are not busy, thoughts creep
into your head. Why? How could people do this to other people?
I gave away $80,544. How could I be so stupid? An incident or
an innocent conversation can set off feelings of sadness
bordering on depression. You have to fight it and not let it
get you down. We realize we will never see the money. We still
have a mortgage, two 10-year-old cars, two cats, and our
family.''
Thank you again, Senator Casey and Senator Collins, for
inviting me here to tell my parents' story.
The Chairman. Thank you so much for your courage in coming
forward. That is just heartbreaking, but my hope is that others
who hear this testimony will be more on guard when they get
similar calls because of the courage of your parents and you in
telling your story. We will have additional questions for you
later.
I am now going to call upon Officer Simeoni. Before I do, I
want to recognize that there is another member of the York
County Task Force who is with us today, Karen Dillon, who works
at the local hospital, and we talked this morning about how
health care workers can play a role in identifying fraud or
exploitation or abuse.
Officer Simeoni.
STATEMENT OF CANDICE SIMEONI, PRESIDENT
AND FOUNDER OF THE YORK COUNTY ELDER ABUSE
TASK FORCE, AND LAW ENFORCEMENT OFFICER AT
THE KENNEBUNK POLICE DEPARTMENT, KENNEBUNK, MAINE
Ms. Simeoni. Chairman Collins, Ranking Member Casey, and
Members of the Committee, I am humbled and honored to be here
before you today. Thank you for the opportunity and for your
commitment to protecting our older Americans. I am the founder
and the president of the York County Elder Abuse Task Force. I
am also a law enforcement officer at the Kennebunk Police
Department.
Over my law enforcement career, I have had the opportunity
to complete extensive training in the field of elder abuse. I
am proud to have been part of numerous advances in combating
elder abuse over the past 15 years. I have a true passion for
being the voice for our vulnerable populations, primarily our
elderly and those with disabilities. I hear heartbreaking
stories like Mrs. Flavin's parents all the time, and I respect
her courage to be here today. In fact, last year I worked on
over 70 elder justice related cases ranging from simple scams
to the loss of entire estates.
I started the York County Elder Abuse Task Force in 2005.
Once I realized the multidisciplinary approach was so vital to
protecting our elders, I knew I had to make it happen. My very
first cases were incredibly difficult. I had so many questions.
Within my profession, I could not find those answers, so I
started visiting others who I thought could help me with the
victims in my cases. The majority did not understand what elder
abuse even was. It was a goal of mine to educate not only
myself but as many others as possible. In doing so, I built
credibility, sparked some passion in others, and developed an
incredibly solid task force with a group of professionals that
I can count on when I need help. I realized that the initial
goal for these cases should not be about prosecution. Instead,
it should be about preventing further victimization as much as
possible and then work to develop a case.
The York County Elder Abuse Task Force is a group of
committed professionals from many different fields. We come
together to share our knowledge and skills, to serve as a
resource to educate the public. We rely on each other to remedy
our cases as effectively as we can and count on our skills to
be an asset to victims and witnesses alike. The county of York
is our primary focus, but making an impact nationally is our
goal.
The most important goal for the task force is education. We
vow to educate ourselves as much as possible so that we can be
an asset to others. The group conducts mobile awareness
discussions and presentations throughout our county and in our
entire state. We coordinate ``Senior Safety Road Shows'' where
we give 30-minute talks on current scams in their particular
areas. We encourage local law enforcement and town/general
assistance representatives to attend with us as we meet
residents of their community.
In addition, I instruct the elder abuse segment at the
Maine Criminal Justice Academy for all cadets that become law
enforcement officers in the State of Maine. We host a very
successful conference focused on the importance of the
multidisciplinary approach to elder abuse. I started this event
11 years ago. This to us is an example of building credibility
and exemplifying the multidisciplinary mind set. At this year's
conference, we were pleased to be joined by the newly appointed
Elder Justice Coordinator at the U.S. Department of Justice. We
distributed copies of this Committee's Fraud Book to more than
100 attendees.
I recognized the need for a specialized focus on our elder
population the very first year I became a law enforcement
officer. While dealing with a personal case involving my own
grandfather, I also recognized the vulnerability of the
community that I worked in. The York County coastline is
inundated with retirees and many elders living alone. As a
matter of fact, according to the 2017 U.S. Census data, the
State of Maine is the oldest state in our Nation still. The
population of Maine over the age of 65 is nearly 20 percent. In
Kennebunk, that same population is over 35 percent. With this
knowledge, it is our duty to act.
Traditionally, law enforcement has dealt with crime
committed by and against the younger population. This
population shift and the increase in crime targeted
specifically against older Americans requires the development
of specialized services to address elderly victims of crime.
Fraud through the mail is fascinating to me--and not in a
good way. One piece to the multidisciplinary approach for me
has been my work with the U.S. Postal Investigators. I have
learned a great deal from them. Seeing international scammers
make our domestic elders unknowing vessels of fraud is
heartbreaking. Innocent U.S. elders losing everything and
taking other unsuspected victims along is devastating.
The investigations are time-consuming, the resources are
limited, and the law protecting this population from crime is
not simple to prove. We need to move forward now with
protecting our elders. The State of Maine would be an
incredible place to start these greater initiatives. Together
we could pave the way to be an example for other states to
follow. I encourage this Committee to consider two strategies
that would help professionals like me help our elders.
One, I believe the statute needs to be modified or changed
to protect victims even when they do not believe that they are
victims. With reactive elder abuse, there is little hope for
recovery because of the devastating effects of these
situations. Those of us on the front line need to be more
proactive to inform our elders, but we also need help lifting
the limitations of the current law when we do have to react.
Many of the cases that I see stall at the victims themselves.
They do not want to recognize that they are, in fact, a victim.
They cannot comprehend why someone would manipulate them or
prey on their innocence. Their abuser is often considered
charismatic and comforting, something that some elders have not
felt in a very long time. Second, I encourage the development
of specialized law enforcement positions in each state. Elder
exploitation investigation teams, much like the Drug
Enforcement Agency units with the ability to arrest, see cases
from start to finish, they need to work with multiple
organizations and send solid messages to all of our residents
about the seriousness of our efforts while directing messages
directly to those who are targeting our elders.
I am so grateful to be among all of you today, and I truly
hope you understand the hope that you not only give to me but
to our older Americans. Chairman Collins and Ranking Member
Casey have been so instrumental in recognizing the importance
of this and tackling this catastrophe. Chairman Collins has
been noted in many of my annual conferences that my task force
holds and even contributed a wonderful keynote video in 2017.
She gives me hope, and this Committee gives me hope.
Thank you all for your hard work in publishing the Fraud
Books. They are available at our conferences every year. It is
time to bring knowledge and new initiatives to the forefront,
to send messages that this epidemic is hidden no longer.
I have been working really hard in my state for many years,
and I am at a point where I need help on the federal level. I
hope that we can work together toward fighting this ``touchy
subject,'' this ``hidden epidemic,'' so that the statistics do
not increase the way that they are predicted to do.
Again, I thank you and I look forward to answering any
questions that you may have.
The Chairman. Thank you very much not only for your
testimony but for your passion for this cause and your
leadership.
Attorney General Schmidt.
STATEMENT OF THE HONORABLE DEREK SCHMIDT,
ATTORNEY GENERAL, STATE OF KANSAS, TOPEKA, KANSAS
Mr. Schmidt. Chairman Collins, Ranking Member Casey, thank
you very much. I appreciate the opportunity to be here today.
You have my written testimony, and if it is agreeable, I will
let it speak for itself and perhaps just talk with the
Committee about some of the highlights in my oral presentation.
A couple of points. This is a subject matter for me
personally that, through no strength of my own, became an
interest of mine early in my law enforcement career. I was an
Assistant Attorney General 20 years ago now. I was assigned to
the Consumer Protection Division, something I had, candidly,
never thought about doing when I first took the job, and
because of that was exposed to a variety of scams and rip-offs
particularly of elder Kansans, and it is the sort of thing that
makes your blood boil once you see it and inspires you to try
to do more, so it is an area we have tried to focus on
throughout my career at the Kansas AG's office and the
international association, as Senator Moran mentioned, this
past year.
I usually tell folks that when you cut through all the
numbers and the analysis from the smart folks, for me there are
three factors that have converged that make this a timely topic
that will remain timely throughout all of our public service.
The first factor is simply the number of Americans over the
age of 65. Whatever the current accurate numbers are, I know I
have looked at data sets that show that between 1900 and 2010--
so a century and a decade--the number of Americans in that age
group grew from around five million to around 40 million. I
think we are around 50 million today if I am not mistaken. That
is also a larger percentage of the population, not merely a
larger number. We went from about three percent to about 12
percent, and we have somewhere in the range of 10,000 Americans
a day turning age 65, and that is going to remain true for at
least the next decade, for the foreseeable future, so the
``target population,'' for lack of a better term, is growing
and is going to continue to grow.
The second factor is perhaps a softer factor, but I think
it is real. It certainly is in my experience. Because of the
generation we are talking about, there are certain generational
characteristics that tend to create vulnerabilities. Some are--
you know, some are my mom. She will not hang up the phone
without explaining to somebody why she is going to hang up the
phone. She feels a need to be polite, and that is not unique to
her. It is a reality. Some is loneliness. That was mentioned, I
believe, by you, Chairman, in your opening, and that is
certainly true. We see those cases time and time again where
somebody falls victim because they know something is amiss but
at least somebody is talking to them on the phone or somebody
is engaging them in conversation, and they will take the
financial risk in order to have somebody who will actually talk
with them, and to some extent, of course, it is physiological.
There are certain changes that often are associated with aging
that can make somebody more vulnerable to scams, so that is the
second factor: greater number of people with a greater
vulnerability.
The third factor is one we do not talk about as much, which
is simply the money. The median household wealth of an American
family with at least one member age 65 and older today is
somewhere in the range of $240,000. That is the most wealthy,
on average, demographic age-wise in the United States; and at
risk of overstating the case, because we are in the richest
country in the history of the world, it is probably the most
wealth concentrated in any age-based demographic in the history
of the world, so you have more targets, perceived and in
reality, more vulnerable with more money than ever before. It
should not be surprising that the problem is exploding and is
going to continue to.
I'm going to mention just a few particulars that my
testimony highlights, things I think we could do, concrete
steps. They are not panaceas, but I think they are worth
focusing on.
First is on the robocall side. We are not going to fix this
problem without the tech companies being our partners. We
simply are not. The volume is too large. The inability to find
these folks halfway around the world, calling in with virtually
free calls over fiber, is too great. We are going to have to
shut them down in the first instance, or we are not going to
make material progress.
We have tried from the Attorney General community side. We
have an ongoing working group with the tech companies. We are
not techies; they are not law enforcers. We are trying to at
least talk the same language so that we can help encourage
changes that enable them to not only make available but promote
to their users, particularly their elder users, simple
technologies that can actually shut this stuff down before the
phone actually rings.
Second is education and outreach. I realize it is a soft
commentary and we all say it, but it is absolutely true. If
people do not tell the stories, if pride gets in the way and we
are unable to share, ``This happened to me, to my neighbor, to
a friend at church, to somebody I work with, to somebody at the
local nursing home,'' it is so easy to believe it does not
happen here, and the reality is it is widespread, and I will
guarantee it has happened to either somebody--for everybody in
this room, it has either happened to you or to a loved one or
to someone you have known, and I suspect we all know that. We
have got to tell the stories, and we have got to educate on
ways to spot and avoid.
Third, that federal and state partnership that you
mentioned, Chairman, is absolutely critical. I offer a
suggestion in my testimony on a model we have looked at in
Kansas. I would be glad to share more about that later, if you
would like, but it is a very simple concept on how we can
partner with some of the regional offices of some of the
federal law enforcement agencies to try to improve prosecution
of cases that, because of thresholds and caseloads, are
unlikely to receive the attention of the U.S. attorneys'
offices, not through any fault of the U.S. attorneys, simply
because of volume and prioritization.
Fourth, I mentioned a bill. I will not dwell on it here,
but there is a bill in the House that I testified on last year
that would alter federal law restriction on the scope of use
for our Medicaid Fraud Control Units. Essentially, it would
remove a barrier in federal law to allow us to use those
existing federal and state assets to go after more patient
abuse, not just fraud on the taxpayers and the system, but more
patient abuse, losses to individuals. I think it makes eminent
sense. It got out of House Energy and Commerce on a voice vote.
It has bipartisan sponsorship in the House, but I am not aware
if it has gotten much attention in the Senate yet, and I would
just bring that to your attention.
Finally, it is not in my written testimony, but I would
close by underscoring what Officer Simeoni said. We have also
concluded that the multidisciplinary team approach is
absolutely indispensable at the local and state level to being
able to address this problem in a systematic manner, and
anything we can do to assist in the development and support of
those MDTs would be very much welcomed, and I thank you for the
opportunity to testify today.
The Chairman. Thank you so much for your excellent
suggestions.
Ms. Kozlowski.
STATEMENT OF JUDITH KOZLOWSKI, JD, ELDER
JUSTICE CONSULTANT AND SUBJECT MATTER EXPERT,
WASHINGTON, D.C.
Ms. Kozlowski. My great thanks to the Committee for
allowing me this opportunity to share with you this morning
some of my experiences and observations in the field of elder
abuse and financial exploitation. I have worked in this field a
very long time. I have had lots of different jobs, but always
focused on trying to think about how we can better approach
systemically the issue of elder abuse and financial
exploitation. We have made a lot of progress, particularly in
the federal area, in this area, but as we know, there is a
growing problem and a growing demographic.
Whenever I do this work, though, I always think of my Uncle
Howard who was a small business man and a World War II veteran.
He also had Alzheimer's disease, and during that time, he was
targeted by an investment scam in Southern California, which
was cleverly targeted at the entire Leisure World where he
lived. He lost nearly everything. He had pennies on the dollar
when everything was done, and my aunt was forced to place him
in a public facility during the last year of his life. She was
his business partner. She was legally blind, and she took three
buses each way, each day during his last year to visit him.
That was not the life they planned for, and that was not the
life that they deserved. I have met many victims over the
course of my prosecutorial career who have been in similar
situations, but because my Uncle Howard was my very favorite, I
always remember him.
I started my career in the district attorney's office in
New York County, and I still carry with me many of the lessons
I learned there as a prosecutor. I moved to the Securities and
Exchange Commission where I worked on investment frauds,
particularly small offerings and penny stock frauds. This was
my introduction to the devastation suffered by older victims of
financial fraud and it cemented my prosecutorial commitment to
these cases. As my career has continued, as a federal
prosecutor in the Southern District of Florida and here in the
District of Columbia, also at the Financial Industry Regulatory
Authority and the CFPB, and as a senior adviser at the
Administration for Community Living, also as a consultant at
HHS, and now back again as a consultant with the Department of
Justice, I have learned so much more about the issues of
cognition and the social challenges and the work that is
necessary beyond law enforcement and the complexity of
supporting older adults, the necessity that we have, as
everyone here has said, of multidisciplinary action. It is hard
to age, and it is also hard for us to address those issues
without including a multidisciplinary approach.
One of the most effective multidisciplinary changes that
the Federal Government has made was to create and stand up the
Elder Justice Coordinating Council. It is a 12 member agency
group with a working group of staff members from those agencies
that worked on eight recommendations to help guide and create
an architecture to build a federal response to elder abuse and
financial exploitation, and I must tell you, when many of those
federal agencies first started, they looked around and
wondered, well, we do not do anything in aging, we do not have
aging in our title, we could not possibly belong here, and over
time I cannot tell you how many more committed people we have
in the field of aging from that very moment. There are many
agencies that have added components of those agencies to the
EJCC, and together many great things have occurred in the
collaboration of members of the committee and other people and
agencies, nonprofits and private sector have been brought into
the conversation, but let me highlight just a few things for
you.
In working through the EJCC, we were able to produce the
Interagency Guidance on Privacy and Reporting Financial Abuse
for Older Adults. We also helped build the Department of
Justice's Web site with robust financial exploitation
resources. Resources every member of the Council has
contributed to building that Web site to be able to make it a
premier place for information and training across the Nation at
both the state and local level as well as for federal
initiatives.
There have been collaborations now between the Postal
Inspection Service, the Administration for Community Living,
and many of its resources, the Department of Justice, and the
Corporation for National and Community Service.
I cannot tell you how many federal initiatives about elder
abuse and financial exploitation have come out of conversations
and meetings which had people in the room who had simply never
thought about these issues. With that new understanding, there
has been a strong federal commitment to addressing the issue of
elder abuse and financial exploitation. The EJCC has also been
able to leverage its membership for extraordinary dissemination
of materials. The Pass It On Campaign from the Federal Trade
Commission is one, and the Fiduciary Guide to Managing Someone
Else's Money from the Consumer Financial Protection Bureau is
another. It has also been instrumental in discussing what kinds
of innovation and research grants might be available to be
given. Training has become part of the work of this particular
group, and especially cross-disciplinary training. We are no
longer only training just law enforcement agents. There are
many professionals in the room who can learn from law
enforcement, but law enforcement can also learn from them as
well, including civil legal services. This work is critical.
When an older adult's life is upended because of financial
exploitation, their life is devastated. There are many civil
and legal aspects to the recovery of that person.
Let me also just briefly talk about the Elder Abuse
Prosecution and Protection Act that was passed last year. By
putting together an Elder Justice Coordinator in every federal
judicial district and requiring FBI training, it has moved the
field. We do not have the caseload numbers yet, but I can tell
you, I just know that knowing that there is someone in the U.S.
attorney's office makes all the difference in the world. The
FBI's commitment to training has been really extraordinary,
including victim witness advocates, neuroscientists, and elder
abuse experts in their training. Requiring community outreach
in that statute has been really important as we build more
multidisciplinary work within the field.
One of the other initiatives I would like to talk about
that came out of also working together with local groups has
been something from the International Association of Chiefs of
Police who just finished putting together roll call videos on
elder abuse. These videos can be used and downloaded from their
Web site for all 30,000 members of the IACP. They really focus
on the issue that the local police officers can be there and
are critical to this work.
My cases, as I did them, I could not do them without
multidisciplinary work; I could not do them without
cooperation. I will only mention one case to the Committee
where we had four federal law enforcement agencies, we had
three local police departments, we executed search warrants in
four different states. I had cooperation of financial
institutions. We seized cars and homes. We did search warrants,
but we could not do that without federal and state and local
cooperation. It is the way--it is not only the way of the
future; it is the way of now. It is the way we get these cases
done, particularly large scams.
We have mentioned education this morning, and I would like
to say that I think public awareness is key. Getting the
information out is really, really important, and we could also
do more in producing PSAs. There was one done at the Attorney
General's office in the State of New York this year on the
grandparent scam. Dr. Ruth Westheimer also was part of that
because she was, in fact, a victim. She wanted to participate
to get that message out to others. In that, teenagers talk
directly to the camera to their grandparents to say, ``Do not
do it. I love you. Do not send your money. Call me first.
Please, call me first.''
I have also learned that in many of the tribal communities,
that intergenerational approach has been extraordinarily
successful in this particular field, and I urge that education,
particularly also financial literacy education and
multigenerational approaches, be part of what we do.
Financial services has been key in growing the field. The
Senior$afe Act, as we mentioned earlier, was part of that.
NASAA's model rule, adopted now in 19 states, about to be
adopted, I think, this year in at least five or six more, and
the Securities Industry and Financial Markets Association has a
working group on senior investors, bringing together on a
regular basis those members in that field, holds regional
meetings and produced a magnificent handbook for investors and
brokers. FINRA rules of the trusted contact and transactional
hold have changed the world, and I cannot say enough about how
important it has been for the financial services industry, writ
large, to be part of this effort, and not only reactive after
something has happened but preventative. They have every
interest in keeping those assets in their institutions. We need
to continue to encourage better training for tellers and for
supervisors.
We have mentioned a little bit about technology this
morning, a whole field we have not even really explored, but
has all kinds of potential in preventative use against frauds.
We also have to remember while these tech frauds get lots of
publicity sometimes, it is really about 20 percent of where
elder abuse and financial exploitation lie. Most of our seniors
are victimized by trusted people and by family members. I
believe we will also need to think about this in future
initiatives in order to be able to focus on that as well.
Whenever I do this work, I come back to two things. The
highest risk factors are social isolation, which goes to
everything we have talked about today, you know, certainly as
you said that alert citizens are our number one defense. There
is no question that that is the case, and cognitive impairment,
we do not know enough about what happens with an aging brain,
and we still need to know that as well.
We are woefully behind in collecting any kind of usable
data. That is a subject for an entire hearing, in my view, but
there have been beginnings.
I am sorry I went way over my time. I apologize to the
Committee for that, but I thank you very much.
The Chairman. Thank you. Your testimony was fascinating.
Ms. Flavin, I want to take off where the witness just
concluded when she talked about the necessity for cooperation
from financial institutions. I thought it was heartbreaking
when you described your father going to the bank, making three
huge withdrawals that were not consistent with his pattern. The
first one, no one asked any questions. The second one, he was
asked to sign a statement, but no one really engaged him and
asked him, ``What is it going for?'' Or, ``Do you really want
to do this?'' Those kinds of questions.
I do want to give you a little good news on that front, and
that is, a bill that I authored last year with former Senator
Claire McCaskill became law. It is called ``Senior$afe.'' We
got the idea from the State of Maine, and what it does is it
encourages banks, credit unions, and other financial
institutions to train their employees to ask more questions,
and it also says that if they report a suspicious transaction
to the appropriate authorities, they are not violating bank
privacy laws.
Do you think that that law would have been helpful in your
father's case?
Ms. Flavin. Absolutely. When I was asked to testify and got
the green light to post that I was going to be here on Facebook
today, I sent it out to my co-workers. As a compliance
specialist, that is my job, to look into new rules,
regulations, and to make sure people are educated.
I had one person come up to me and say, ``My parents were
victims of the grandparent scam as well.'' They got $1,500 the
first time, and they were sending it through an electronic
money sending agency, and when they were asked for more money,
they went back to the same place, got the same employee, and
that employee took it upon themselves to go, ``Are you sure
that this is what you want to do? This sounds like it might be
a scam.''
Having somebody come up to my parents after they had, you
know, contributed $80,000 to a con artist is disheartening,
especially when the banker says he could not do that, but he
suspected something was going on. It is a smaller bank, and
that may be a resource issue for them, but absolutely, having
better education especially for smaller banks would have
absolutely helped them.
The Chairman. Thank you.
Officer Simeoni, you handled an extraordinary number of
cases last year, more than 75 cases, and you are also very
active in educating seniors. You also are very well known in
your community in York County, so I think people perhaps feel
more comfortable in reporting what is happening, but I want to
hear from you. Why don't you think that more seniors come
forward?
Ms. Simeoni. Sure, so we know that 90 percent of all
suspects actually are those who the elder loves or considers
family members, so it is very difficult for an elder to come to
somebody, a face that they do not really know, and tattle on
the people who they love the most in this world, so that is
very difficult for them.
We also know that, as we get older, we fear the loss of our
independence, and we know also that cognitive impairment comes
into play, and so it is a great fear for our elders to come
forward to say that, ``Maybe I am losing some independence.''
They think that maybe they will end up in a nursing home, and
so that is a fear that we all can get from victims, that they
did not want to tell because they were afraid someone was going
to think they were having some cognitive issues.
The last thing is that victims do not believe that somebody
could really manipulate them to the point where they would take
all of their money, so again, it is a generational thing that
we talked about earlier, that they cannot believe that somebody
would prey on their vulnerabilities and take advantage of them
the way that they are doing right now.
The Chairman. The Attorney General made a point about
seniors being too polite on the phone, and we see that in Maine
all the time, so particularly if they are living alone, they
are lonely or isolated, and someone calls them up and is a
total con man and tries to take them into their confidence, and
they are reluctant, they feel it is rude to just hang up the
phone.
What we are thinking of is coming up with a card that would
list things you could say, and one of the worst things to say
is, ``I am busy right now, but could you call back later?''
Believe me, they will, and yet that is a common way to get out
of a conversation for people.
Do you have any suggestions to seniors on what they should
say when they suspect that on the other end of the line is a
scammer?
Ms. Simeoni. Sure, so I wish I could talk to every elder
and let them know that it is OK to hang up and it is OK to
protect yourselves in the way where you just hang up the phone.
If it happens to be a grandparent scam or somebody who they
think they may know, it is OK to hang up and call the number
that they know will connect them.
We do have a hard time with that, and we have actually, as
a task force, we have come up with those, and we give them to
elders with the File for Life paperwork, when we have
interactions with them, but we noticed that it is not always a
charismatic voice on the other line. Actually, I just learned
that last night in Kennebunk somebody fell victim to a scam
because they felt harassed. They forwarded almost $5,000 to a
routing number that they do not even know who it is attached to
because of the fear of intimidation, so we not only see the
charismatic, loving voice; we also get that intimidation and
harassment that just says, you know, ``I will give you some
money so you will stop.''
The Chairman. Thank you very much.
Senator Casey?
Senator Casey. Thanks so much.
I will start with Erika Flavin about the story you told in
the testimony. At one point in your testimony, you talked
about, I think I am quoting directly from the testimony,
``While a banker does not have the right to stop my father from
taking out his money, I fail to see how a bank representative
going up to someone'' and talking to them about it, that that
should not be allowed. We worry that that kind of education or
that kind of alert is sometimes not possible.
The legislation Jerry Moran and I are reintroducing has as
its foundation an advisory committee that would ensure that
banks and other businesses have both information and tools so
they can train their employees.
Do you think if that were in place, do you think it is less
likely that your family would have had this horrific
experience? What do you think about that as an idea?
Ms. Flavin. I think it is an excellent idea. I think a lot
of it depends on the words that are used. I am sure that if
somebody had come up to my father in the bank and said, you
know, ``We are noticing that you are taking out these large
amounts of money. Can you just sit with me a moment so that I
can share some information about scams that are targeting
people in general, not just seniors.'' I think if it had been
worded like that, my father definitely would have sat down and
listened. My father is a talker. He loves to talk to people,
and he would have been very receptive to that type of
conversation.
Senator Casey. We are hoping that we can have better
training. That is one way to engage in preventative activities.
I was struck as well by the language in your testimony or
the references in your testimony to the emotion of this. You
said at one point--I think it is page 3--that, ``Even sadder .
. . there is nothing to protect them or anyone from these
`emotional' transactions.''
Ms. Flavin. Correct.
Senator Casey. Then you talk about the aftermath when you
refer on the next page to the emotional wreckage. That is why
it is so difficult for people to understand how this can
happen. It is very easy when you are looking in the rearview
mirror in the light of recollection or in the light of kind of
Monday morning quarterbacking that somehow people should have
been aware. Probably the most pernicious part of this, at least
initially, other than the actual theft, is the playing upon
emotion, and it is very hard for anyone after the fact to
recreate that emotional moment, and that is why I have always
said this can happen to anyone at any age in any circumstance,
any level of education, because we are all likely to be duped
if we have an emotional stake in the crime where people are
using that emotion.
I hope that you will continue to tell us what you hope we
would do by way of legislation or policy based upon your own
family's experience, and we are just--I know it is difficult
for your parents, your family, to understand this, but little
by little we hope that burden they have been carrying around
will be lifted as they begin to help and have already helped
people around the country.
With the passage of time and with the prevention--I wish we
could show them every person who was helped by their courage,
by their coming forward. It would have been easier for them to
say, ``It is bad enough that we were ripped off. Let us just
keep quiet about it and move on.'' So please convey to them our
thanks.
I know I am almost out of time, but I will just quickly
present a question to Attorney General Schmidt. Thank you for
your testimony and the substantial experience you bring to
these issues, and I know you have done some work--a lot of work
on robocalls, and you have been engaged in the fight against
these robocalls.
How do you think we can tackle that problem? And do you
think there is a need to fight this problem more
internationally, and any suggestions you have for that?
Mr. Schmidt. Well, Senator Casey, I think maybe just a
couple of thoughts on that.
One, the vast, vast majority of these calls originate
offshore, virtually all of them. As I always tell constituents
who express distress to me with some frequency, ``I am on the
no-call list, but I am getting more calls than ever''--I am
sure you have heard that repeatedly, and it is certainly true.
I usually tell them, you know, ``You are not going to believe
this, but the no-call list actually works. It actually prevents
law-abiding telemarketers from calling you if they are
disqualified from calling as a general matter, and if they do
not, we can find them and punish them and stop the behavior.''
The problem is that the explosion in volume is by crooks
who are offshore, beyond the reach of state and local law
enforcement in almost every case, and so we have to--we have no
choice. We must work and rely upon our federal partners in any
enforcement action, which is only conceivably possible in the
minority of cases where somebody can actually find who is doing
the calling. Senator Collins in her opening referenced the
enforcement action in South Asia in 2016. That is a prime
example of success that we are all thrilled with. Of course, as
soon as those folks were gone, others flooded back into the
marketplace.
We will, in my view, never solve this problem on the
enforcement end. We must continue enforcement, but that will
not fix it. It has to be prevention, and of course, it is the
rise in whenever that was, the 1990's or--I am not a historian,
I am not a techie, but whenever fiber connected us with the
rest of the world in a way that it had not before, and so it
became possible to make virtually free VOIP calls or other
calls, if you have a laptop and access to the Internet from
anywhere in the world, into every living room in the United
States, when that became possible, this problem exploded, and
in my view, it will only be when the technology that enabled it
is countered by a technological antidote that is simple to use,
effective, and readily available to consumers that we will have
meaningful blocking, and that requires the telecom companies
be--and they are, but that is why, you know, I do not think
there is a solution here without an ongoing conversation with
the folks that provide the telecom services.
Senator Casey. Thank you.
The Chairman. Thank you very much.
I want to explain to our new members that we call on people
based on first-come/first-served as far as appearance after the
gavel has fallen, and many of you arrived at the same time, so
then we go by seniority on the Committee, and applying that
complicated formula, Senator McSally would be the next
questioner.
Senator McSally. Thank you, Madam Chair. I really
appreciate it, and thanks to all of you for your testimony, and
Ms. Flavin, thanks for telling your story.
We all, I think, with our parents or those we know who are
older, think of our own experiences. I think of my Mom coming
from, ``You have to answer the phone, you have to talk to
whoever calls.'' We have now trained her where she does not
answer the phone. If she does not know the number, she knows to
hang up, and so, again, we all have our personal experiences
with that.
Education is so important and having a team of people
around you to help prevent. We have got a scam squad in Pima
County where you have got seniors working with the sheriff's
department trying to teach each other and help each other and
encourage that training, and we have seen really strong results
from that. I held a forum when I was in the House in my
district to have more education, so education is key. You have
all talked about it.
Ms. Simeoni, Maine has a lot of rural areas, just like in
Arizona. We have so many of our seniors that are out in rural
or tribal areas and not connected anywhere, so the challenge of
education and getting to them in these rural areas, can you
speak to that and any initiatives that could partner with you
in Arizona?
Ms. Simeoni. Yes, absolutely. I think about this a lot.
When we place flyers everywhere saying, ``Come to our senior
scam road shows,'' or ``Come to our education,'' we get a great
group, but it is really not the group that we need to reach.
I really think about this a lot, and I am actually teaming
up with a local videographer, and even if you are in rural
wherever, you still have--we call it the ``Local Channel 5.''
It is a local channel on your TV that just kind of goes on and
on and on, and I have noticed as a responder on the front line,
even going to medical calls, that for some reason is always on
an elder's TV when I respond, and so for me, I think maybe
delivering a message through that vessel would be really good,
because it is not going to be the people who come to my forums
or the ones that would listen to us about elder abuse. It is
the ones that we need to indirectly contact, and I think that
would be a great way, public service announcements, but make
them human. You know, make them from that area with contact
numbers from that area. I think that would be a really good
avenue to explore.
Senator McSally. Great. Thank you.
Attorney General Schmidt, Attorney General Brnovich in
Arizona, they have been doing some great work related to the
senior scams. Governor Ducey yesterday announced in his state
that 100,000 people will move to Arizona this year, which is
great news. I mean, we want more people to come and participate
and live in our great state. Many of them are seniors. We have
a growing senior population, 17 percent right now. It will grow
to 21 percent by 2050.
As you are seeing and partnering with the Federal
Government, are you seeing that they are kind of getting out in
front of the demographic shifts and are going to make sure the
resources are there for the communities that are growing senior
communities? And how is that partnership going?
Mr. Schmidt. Senator, respectfully, I hope that not too
many of those 100,000 were Kansans before they became
Arizonans. Obviously, the demographic dynamics are different in
different states, and to your point, you know, I certainly
cannot speak from a global perspective. I can tell you our
experience from a Kansas perspective, and that is that the
federal agencies have on the whole been receptive and open.
They have wanted to be helpful. They have done the right things
when asked--sometimes not expeditiously, but they have done the
right things when asked.
At the end of the day, the vast, vast majority of this
subject matter, to the extent it is dealt with by the law
enforcement community, must be dealt with by state and local
authorities, because the nature of the crimes are state and
local crimes, and the vast--it does not matter how many federal
resources you put in. Ultimately, there are going to be more
state and local bodies than there are federal bodies, and that
is particularly true the more rural you get, because the
federal agencies tend to be housed in the more populous cities
in, I think, every state, and certainly in ours.
The answer to your question is, I think, yes, there is a
receptivity and an openness and a willingness, but there is
also an inherent understanding of the limits on the Federal
Government's role. Where we maybe have some room for growth is
on building some of those partnerships where it is not just
that we do more through the Federal Government. It is that the
Federal Government helps us do more through the state and local
authorities.
Senator McSally. Great. A last quick question. You
mentioned one piece of legislation in the House to remove a
barrier. Are there any other legislative barriers that you see
that we could address?
Mr. Schmidt. Well, I will bet there are, but that is the
one, that is the only one I will bring to your attention
because it is the one I am conversant in and focused on. I
really think it is kind of a no-brainer, but maybe I am wrong
on that.
Senator McSally. Ms. Kozlowski, do you know of any other
federal barriers to improving in this area?
Ms. Kozlowski. I do not.
Senator McSally. Great. Thank you. I yield back.
The Chairman. Thank you.
Senator Rosen, welcome.
Senator Rosen. Thank you, and I thank Senator Collins and
Senator Casey and, of course, the panelists for sharing these
personal and heartbreaking stories. It is really important that
we bring them to light.
I met with my Nevada Legal Aid just last week, and, of
course, in Nevada we have a large senior population that could
be a target, and we know that fraud against seniors is on the
rise.
I left my job to be a caregiver for both my parents and in-
laws. That experience taught me all too well about how
vulnerable our seniors are. My own father-in-law was contacted
one day by a big-box retailer to come pick up his purchase for
$5,000 worth of computer equipment. The fraudster was not so
smart and realized my father-in-law had a rewards account when
they tried to use my father's name, so instead they used the
phone number from the account, and my father went down to this
big-box store, and was able to cancel the fraudulent charge. We
determined that the fraudulent charge was probably made by
someone who skimmed information from my father's doctor's
office.
I know we have talked about reaching out, and educating,
but how do we do this: public service announcements,
television, digital, mail? But how do we stop the fraud? We
talk about the banks, the employees noticing things. How do we
educate people, big-box retailers and our doctors' offices so
that the employees know that they should be careful when
handling sensitive personal information, such as the
information used in my own father-in-law's case to perpetrate
fraud against his identity?
Ms. Flavin. If I may, I found that when my father went to
speak to the banker afterwards and the banker had a lack of
knowledge about laws that were already on the books that would
have allowed him to have that conversation with my father. I
think at the core of it, though, is that we are the village
that needs to protect the elders, and even if that law was not
in place, I am kind of shocked that nobody said anything to my
dad about, ``This just seems kind of off. Let us help you. Is
there somebody else that we could contact for you to confirm
that all of this is truly going on?''
My father was told at the beginning of all of this that
there was a gag order. His lack of knowledge about how the
criminal justice system works certainly worked against him.
Senator Rosen. Do you think it would be helpful to expand
the reach of people who are able to talk to our seniors from
banks to our retailers perhaps, especially our doctors'
offices?
Ms. Flavin. Absolutely.
Ms. Simeoni. I believe we need to humanize this a little
bit more. We talk about education, and education sometimes is
in forms of lectures, but I think it is more effective when it
comes in the form of stories, you know, reaching out, touching
the heart. These are real-life stories, for me real Mainers
being victims. I think it kind of puts you in part of--we call
it the ``big puzzle.'' You are a piece of the puzzle now. You
understand this. You feel it. You have the heart. Now let us do
something about it.
I think lectures are good, do not get me wrong, but I think
humanizing it, you know, telling a story, is really more
effective, whether it is the UPS worker or law enforcement
officers.
Senator Rosen. Right.
Ms. Kozlowski. I always think about this in terms of who
touches the life of an older adult.
Senator Rosen. That is what I am----
Ms. Kozlowski. I, too, left work to take care of my parents
when they were in their nineties. My dad just turned 98 on
Saturday. I always think about that. Who else? Who are we
missing? Who is not here?
Senator Rosen. The Postal Service.
Ms. Kozlowski. The Postal Service is phenomenal, and letter
carriers report all the time.
Senator Rosen. All the time.
Ms. Kozlowski. I cannot sing their praises high enough, but
who else? I mean, we have got EMTs who are now beginning to be
trained. We have--doctors' offices are a wonderful venue
because so much information is available there, so much
information to be used in a not very good way for older adults.
Senator Rosen. Right.
Ms. Kozlowski. Also, it is also a place where older adults
go.
Senator Rosen. A lot.
Ms. Kozlowski. They talk to their doctor. Maybe they do not
talk to the doctor because the doctor has the golden
stethoscope, but they might talk to the nurse. You might learn
something that would be important in that person's life.
There have also been initiatives in faith communities
because older adults generally still go to church or some form
of worship. There has been some training with clergy because it
is another place that touches the life of an older adult, and I
think as we look at training and we talk about a larger
conversation, we always have to keep those ideas in mind. I
certainly did with my parents and continue to now.
Senator Rosen. Thank you. I appreciate that.
Thank you.
The Chairman. Thank you.
Senator Braun, welcome.
Senator Braun. Thank you. It is good to be on the
Committee. Not only this subject, but the cost of health care
and other things are very important. I heard Senator Casey
mention, as I stepped back in, about getting bank employees and
others to kind of be a heads-up.
I look at the different ways that these scams are so
unbelievably complex and creative and ingenious, but you really
do not perpetrate it until the money transfers, and when I look
at an electronic wire transfer or certified check, that is, you
know, kind of something that is complicated even when you want
to do it. When it comes to credit cards and debit cards and so
forth, it seems like that might be an easier way to, you know,
consummate the scam.
What are you finding among banks, number one, especially as
it would apply to wire transfers, which is you have got to go
through a protocol that is fairly complicated to do one even
when I would initiate one myself? And it seems like that is
where you would get larger amounts. Tell me something, whoever
would have the information, where are you seeing banks when it
comes to their helping prevent this at the final stage?
Ms. Kozlowski. I can address that briefly. There are some
really robust, ongoing training programs right now. There is
one that will be rolling out I think this year from AARP called
``BankSafe'' that will be available to banks to even download
from the AARP Web site, the BankSafe Web site. That I think
will help, you know, transform training for tellers and
supervisors, but when I think about this issue, I always think
about the supervisors. I think about that with regard to
securities transactions as well. It is great to train the front
line, but that supervisor better be involved, too, and have
some accountability for whatever else happens. I know that
there is also bank training that has been rolled out by the
American Bankers Association as well.
I think that there are--the red flags are also something
that should be on the desk of everyone who works in a financial
institution--however we want to formulate them on elder abuse
and financial exploitation, but as soon as that happens, that
wire transfer becomes infinitely more difficult to execute.
Senator Braun. I am thinking more along the lines of an
algorithm or a mechanical system that would not rely on
training, you know, where that final moment there is something
that, you know, sets off a red flag to where you cannot, you
know, consummate the whole transaction.
Ms. Kozlowski. I know that there has been some serious
interest in looking at this. My personal view has always been
if we can stop credit card transactions, we must be able to
stop money leaving older adults' accounts. We can do it in any
number of ways, and I have talked to many people about that. It
is a big project, to be sure, but I still think there is a
technological solution to that.
There is a small company called ``EverSafe'' that has a
series of alerts which can alert you or family members if there
is some unusual transaction that has occurred across all kinds
of financial accounts.
I think the technology is there. I think we have to figure
out what would be the best public and private partnerships to
have for it to go forward, but I certainly believe it is there.
Senator Braun. One final question. When it comes to credit
card companies, they have got a more robust fraud detection
component to their business. Are they catching most of these
when they do occur through a--is there any type of statistic or
any information on how much is actually thwarted or prevented?
Ms. Kozlowski. Not to my knowledge, sir.
Senator Braun. Okay. Thank you.
The Chairman. Thank you.
Senator Jones?
Senator Jones. Thank you, Chairman Collins, and thank you
for having this hearing, you and Ranking Member Casey, and I
also want to lend my welcome to all the new members. You know,
Chairman Collins, looking around, this Aging Committee may have
the youngest Senators here in terms of seniority.
You know, we have got a number of former prosecutors that
are on this Committee, and so I have been especially interested
in listening to the federal and state partnerships. We have got
state prosecutors. We have got federal prosecutors, and I think
all of us have found that that has been a tremendous advantage
in our respective offices.
I would like to talk a little bit, and, Officer Simeoni,
you mentioned a little more help from the Federal Government.
Attorney General Schmidt, you have mentioned the collaborative
effort with HHS, and by the way, you and I might want to do
some comparative DNA based on your conversations about your
mother and hanging up. We may be long-lost siblings, so I get
that. I understand and I have witnessed that firsthand, but
could you initially talk a little bit about your federal and
state partnership and how you think that can be improved,
encouraged, what we can do from here? Then maybe, Officer
Simeoni or Ms. Kozlowski, if you have any suggestions of what
Congress can do, because those partnerships are incredibly
informative, and while most of these cases may be state cases
because of the individual amounts, there is still a lot of
federal jurisdiction with wire fraud, mail fraud, those kind of
things.
I will just let you all take it from there.
Mr. Schmidt. Senator, thank you, and I would be happy to
share a little bit on that. I have been in office--I have been
there eight years now. I had been in office maybe two or three
years. I was relatively new, and I was approached by a fairly
young man who was a federal employee, worked with HHS OIG. He
had recently been transferred at that point into the Kansas
City regional office. He had been I think in Illinois before,
and I do not know where he is now. He is no longer in Kansas
City, and we have lost touch, but he looked me up, and he said,
``Here is the deal.'' He said, ``When I was in Illinois, we got
frustrated that we would find''--``we would be out
investigating whatever it is we investigated at HHS OIG, and we
would come across these cases of home health care fraud in the
Medicaid program, usually billing for services just not
provided, billing for hours that the PCA did not show up, so
not close calls, but sometimes we would find''--``for big
losses, no problem, we will get them prosecuted, but sometimes
it would be a thousand bucks, two thousand bucks, three
thousand bucks, and we just could not get the attention of the
U.S. Attorney's Office, not because they did not want to, but
because they are up to the eyeballs in everything else.''
He said, ``We have done the work. We have got the case. I
cannot get anyone to prosecute it.'' In that case, they could
not get the local DAs to prosecute it because it is the
Medicaid program, and it just--you know, so they wound up
partnering, he told me, in Illinois for a sweep, and he
proposed we do the same in Kansas, and I said yes, so here is
what we did. My only condition was--I would be thrilled to
partner with you and do those cases. I do not care how small
they are; we will do them. My only condition is I want to do
them in state court under state law. I do not want to have to
retrain my people. I do not want to have to march into federal
court for a $1,000 case in state court. It is just easier. We
are accustomed to it. He said, ``Deal.'' They worked up--we did
this sweep. HHS OIG out of Kansas City, agents worked up--I
think it was around a dozen, give or take, home health fraud
cases. We called it ``Operation No Show.'' The fun part of any
law enforcement operation is naming it, right? These were all
people that billed for services they just did not show up to
provide. They were pretty straightforward. We presented them as
Medicaid fraud criminal cases under the state Medicaid fraud
statute, and we prosecuted them all in state court, and we won
them all but one. One did not go as well, but the rest of them
went very well, and it was a fantastic partnership. We were
thrilled because we were able to do more cases. I had
prosecution capacity. My bottleneck was on the investigation
side. He was thrilled because his agents who had done work were
able to finish it off and see it through, and it was the right
outcome for everybody.
We have not replicated that since he left on the Medicaid
fraud side, but it is just--I have thought of that ever since
and thought that is an ideal model, I think, in other areas, so
you know, I have mentioned it a time or two. I had this
discussion with then Attorney General Sessions at the news
conference you mentioned when we announced the sweep a year or
two ago. I forget exactly when it was. He seemed intrigued, but
obviously he is no longer around to follow through. I had the
discussion with Mr. Cottrell, the Postal Inspector. He is no
longer around. I had it last week with Mr. Barksdale, I think
the interim or deputy or acting Postal Inspector. He is
intrigued. I plan to call him and follow-up. This was a good
model.
Senator Jones. It works.
Mr. Schmidt. It works.
Senator Jones. Anybody else want to briefly, before--you
know, what specifically we might in federal court do?
Ms. Simeoni. Yes, so sure, real quick. When I started my
career, we played what was called ``Pass the Case.'' We are
bound by jurisdictions, so municipal officers generally take
cases in their municipal bounds. If it crosses the federal
threshold, we would just pass the case. Now we actually work
together. I work often with the U.S. Postal Investigators, some
FBI agents, and we work together on these cases, so I have
already seen a really good change. I think we are moving in the
right direction. I do not think we have to make huge, drastic
changes. I think if we focus on the multidisciplinary approach,
we continue to work together as a team, I think we are going to
be very, very successful.
Senator Jones. All right.
Ms. Kozlowski. I agree, and I would like to underscore what
Attorney General Schmidt said. I am a big believer in using the
regional offices of the Federal Government to be enfolded in
this work. We have regional offices all over the country.
Oftentimes we only look at the federal office that is located
in Washington to do these cases. I think there are lots of good
people that work in those regional offices that bring to these
cases a regional aspect, and I think that we could incorporate
them more in this work with the state work and similar kinds.
Senator Jones. Thank you.
Madam Chairman, one quick observation, because we have
talked a lot and I have heard a lot today, too, about outreach
and community outreach, and the one thing I would encourage, as
we have discussed, the population is getting older, more people
are turning age 65 every day, and so that outreach needs to be
done early for people down the road, whether it is financial
literacy or being aware. We cannot do a lot about the cognitive
decline that we see in our elders, but we can at least maybe,
as those hit age 65, arm them with better information going
forward.
Thank you all for being here and for the work you do.
The Chairman. Thank you.
Senator Scott, welcome to the Committee.
Senator Rick Scott. Thank you. First off, it is great to be
here. Thank you for the opportunity, and thank you for your
hard work. I look forward to looking at the bill you proposed.
Florida is a state with a lot of seniors, and we are
getting more every year. When Senator McSally was here, I was
going to remind her that Florida will add about 400,000 people
this year, and a lot of them are going to be seniors. It is a
great place to retire and enjoy life.
First off, Ms. Flavin, my heart goes out to you for what
happened to your family. Unfortunately, you hear stories like
that all across the country. We hear a lot in Florida. We have
been blessed--in my years as governor, I had an attorney
general that was very focused on this. Attorney General Bondi
was very aggressive at prosecuting scam artists, and we were
able to get a lot of legislation passed, and I know she worked
with you, Attorney General Schmidt.
All of you, it looks like you have done a great job trying
to do this. What is the best way to find best practices and
share them at all different levels, whether it is the federal
level, the state level, or at the local level, so we can make
sure we are finding the best ideas and getting them around the
country, so we can put a stop to this. Everything we can to
stop this.
Mr. Schmidt. Senator, I will take a crack at that. I do not
know if it is the best way, but we have struggled with that
question on our watch, and I will tell you where we have come
down.
One of the challenges on the education, the dissemination
of information, whatever tool, method, target audience you use,
one of the challenges is everybody agrees that it is a good
idea and, therefore, everybody wants to do it, and there is
nothing wrong with that. I am not trying to discourage it on
the whole, but sometimes the messages become either conflicting
or, even if they are harmonious, if you are the victim of one
of these scams or rip-offs and you are trying to figure out
what to do, you do not want to sit there and sort through a
stack of possible people to contact and ask for help. That
becomes intimidating and distressing in and of itself.
One of the things we have done in Kansas--and I do not
claim credit for it--we stole the idea, shamelessly, from
Arkansas. The former attorney general of Arkansas had started
it up. They actually paid a market research firm several years
back, before I was in office, to figure out in Arkansas why
they were getting fewer requests for assistance at their
attorney general's Consumer Protection Division than the
demographics and size of the state would suggest they should be
receiving, and the answer came back, perhaps not surprisingly,
because people, when they have been ripped off, do not want to
sit in their living room and practice law and they are
intimidated. The AG's Web site is talking about statutes and
duties and all this stuff. It looks governmental. They do not
know if it is a securities issue or insurance fraud or general
consumer fraud. Do I call the local police? Do I call 911? Do I
call the FBI? Do I call the FTC? What do I do? People would
just throw their hands up and not ask for help, and so they
rebranded in Arkansas. I do not know if they are still doing
this or not. They just rebranded their Consumer Protection
Division at the AG's office. They called it ``Got Your Back
Arkansas.'' We stole that from them, but we had enough pride
not to just say, ``Got Your Back Kansas.'' So we are ``In Your
Corner Kansas,'' and ours is still going, and it has been
fantastic. It is a branded Web site. I use it on all of our
consumer protection and elder abuse outreach efforts around the
state, whether I am doing it or staff is. We use it in talking
with other agencies in the state: Come along and be part of the
In Your Corner Kansas conversation, and the message is simple:
If you have been ripped off and you are victimized, contact us.
We are in your corner, Kansas, and we will either help you or
we will get you to the people who can. Let us practice law or
navigate the bureaucracy.
To back that up, to your question, we also have what we
call now a ``Senior Consumer Protection Advisory Council.'' I
am about to overhaul it and make it more of a broader Elder
Justice Advisory Council. We have quarterbacked it at the AG's
office. We invited in the players, and we are sitting down now
and saying, all right, we have got this Web site, we have got
this branding, we have got this one-stop outreach. Everybody
needs to be on the same page. What do we need on there? What do
we need to know for your agency, for your private entity? How
do we get people properly connected? What is the right subject
matter? What is the right content? And so far it is working I
think reasonably well, and we have seen our numbers go up in
requests for assistance, which I think is a good thing.
Senator Rick Scott. Anybody else?
Ms. Simeoni. I think when delivering a message, it really
has to be unique to the area, so what may work in the State of
Maine may not work in a different state, so I think it just
needs to be a vessel of people, a multidisciplinary team who
understands the geographic area of the message that needs to be
delivered, and that does not only mean elders. It means
professionals, so what I mean by that is peer lectures or peer
stories.
I know for me in the law enforcement community, I am more
receptive to other law enforcement officers educating me, and
so also with elders, I know me going to speak to an elder, we
may not have a lot of similarities, but if I could bring
somebody along who may be of the same age, they may reach that
message a little bit better than I could.
I think it has to be unique, and I think people need to
really study and have passion for their specific areas and
deliver the message that they think would be well received in
that particular area, so I think it is all different.
Senator Rick Scott. Thank you.
The Chairman. Thank you very much.
Senator Sinema, welcome to the Committee.
Senator Sinema. Thank you so much, Chairman Collins and
Ranking Member Casey. It is an honor to be a member of the
Special Committee on Aging, and Chairman Collins, in
particular, it is a pleasure to continue doing the work that we
have been doing together to protect seniors from financial
fraud. I was proud last year to lead the Senior$afe Act in the
House, and I am so grateful for your effort to lead that
bipartisan effort through the Senate. I also want to thank
Ranking Member Casey for his support of that very important
law.
As we have heard today, criminals are relentless in
targeting vulnerable senior citizens, and that is why the
Senior$afe Act which we passed last year is so critical. It
empowers people in financial institutions to report those exact
suspected instances of elder financial abuse and fraud, and it
helps law enforcement track down the criminals who target those
vulnerable seniors.
The law was modeled after a highly successful effort, of
course, in Maine, the Senior$afe Program, that innovatively
brought together the regulators, financial firms, and legal
organizations, so we did the same in Arizona, bringing together
IRS experts and advocates to help teach seniors in the greater
Phoenix community how to recognize and report frauds and scams,
scams like one that targeted a 91-year-old woman in Tucson.
This woman had two caregivers that she trusted, but they
exploited her. They got access to her banking information, and
they stole her identity. They stole nearly $200,000 from this
91-year-old woman by obtaining credit cards in her name. They
gave themselves very large holiday bonuses, and they even
convinced her to sell her home, and had the employees at her
bank been trained to recognize the pattern of suspicious
charges and been able to report that to authorities, we believe
the criminals probably would not have been able to victimize
this woman for two years.
We know that financial crime is a growing crisis in our
country, and it certainly is a crisis in Arizona, which
welcomes retirees from across the United States.
Just in 2018 alone, the Arizona Department of Economic
Security received over 31,000 reports of potential abuse or
fraud involving senior citizens. As we know, that represents
probably only a fraction of the crimes that occurred, and that
is completely unacceptable, so these are people who have worked
hard their entire lives, they have raised their families, many
of them have served our country in the military, and they
should get to enjoy their golden years with dignity.
According to the AARP, one in five Arizona seniors are
victimized by financial fraud every single year, and as we have
heard today, often the seniors are afraid or perhaps
embarrassed to report when they have been defrauded. Sometimes
they may not even be aware or do not want to recognize that
they have been victimized.
What I would like to do is start with my first question for
Ms. Kozlowski. Your testimony mentioned that the financial
services and tech industries have been strong partners in the
fight against elder financial exploitation, so building on the
passage of our law last year, the Senior$afe Act, where are
there current gaps in prevention, detection, and enforcement
actions to address financial fraud that are disguised as
legitimate transactions?
Ms. Kozlowski. I think there are--having done this work for
so long, I am always encouraged, surprised, and disappointed at
the enthusiasm for entrepreneurship of the people who want to
take other people's money, so I do not know that I could give
you a particular area because I think what has happened is that
by bringing together so many people in the--especially the
broker-dealer community, investment adviser community, I think
that there has been such heightened awareness in that
particular sector that I do not think that unusual scams coming
to a particular account are not going to be noticed.
If you are a person who has invested in a particular way
over a long period of time and suddenly you are coming to your
adviser or your broker and saying, ``No, no, I really want to
buy those individual airplanes that fly at 50 feet above
because I am sick and tired of the bad traffic,'' the
investment adviser is going to say, like, ``No, we are not
going to be doing that.'' They have new tools. They have a
trusted contact to say, ``Is there something wrong with Uncle
Fred? Has something changed? Do we need to address this
further? Or we can just stop that transaction until we find out
what on earth is going on.'' That has been huge, absolutely
huge.
I think that we also see that just having investment
advisers be required to meet with their clients once a year is
also something, and bringing in that trusted contact, not just
for older Americans and older adults, but for anybody. I always
use in my discussions the car accident. You know, you are in a
car--that does not discriminate on age. That could happen to
anybody at any moment. You should be prepared for that.
In banking, I think that there are gaps in training. There
are always going to be the people that did not get that
particular web training. I think there is such movement,
particularly, and cooperation in financial services. There are
going to be transactions by type. I am sorry, I could not
describe that right now, but I see such a huge change, and
there is also a very effective business case to keep the asset
in the institution, and I think that that is being realized.
Senator Sinema. Thank you so much.
Thank you, Madam Chair.
The Chairman. Thank you. Last, but certainly not least, I
am very pleased to welcome Senator Hawley to the Committee.
Senator Hawley. Thank you very much, Madam Chair. Thank you
for your leadership on this Committee and on this set of
issues. Ranking Member Casey, thank you as well, and thanks to
all of the witnesses for being here today.
I come to this job new, of course, but what I was doing
just before this, as the chief law enforcement officer of my
state--nice to see you, Attorney General Schmidt, former
colleague. I was Attorney General of the State of Missouri, and
I can say, having read your testimony and listened to you
today, the problems that you are describing and have
encountered firsthand is one, I am sorry to say, that is not
unfamiliar to the State of Missouri where we see rampant
scamming, elder abuse and fraud. This past year, we recovered,
I think it was, $13 million in scams that we reversed and were
able to get restitution for, for consumers in the State of
Missouri, much of that dealing with seniors, dealing with
elders, so it is a rampant, rampant problem.
We try to be as aggressive as we can in the attorney
general's office and have had some success there, and I am
delighted to have read your testimony and heard from you today.
Thank you for what you are doing working on this serious
problem.
Ms. Flavin--am I saying that right, by the way?
Ms. Flavin. Flavin.
Senator Hawley. Flavin, yes. Can I just start with you just
to ask you to describe a little bit more about your family's
story? It strikes me that the people who victimized your
parents did something awful, and they made them feel that they
could not talk about a family crisis with their children, and
this emotional manipulation, can you just tell us, like what
was that like as a family? Why is this emotional manipulation
so effective sometimes, unfortunately, and also devastating as
a family?
Ms. Flavin. Very much so. When my father was--well, when my
parents were originally contacted, the phony lawyers kept
saying that they would only talk to my parents at the same
time, so they were able to convince and create this emotional
connection between both of them as opposed to trying to play
off one or the other.
At the start of this, my father was told that he was now
under a court gag order, so the only person he could discuss
this with was the phony attorney, and their lack of how the
criminal justice system works I think was a huge factor in this
scam being allowed to be perpetrated against them.
I was well aware of the grandparent scam, and I know if my
parents had called me and said, ``Hey, we got this phone call,
and I am really concerned about it, from this lawyer in
Tennessee about Michael Ryan.'' And I am going, ``No, do not
send them any money. It is a scam.'' I knew that. I was aware
of it because of an AARP article that they ran last year, and I
had even gone up to them when I went to visit in May, and I
said, ``Listen, if you ever get a phone call about my son and
he is in jail, it is OK to hang up and let him sit.'' I am not
winning any mother of the year award, but I would know that it
was a scam.
My father is acting under the impression that he has this
court gag order so he cannot tell anybody, and my whole
response when I first found out about it was actually through a
posting on Facebook that my nephew, the alleged DUI'er, posted
on there, I am, like, ``We are a family, and I do not care if
there is a gag order. No judge is going to put you in jail for
violating that type of gag order.'' You know, no reasonable
person. I said, ``We are a family, so not only do we get to
enjoy the benefits of going through all the good stuff; you get
to go through all the bad stuff, too, because that is what a
family is.''
As a result of this, speaking of family, there is a piece
of property that my parents have owned for four generations. My
grandfather purchased this lakefront property when my father
was about 15 years old. My father helped put up the little
shack that my grandfather made out of pallets or scavenged
wood. My parents bought it from them, I think, when I was 15 or
16, so my grandfather has used it. My father has used it. I
have used it. My son has used it. This property now has to be
sold to make up for that deficit. To me that is the killer,
that right there.
Senator Hawley. Yes. Thank you for being here today and for
being willing to share your family's story.
Ms. Flavin. Thank you for inviting me.
Senator Hawley. Thank you.
Attorney General Schmidt, just in the few moments that I
have remaining here, you have talked a bit about the Fraud and
Abuse Litigation Division that you started in Kansas. Would you
just say--talk to us a little bit about some of the lessons
learned from that, what you have found that has been
successful? You know, what are things that perhaps you did not
expect that you have found that have worked well? And what
might that say to other law enforcement agents at the local,
state, or federal level about tackling this problem?
Mr. Schmidt. Sure, Senator. As you well know, and the
Committee knows, every state is different in our structure for
criminal investigation and prosecution. Kansas is--and I think
the plurality or majority of states, but certainly not
everybody does it this way, but we are--I do not have original
criminal jurisdiction in most cases. There are a few
exceptions, Medicaid fraud and a couple of others, but
generally speaking, we are--a local DA, local county attorney,
they have got to ask us for help and invite us in, and that is
relevant to this discussion.
You know, we have limited resources like everybody else. We
looked at what we were being asked to help with, and we focused
our training capacity building on homicide, child sex crimes,
major drug crimes, cartel type stuff or big manufacturing
cases, and some public misconduct, corruption type cases that
are awkward to handle locally. That is our core. That is where
we put our primary resources.
We discovered over time we were being asked with great
frequency by county and district attorneys--mostly the county
attorneys in the small and mid-size jurisdictions because the
big jurisdictions tend to have sufficiently robust resources.
We were being asked to help with elder abuse cases, sometimes
physical or sexual abuse, but often financial abuse, usually
fiduciary or trusted individual abuse, but sometimes just
random scam stuff, and we were turning them down because we did
not have the resources. We were up to our eyeballs in all those
other violent crimes I mentioned, and we did not have to take
them because they are local, and that is the kind of stuff that
leaves you sleepless at night.
We finally figured out, after a lot of trial and error that
I will spare you unless you are just fascinated by it, it is
impossible, at least in Kansas, for me to put that type of
financial crimes, elder abuse crimes capacity in my regular
Criminal Division because I will always make the choice to take
the next homicide, not the next $20,000 elder abuse case. That
is the right choice, but it leaves you where you started, so e
had to spin it off. We broke it out, created a separate
Criminal Division dedicated only to financial crimes and elder
abuse of any sort, had to figure out how to pay for it, and for
us it was not an option at that point in time to just go ask
for new money, and I am not even sure that was the right thing.
We persuaded our legislature to overhaul our insurance
fraud statutes and our securities fraud statutes and an
existing statute on the abuse, neglect, and exploitation of
vulnerable populations, pool some money out of those that was
already in the system, and require that those cases all get
referred to us for prosecution, and my argument was the whole
is greater than the sum of the parts. A lot of fraud on elders
is insurance related or securities related anyway--not all of
it, but a lot, so there is a logic, and you give me that, I
will do those cases, and with the capacity that is left we will
do more run-of-the-mill elder abuse cases, and we are doing
them.
We have been doing this about two years now. We have gone
from zero capacity to, I think, I now have four prosecutors and
we are trying to add a fifth. I have three sworn officers; we
are trying to add another; and I have some other clerical
folks, and essentially, we view that unit, that division--it is
a criminal prosecution unit, first and foremost, but it is also
now the focal point in Kansas in the criminal justice system
for driving the conversation, best practices, sharing
experiences on the elder abuse side.
We are stealing ideas from Johnson County, Kansas City, and
from Wichita that have robust capacity, and we are trying to
push them out into the western part of the state and the
southeast where our help is more needed, and it has been a
very, very good conduit.
Senator Hawley. Thank you for your leadership.
Thank you, Madam Chair.
The Chairman. Thank you very much.
I want to thank all of the witnesses for being here today
and for doing an extraordinary job both on the front lines but
also in advancing our understanding of this problem.
Officer Simeoni mentioned that telling a story is often the
most effective way to connect with people, so in my closing
remarks, I want to tell a story.
Probably five or six years ago, I received an e-mail that
appeared to be from my nephew. It had the correct e-mail
address from him--it turned out his account had been hacked---
and it said, ``Dear Aunt Susan, I am abroad. I have been robbed
and mugged, and all of my money has been taken. My airline
ticket is gone, and I cannot get back to the United States.
Could you please wire me some money to the Western Union
office?''
I guess I am not as kind as Ms. Flavin's parents,
fortunately. I thought it was real. It sounded like him. It was
from his e-mail address. It sounded just like him. He called me
``Aunt Susan,'' and it was signed, ``Love, Mark.''
I sent back an e-mail that said, ``Mark, you should go to
the American embassy for help,'' rather than, fortunately,
wiring him money, because he had mentioned that his passport
was stolen as well, and then I started thinking about it. I got
a reply that said, ``Oh, Aunt Susan, I really need to get home.
I have been all beaten up,'' you know, really laying on a sad
story, and then I called his father, and I said, ``Do you
realize Mark is in trouble?'' It turned out Mark was at work
and was not overseas on vacation, was not in trouble at all.
I can see, because of my own experience, how easily you
could be drawn into the horrible situation that Ms. Flavin's
parents experienced, and because I was aware as a public
official that the American embassy truly was the right place
for him to go for help, I did not wire that money, and frankly,
I probably would have called his parents and told them to wire
the money, but it shows how clever these criminals are and how
relentless they are and how the ability to use the VOIP phone
system can make them target people from faraway call centers in
India, in other places, and the ability to use the Internet to
send e-mails, a common scam that we have seen seniors fall prey
to, is they will get an alert on their computer saying that it
has been infected with a virus and that if they just provide
their password and their other personal information, they will
fix it for $56. Well, of course, there is no virus. Not only
are they out the $56 but they have inadvertently given the con
artist access to their bank accounts and to other sensitive
information that they have on their computers.
This does require a coordinated approach to prevent seniors
from being swindled out of their life savings, and I am so
grateful for the work that all of you are doing. There are just
too many cases of this happening and causing not only financial
harm but embarrassment and shame, and our seniors should not be
subjected to that. It is just outrageously wrong.
I thank you all for what you are doing to combat these
fraudsters who often are part of international cartels and,
more tragically, in many cases are trusted ones known to the
seniors. Those are the hardest ones of all, when it is a family
member or a trusted guardian or other person, attorney,
financial adviser, even a pastor in York County, who rips off a
vulnerable senior, so we are determined to be just as
relentless as these con artists are in going after this
problem.
Finally, I want to respond to the attorney general's
comment about the robocalls and the harassment that so many
seniors are enduring. I really think that the
telecommunications companies have got to step up to the plate.
There is new technology that can be deployed, and we are going
to have a future hearing in which we bring them in to talk
about that technology. We are working with the FCC as well, and
they have taken some recent action this past fall, but way more
can be done to protect seniors so that they know where the call
is coming from, to crack down on the spoofing, to track the
call from its origination, the true origination, not what it
says. In one tragic case we had of a senior who was ripped off
in Portland, the call said the ``Portland Police Department''
on the Caller ID, and that is why the senior turned over money
for taxes that he did not owe.
We really need to use every tool that we have available,
and your being here today is so important in this fight, and I
am so grateful to each of and every one of you for being here.
Committee members--we had great attendance today--have
until Friday, January 25th, to submit additional questions for
the record, so you may find additional questions coming your
way. Please do not hesitate, if you have further suggestions
for us, to reach out to us. We are really always eager to hear
from you. Thank you so much for being here.
Senator Casey?
Senator Casey. Thank you, Chairman Collins, for having this
hearing. I want to thank our witnesses for their testimony. I
think it is true of all of us when we say that no one should
ever fear answering the telephone. Our loved ones should not
have to fear that a con artist might be lurking on the other
end of the receiver, and daughters like Erika should not have
to fear receiving a call from their parents that a lifetime of
savings has been lost to a thief.
The work of this Committee to bring together experts, law
enforcement officials, and representatives of the private
sector is a step in the right direction, but, of course, we
have to do more. That is why I am committed to ensuring that
the legislation that Senator Moran and I have becomes law, the
Stop Senior Scams Act, and to take other actions as well.
I will continue to work with Chairman Collins, as we have
worked together for the last number of years, and other
colleagues on this Committee and throughout the Senate to do
everything we can to stop these crimes.
Thank you, Madam Chair.
The Chairman. Thank you very much. I would note that
Senator Klobuchar and I also have a bill, and I hope we can
merge our bills and get it enacted into law during this
Congress.
Again, one final plug for our new Fraud Book. Shortly--
well, in a few weeks--we will have thousands of copies
available that we can distribute all over the country and in
the hopes of helping our seniors.
Thank you very much for your participation. This hearing is
now adjourned.
[Whereupon, at 11:31 a.m., the Committee was adjourned.]
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APPENDIX
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Prepared Witness Statements
=======================================================================
Prepared Statement of Erika Flavin, Daughter of
Couple Scammed by Grandparents Scam,
Willow Grove, Pennsylvania
I would like to take this opportunity to thank Ranking
Member Senator Casey and Madame Chairperson Senator Collins for
inviting me to speak regarding the recent scam that was
perpetrated on my parents. Before I start, I would just like to
give you a bit of background about my parents. My father,
Thomas Michael Flavin Jr. was born May 30, 1942 to Thomas
Michael Flavin Sr. and Thelma Elizabeth Flavin (nee Pharoah).
My grandparents were born around 1920 and were young children
when the Great Depression started, and my father was born about
six and a half months after Pearl Harbor. My grandfather spent
time on Okinawa after the worst of the fighting was over. My
grandmother, Tilly, to her friends and family, was a stay at
home mother who, along with my grandfather, (affectionately
known as Zeke to family and friends) raised five children. My
father was the oldest, in order after him, was a brother
Timothy, a set of twin sisters, Sally and Susan, and the baby
of the family, Joseph. Timothy and Joseph are deceased. By all
accounts, my father had a typical blue-collar upbringing in the
town he still resides in to this day.
My mother, Elfriede Erika Flavin (nee Glasner) was born
December 14, 1940 in Munich, Germany. My mother was one of
eight children born of Johanna and Karl Glasner. Her siblings
are (in order of birth) Kurt, Johanna, Inge, Lisa, Karl, and
twin brothers. Kurt, Karl, Lisa and her twin brothers are all
deceased. My mother doesn't talk much about what it was like
growing up in post WWII Germany but two stories she has shared
indicated a home that contained an abusive, alcoholic father
and serious poverty. Her father and her brother Karl committed
suicide. Needless to say, her upbringing and life was
difficult.
My father graduated high school in 1960 and joined the Army
shortly after. He was sent to Munich, Germany and met my mother
through his roommate who happened to be dating my aunt Lisa. My
mother gave birth to my older brother in 1962 and made her way
to America to join my father, all the while pregnant with me.
My sister would join our family in 1965.
My parents did a variety of jobs. My father worked as a
hospital orderly before he discovered that the sight of blood
made him queasy. He also worked as a machinist making snow
plows, a production worker in a brewery and last as an
administrative clerk for the local Army Reserve Center in town.
During this time, he was also a member of the Army Reserve.
My mother worked in a variety of light manufacturing jobs.
First making the old mercury thermometers, and then making
motors for small hand tools like drills and saws. After she
sustained a work-related injury, she was medically retired and
did substitute work as a teacher's aide working with special
needs children.
Growing up in our house was, what I would consider to be a
typical blue-collar upbringing. We always had a roof over our
heads, nutritious food, and clothing for all seasons. Our
family vacations were simple and most of our summers were spent
at my grandparent's cottage, which my parents purchased from
them years later.
I first found out about my parents being scammed through a
Facebook post from my nephew, who just happened to be ``the
grandson'' in this story.
In a nutshell my parents were contacted by someone claiming
to be a lawyer representing their grandson. Their grandson had
been involved in a DUI that resulted in an accident. He was
being held in a jail in Tennessee and according to this phony
lawyer, my nephew was begging my parents to post bail for him
so he could get out of jail. When my parents agreed to send the
money, the phony lawyer told them they were under a gag order
and could not share this information with anyone. When all was
said and done, over the course of three phone calls, my parents
sent the phony lawyer money for bail and to pay for damages
that their grandson had allegedly caused. My parents withdrew
cash each time and sent it to one address in Upper Darby, PA
and two addresses in New York City. When my parents were
contacted a fourth time for money, for a retainer, they told
the phony lawyer that there was no more money to give and that
he would have to contact my nephew's parents to arrange for
money for a retainer. That was the last they heard from him.
When they did not get the money back that they had put up for
their grandson's bail, they contacted my sister. She quickly
called her son and put him and my parents in a three way
conversation. Their grandson was exactly where he was supposed
to be, studying at his college in Buffalo. It was then that my
parents knew they had been scammed.
My parents contacted local law enforcement to file a police
report, but they knew that there was no way that they were
getting back any of their money.
I would like to tell you now about how this crime has
affected my family. Financially, my parents are now out
$80,544. This was the majority of my father's Thrift Saving
Plan. This was money that was supposed to be used to help with
those necessary life expenses one incurs as they age. For
example, hiring someone to come and help them open up the
cottage annually, home and vehicle repairs, etc. Between their
social security and pension, their day to day living expenses
are covered. I'm grateful that they did not take out any loans
or second mortgages on their home to pay for the money they
sent.
Even sadder still, there is nothing to protect them or
anyone from these emotional transactions. As long as they have
the collateral and a good credit rating, there is nothing
stopping a bank from underwriting these types of loans that
could potentially imperil their financial safety. My father had
to sign a document at his bank stating that he was making this
withdrawal under his own power and wasn't being coerced in any
way. My father also spoke to the banker afterwards and the
banker admitted that he thought something was going on, but he
was not allowed to say anything. I disagree vehemently.
While the banker does not have the right to stop my father
from taking out his money, I fail to see how a bank
representative going up to someone and stating ``We see that
you have made some very large cash withdrawals and we are
concerned. We would like to take a few minutes to share with
you some information about scams that are targeting the senior
population''. I'm pretty sure that had that happened in my
parent's case, my parents would have thought twice about what
they were doing.
The emotional wreckage that this whole thing provoked is,
to me, far worse. My mother is in a constant state of anxiety
and feels that she is a bad grandmother because she failed to
recognize that the voice on the other end of the phone was not
her grandson but some imposter who was telling them the change
in his voice was due to his broken nose from the accident. My
father has flashbacks to a time when his younger brother was
arrested, and his parents put up their house for bail and had
to pay a lawyer $20-30K to defend him. I can't imagine that was
easy money to come by in the early 1960's for a blue-collar
family. Both feel utterly humiliated and embarrassed about
being taken advantage of like this. The local news station did
a short piece about them and they did not want to appear on
camera but gave a telephone interview. Even though they are
embarrassed and humiliated, they felt that getting this
information out there was even more important. I am here
because they felt that this story was one that needed to be
told in order to create protections for seniors who are
targeted by these scams.
I cannot speak as to what exactly went through the minds of
us three kids, but I can say that we were all very sad that our
parents had to go through this all alone. Remember, they were
told that they were under a gag order and they believed it.
Their grandson asked them not to tell his mother (their
youngest daughter) and they wanted to respect his wishes. I
also understand that many people in my parents' generation do
not understand the evil that can be wrought via the Internet
and social media. In my parent's case, it never occurred to
them that the person on the other end of the phone was not who
they claimed to be. I was visiting them when the local
detective stopped by to take their statement. I overheard my
parents explaining what happened and it was all I could do to
not scream, ``NO, it doesn't happen like that.'' It breaks my
heart that the faith and trust that my parents placed in people
was taken advantage of in such a despicable manner. My father,
as a hobby, writes fan fiction based on his interest in space
travel. He's a pretty good writer but this incident has really
traumatized him emotionally. I am attaching his written
testimony at the end of this document, typos and all, to show
just how much this affected him.
In closing, I would again like to thank Senator Casey for
inviting me to tell this story and my parents for giving me
permission to share their story in the hope that it can help
someone else.
Prepared Statement of Candice Simeoni,
President and Founder of York County Elder
Abuse Task Force, and Law Enforcement Officer
at the Kennebunk Police Department
Chairman Collins, Ranking Member Casey, and Members of the
Committee: I am humbled and honored to be here before you
today. Thank you for the opportunity and for your commitment to
protecting older Americas. I am the founder and president of
the York County Elder Abuse Task Force in Maine. I am also a
law enforcement officer at the Kennebunk Police Department.
I hear heartbreaking stories like Ms. Flavin's parents all
the time. In fact, last year I worked on well over 70 elder
justice related cases alone ranging from unsuccessful scams to
the theft of an entire widowed elders life savings. These cases
were across the State of Maine.
I am the founder and president of the York County Elder
Abuse Task Force in Maine. I am also a law enforcement officer
at the Kennebunk Police Department.
Over my law enforcement career, I have had the opportunity
to complete extensive training in the field of Elder Abuse,
Domestic Violence and Victim Assistance. I am proud to have
been part of numerous advances in combating Elder Abuse over
the past 15 years.
By working on criminal matters and spending time with
victims, I have established successful community policing
approaches in defense of the ever increasing crimes against our
elders. My work has been featured on nationally recognized
media productions. I sat on the board that guided the nation's
first transitional housing facility for victims of elder abuse;
Martha's Cottage. I am proud to lead the many successes
generated from the York County Elder Abuse Task Force. I have a
true passion for being the voice for our vulnerable
populations: primarily our elderly and those with disabilities.
I have researched and worked proactively in the fight against
elder exploitation, speaking nationally about my proactive
approaches with challenging elder abuse topics in today's
society. Much of my national presentations are based on
encouraging the initiation of multidisciplinary teams. I have
worked on the front line investigating elder exploitation cases
for much of my career; I have seen the eyes of the victims,
felt the pain in their words and have carried with me the
frustration of my limitation to help.
I started the York County Elder Abuse Task Force in 2005.
Once I realize that a multidisciplinary approach was so vital
to protect our elders, I knew I had to make it happen. My very
first cases were incredibly difficult and I had so many
questions. Within my profession, I could not find the answers,
so I started visiting others who I thought could help me with
the victims in my elder exploitation cases. The majority did
not understand what Elder Abuse even was. It became a goal of
mine to educate not only myself but as many others as possible.
In doing so I built credibility, sparked some passion in others
and developed an incredibly solid task force with a group of
professionals I could count on when I needed help. I realized
that the initial goal for these cases should not be
prosecution; yet about preventing further victimization as much
as possible and then looking to build a potential case.
The York County Elder Abuse Task Force is a group of
committed professionals from many fields, including but not
limited to law enforcement, social services, legal services,
government employees and financial institutions. We come
together to share our knowledge and skills, to serve as a
resource to educate the public about elder abuse, and
ultimately eliminate it as a problem in York County, Maine. We
have developed an unbreakable bond and sense of respect for
each of our differing professions. We rely on each other to
remedy our cases as affectively as we can and count on our
skills to be an asset to victims and witnesses alike. The
county of York is our primary focus but making an impact
nationally is our goal.
We as a task force have been able to be a part of and
developed many innovative and nationally recognized activities
surrounding our elders. I have found that talking directly
about elder abuse is not a well received topic and so I strive
to find indirect ways to approach the topic.
With this in mind we have developed initiatives to include
the ``Wishing Well''. This is a project which grants our local
elders a wish of their lifetime. President George W. Bush, Sr.
was instrumental in the success of one of our recipients:
Project 41. At the time of the nomination: Maine's oldest
resident, Millie Remmie 106, dreamed of meeting the former
president for as long as she could remember. Together, with
collaborative efforts from various people and organizations, we
made that dream a reality. One of the most important goals in
the fight to eradicate the exploitation of our elders is for
professionals and community members to grow a keen
understanding of each other and expand our resource pool to
reach a common goal. We find innovative ways to do so. This is
an example of an indirect effort with the focus on our elders'
best interest to build credibility, trust and hope.
I believe reaching as many facets of our community is vital
in advancing ahead of the exploitation of our elders. One way
we have learned to reach our younger generation is by
sponsoring a scholarship for graduating seniors. The project is
based on a winning essay involving a theme of elder abuse. This
idea has now been used statewide.
The most important goal for my task force is education. We
vow to educate ourselves as much as we are able so that we can
be an asset to others. The group conducts mobile awareness
discussions and presentations throughout the county and state.
We coordinate ``Senior Safety Road Shows'' where we give 30
minute talks on current scams in their particular area. We
encourage local law enforcement and town/general assistance
representatives to attend with us as we meet residents of their
community. Also along the education goal, we have produced a
training video for agencies to use in our absence. The video is
of an abused elder who tells her story. While she is talking,
what she is really thinking/feeling is written on the screen.
This piece shows the complexity of these cases and reveals the
unspoken real story of one elder's journey.
We host a very successful annual conference focused on the
importance of multidisciplinary approaches to elder abuse. We
started this event 11 years ago. This, to us, is an example of
building credibility and exemplifying the multidisciplinary
approach mindset. At this year's annual conference we were
pleased to be joined by the newly appointed Elder Justice
Coordinator at the US Department of Justice and we distributed
copies of this Committee's Fraud Book to the more than 100
attendees.
One last note about education effort is that I instruct the
Elder Abuse segment at the Maine Criminal Justice Academy for
all cadets that become law enforcement officers in the State of
Maine.
I recognized the need for a specialized focus for our elder
population the first year I became a law enforcement officer.
While dealing with a personal case involving my grandfather, I
also recognized the vulnerability of the community I worked in.
The York County coastline is inundated with retirees and many
elders living alone.
As a matter of fact, according to 2017 US Census data, the
State of Maine is still the oldest state in our Nation. The
population of Maine over the age of 65 is nearly 20 percent. In
Kennebunk, that same population is over 35 percent. With this
knowledge, it is our duty to act. We have an obligation to do
what we can.
As people live longer, they also face more problems with
chronic illness and disabilities. One in four elderly persons
live alone and are among the most vulnerable and impoverished
groups in Maine. Although many are considered asset rich, they
are liquid money poor and are easy victims of scams promising
the receipt of large incomes.
The change in the composition of our population since I
started my career and the steep number of our elder population
has had and will continue to have important implications for
our law enforcement community. The number of elderly victims
entering the criminal justice system can be expected to
increase significantly. We are already falling well behind.
Traditionally, law enforcement has dealt with crime
committed by and against a younger population. This population
shift and the increase in crime targeted specifically against
older persons, requires the development of specialized services
to address elderly victims of crime.
Based on statistics gathered by the National Center on
Elder Abuse, it is estimated that for each case of elder abuse,
neglect, exploitation, or self-neglect reported to authorities,
about five more go unreported. That doesn't even include the
highest incidence of elder abuse which is financial
exploitation.
Current estimates put the overall reporting of financial
exploitation at only 1 in 25 cases, suggesting that there may
be at least 5 million financial abuse victims each year. Elder
abuse has no boundaries.
There are an estimated 5 million victims of elder abuse
each year in our Nation; 12,000 of those are believed to be
Maine seniors, who are abused often at the hand of their loved
ones, the people they trust most in the world. This is a
serious underestimate of the problem. As a matter of fact, it
is estimated that 84 percent of all elder abuse cases go
unreported.
The U.S. Department of Justice publication ``The Elder
Justice Roadmap'' (Connolly, M.T., Brandl, B., & Breckman, R.
(2014)) states that experts have reported that knowledge about
elder abuse lags as much as two decades behind the fields of
child abuse and domestic violence. The need for more research
is urgent and it is an area that calls out for a coordinated,
systematic approach that includes policy makers, researchers
and funders.
In that same publication, it is suggested that financial
exploitation causes large economic losses for businesses,
families, elders, and government programs. It also increases
reliance on federal health care programs such as Medicaid.
Fraud through the mail is fascinating to me, and not in a
good way. One piece to the multidisciplinary approach for me
has been my work with the US Postal Investigators. I have
learned a great deal from them. Seeing international scammers
make our domestic elders unknowing vessels of fraud is
heartbreaking! Innocent U.S. elders losing everything and
taking other unsuspected victims along with them is
devastating.
The underreporting is astounding and is immense. The main
reason is because victims are often afraid of retaliation; they
feel dependent upon the abuser or have grown an admiration of
them. I am working on current cases where elders fall victim to
the ``new best friend'', sometimes they have never even met
them. They are ``friends'' that they have developed over the
phone or through the mail. People in positions of power can be
very convincing and capitalize on elder's vulnerabilities. A
good example of this is the Maine pastor who is pending trial
for exploiting a dependant elder. Through investigating this
case and all the others, I gain motivation to do what I can to
expose this epidemic even more, to spread more awareness and
education. If these victims knew more about Elder Abuse prior
to falling victim, could we have saved them from this abuse?
At the end of life, at a time when elders should be
receiving gratitude and support for the contributions they have
made to their families and their communities, the typical
victim ofelder abuse is suffering alone, afraid to disclose the
shame and disgrace of the abuse and fearful that speaking out
will cause an even worse consequence. Four in five abusers are
family members. Most are substance abusers. Many snap under the
stress of care giving. Whatever the reason, whatever the form
of Elder Abuse, it hurts.
A cause of the underreporting of this crime lies among all
of us. It is too easy to turn away. The investigations are very
time consuming, the resources are sparse and the law protecting
this population from crime is not simple to prove.
We need to move forward now with protecting our elders. The
State of Maine would be an incredible place to start greater
initiatives. Together we could pave the way to being the
example for other states to follow. I encourage this committee
to consider two strategies that would help professionals like
me, help our elders:
(1) Along with reaching out to all elders through
education, statute needs to be modified or changed to protect
victims even when they don't believe that they are in fact a
victim. With reactive elder abuse, there is little hope of
recovery because of the devastating effects of these
situations. Those of us on the front line need to be more
proactive to inform elders but we also need help lifting the
limitations of the current law when we react. Many of the cases
that I see stall at the victim themselves. They don't want to
recognize that they are in fact a victim. They can't comprehend
why someone would manipulate them or prey on their innocence.
Their abuser is often considered charismatic and comforting;
something that some elders haven't felt in a very long time.
The abusers are taking everything; not just financially but
also their dignity and independence too. If we do not stop
this, perpetrators will find more victims. Our elders are being
scammed out of their lifelong homes. They are losing all that
they have saved to not only international scam artists but now
by domestic ones who have learned tricks from overseas.
If we don't work together on this level now, we have failed
what should be our most respected generation. Think of it as we
are rejecting the values taught to us by our elders, the values
that define us, have created us . . . have protected us . . .
The tragedy of elder abuse is a reflection upon all of us and
the values that define us.
(2) I encourage the development of specialized law
enforcement positions in each state. Elder Exploitation
Investigation teams, much like Drug Enforcement Agency units
with the ability to arrest and see cases from start to finish
would be something to seriously consider. Most of these cases
cross town lines and involved an incredible amount of foot work
before developing a case. Municipal officers are limited by
jurisdictions. They are also responsible for working on every
type of crime and rarely have opportunities to gather knowledge
on isolated crimes, like elder abuse/exploitation. The abuse of
our elders is significant and increasing. Even though the
statistics are deceiving, they are still devastating.
I suggest that this unit shall be both proactive and
reactive. They should be sponsored by their law enforcement
agencies (just like the structure of the MDEA) and contracted
to the unit. They need to work with multiple organizations and
send solid messages to all our residents about the seriousness
of their efforts all while ending very strong messages to those
who are targeting our elders.
We know that if we remove one side of the crime triangle
(ability/opportunity/desire), a crime will not likely be
committed, so by removing the `desire' side will make it
collapse. Much like the Hidden Camera project my task force and
I developed. If a suspect thinks they will be caught, the
desire will likely be diminished. I have found by just posting
information about my Hidden Camera project in suspected areas,
crime has significantly decreased.
Its time to bring knowledge and new initiatives to the
forefront to send a message that this epidemic is not hidden
any longer.
I have been working hard in my state for years and I am at
a point where I need help at the federal level. I hope we can
work toward fighting this ``touchy subject'';``The hidden
epidemic'', so that the statistics do not increase the way they
are predicted to.
I am so grateful to be among all of you today and I truly
hope you understand the hope you give to not only me but to our
elder population. Chairman Collins and Ranking Member Casey
have been instrumental in recognizing the importance of
tackling this catastrophe. Chairman Collins has been noted in
many of the annual conferences that my task force holds, and
even contributed a wonderful video keynote in 2017. She gives
me hope. This committee also gives me hope. Thank all of you,
for your work in publishing the annual Fraud publication. They
are available at our conference every year.
George Orwell once made the statement: Democracy isn't
about talking pretty or playing paddy cakes all day, it is
about telling the truth and the truth is sometimes ugly, often
times people do not want to hear it, but we are going to tell
it here and we are going to expose the people that feel that
can profit from the misery of others and operate in the
darkness with immunity.
We will fight this fight with tears, suffering also with
facts, statistics and truth and we are going to fight it one
battle at a time and we are not going to be intimidated into
silence or will we ever turn away''.
Again, I thank you and look forward to answering any
questions you may have.
Prepared Statement of the Honorable Derek Schmidt,
Attorney General, State of Kansas, Topeka, KS
Chairman Collins, Ranking Member Casey and Members of the
Committee: Thank you for the invitation to testify before the
committee on the ongoing efforts being made by state attorneys
general, in conjunction with our federal, state and local
partners, to combat the growing problem of elder abuse,
particularly from scams and rip-offs. I appreciate and commend
the committee for holding this hearing to highlight this work
and to further the discussion on what more we can do to
strengthen these efforts.
I am the Attorney General for the State of Kansas, a
statewide, elected constitutional officer of our state. I have
served in this capacity since January 2011. As Kansas attorney
general, I have made a priority of building capacity and
focusing resources on fraud and abuse investigations and
prosecutions, including those involving older Kansans.
Policy of the National Association of Attorneys General
I also am the immediate past president of the National
Association of Attorneys General (NAAG), the nonpartisan
association that represents all 56 state, territory and
District of Columbia attorneys general in the United States.
During my year as NAAG president in 2017-2018, I led our
Presidential Initiative titled: ``Protecting America's Seniors:
Attorneys General United Against Elder Abuse.'' As part of that
initiative, our organization worked in a bipartisan, or
nonpartisan, manner to gather information, hear from experts
and practitioners, and help build capacity to prevent and
combat elder abuse throughout the country and in our respective
jurisdictions. One culmination of the year was a national
summit on the subject, which I hosted in Manhattan, Kansas, in
April 2018. Information from that summit is available on the
NAAG website at https://www.naag.org/meetings-trainings/video-
and-other-av-archive/2018-Presidential-initiative-summit.php.
Another ongoing outcome from our yearlong focus on elder
abuse was the formation of a new committee within NAAG focused
on elder justice issues. It is clear the need for this focus
will last for years into the future. I am proud to co-chair
that committee along with Oregon Attorney General Ellen
Rosenblum.
My testimony today will contain references to certain
letters, signed by a super-majority of NAAG members, which
under our procedures reflect an official policy position of
NAAG. Thus, to the extent my testimony today reflects the
content of those NAAG letters, it constitutes the views of the
National Association of Attorneys General; to the extent I
testify to matters outside those letters, my testimony
constitutes only my views as Attorney General for the State of
Kansas.
Growing Senior Population Requires Added Focus
Between 1900 and 2010, the number of Americans age 65 and
older grew from fewer than 5 million to more than 40 million,
according to the U.S. Census Bureau. Over the same time, the
portion of the population in that age bracket rose from about 3
percent to more than 12 percent. As the baby boomers continue
into retirement, roughly 10,000 Americans turn age 65 each day,
and that trend is expected to continue for the next decade.
By one estimate, only one in every 24 cases of elder abuse
is detected or reported. Despite that underreporting,
statistically one in every 10 Americans age 65 or older who
lives at home will become a victim of abuse. The types of abuse
this includes span the full spectrum from consumer fraud to
financial abuse to physical and sexual abuse, all of which can
disproportionally target elder victims.
Another pertinent factor, less discussed, is that the
median net worth of a U.S. household with at least one resident
age 65 or older now exceeds $240,000--the most of any age group
in the United States. Thus, at precisely the time the
population of older Americans is growing rapidly, that same
population--which includes many members made vulnerable by
characteristics and changes often associated with aging--
controls more wealth than ever before, so it should not be
surprising that fraudsters and scam artists are targeting older
Americans more than ever before. They target older Americans
for the same reason Willie Sutton robbed banks: Because that's
where the money is.
In our office, we have acknowledged this growing problem by
strengthening our resources both to help prevent elder abuse
and to investigate and prosecute cases when they occur. In
2016, I reorganized the Kansas attorney general's office to
establish a new Fraud and Abuse Litigation Division that
focuses criminal investigation and prosecution resources, in
part, on elder abuse. That division houses the Abuse, Neglect
and Exploitation Unit established by the Kansas Legislature and
also the prosecution of financial crimes involving insurance or
securities. By law, the Fraud and Abuse Litigation Division
also coordinates closely with the consumer-protection and
Medicaid fraud and abuse enforcement work in the attorney
general's office.
On the prevention front, we have increased the educational
resources of our office to help make sure Kansans are aware of
the types of fraudulent activities that are prevalent. In
particular, our Consumer Protection Division offers
presentations to community organizations, senior centers and
business groups to keep Kansans informed about current scams
and fraud schemes. We have also increased our online
educational resources through our consumer protection website
at www.InYourCornerKansas.org, which offers a user-friendly way
to get tips on prevention and how to get help in the
unfortunate circumstance when one has become a victim.
Combatting Robocalls
I know the Committee has placed a particular focus for this
hearing on frauds that are perpetrated through robocalls, and
rightfully so. The plague of robocalls that has exploded in
recent years has resulted in a huge surge in complaints being
filed with our office, other states' attorneys general offices
as well as the federal agencies with jurisdiction. I often have
conversations with Kansans who are frustrated with the number
of calls they are receiving, despite having their numbers on
the Do Not Call Registry.
The unfortunate reality is that these spam callers don't
care about the Do Not Call list or any other laws we may pass
to try to combat them. The vast majority are located overseas,
armed with VOIP technology that allows them to make thousands
of calls each day for very little cost. These callers know that
they only need to reach a very small percentage of the people
they are placing calls to in order to make a profit. An
estimated 47.8 billion robocalls were made to Americans in
2018.\1\ Like other federal, state and local law enforcement
agencies, we continue to investigate bad actors and take
enforcement actions--when we can find them, but after-the-fact
enforcement alone never will be able to solve this problem
because the volume of calls is simply too large. This problem
was enabled by technology, which allows robocalls to be placed
from halfway around the world into American living rooms at
virtually no cost, and it will also require a technological
solution.
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\1\ YouMail Robocall Index, https://robocallindex.com/history/time.
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Already, there are several products on the market that help
reduce robocalls. There are a multitude of smartphone apps that
allow users to block calls from known robocall numbers.
However, these apps are only effective insofar as the caller is
not spoofing its caller ID to come from a number that is known
to the user, or even in some cases the user's own number.
That is where we believe the new protocols under
consideration and implementation by the Federal Communications
Commission known by the acronym SHAKEN/STIR may prove to be
effective. These protocols provide frameworks that service
providers can utilize to authenticate legitimate calls and
identify illegally spoofed calls.
In two comment letters to the FCC on the adoption of the
proposed regulations to implement these protocols, groups of 30
and 35 state attorneys general, respectively, including myself,
have urged their swift adoption by domestic and international
service providers. While I doubt this will be a magic bullet
that ends the scourge of illegal robocalls, I am hopeful that
implementation will move us in the right direction. I have
attached to my testimony copies of these two comment letters
(Attachments A and B).
Recommendations Going Forward
As we continue working to improve our overall response to
the growing problem of the abuse, neglect and exploitation of
older Americans, I offer several suggestions for the
committee's consideration.
First, on the robocall front, it is imperative that we
continue and step-up cooperative efforts to improve the
availability and ease-of-use of consumer technology to block
unwanted robocalls. SHAKEN/STIR is promising, but it alone will
not be the solution. Our National Association of Attorneys
General has developed a bipartisan working group that is
engaging, on an ongoing basis, with major telecommunications
companies to continually advance our efforts on this front. The
goals of this working group are:
--Develop a detailed understanding of what is
technologically feasible to minimize unwanted robocalls and
illegal telemarking;
--Engage the major telecom companies to encourage them to
expedite the best possible solutions for consumers; and
--Determine whether states should make further
recommendations to the FCC.
I recommend these ongoing cooperative efforts continue and,
as appropriate, engage all of the key players: federal
regulators, state enforcers and the private sector companies
that provide the services.
Second, we should strengthen and coordinate our outreach
and education efforts. The purpose is to help empower those who
work with older Americans, or older Americans themselves, to
prevent abuse, neglect and exploitation by knowing what to look
for and what to do when they see it. There are many such
efforts now underway--so many, in fact, that messaging and
advice can be inconsistent, or sometimes contradictory, so
coordination is key. In Kansas, we help lead the ongoing
education and outreach for preventing elder abuse, neglect and
exploitation through our In Your Corner Kansas outreach
program, and I am considering adding an employee whose job will
be lead this outreach and education.
Moreover, recurring joint federal and state public events
focusing on the problem of frauds and scams targeting older
Americans can be beneficial by raising the profile of the
issue. Last February, I joined then U.S. Attorney General Jeff
Sessions, other federal law enforcement leaders, and
representatives of victimized older Americans at a news
conference at the Department of Justice to announce the largest
federal and state enforcement sweep against fraudsters
targeting older Americans in history. Future events of this
sort could be helpful in sustaining attention on the problem.
Third, while education, outreach and prevention are
important, we must not lose sight of the fundamental importance
of effective enforcement actions. Nothing gets the attention of
those who abuse or exploit older Americans quite like seeing
others who do so detected, caught, prosecuted and punished in a
meaningful way for their actions.
To that end, I would like to bring to the committee's
attention a potential model for stepping up prosecutions using
existing resources. Several years, my office partnered with the
Kansas City regional office of the Department of Health and
Human Services, Office of Inspector General to increase
enforcement against criminal home health care fraud in the
Medicaid system. The concept was simple: federal investigators
at HHS-OIG encounter fraud involving losses small enough that
obtaining prosecution by the United States Attorney was
difficult or impossible. It is, of course, entirely
understandable that U.S. Attorneys must prioritize use of their
scarce prosecution resources and naturally focus first on
larger cases, but smaller cases are no less important--just
smaller.
We partnered with HHS-OIG for their agents to investigate
and refer to our office cases with loss amounts less than what
the U.S. Attorney chose to prosecute. Our only limitation was
that we wanted the cases presented for prosecution in state
court under state law, and that was agreeable to all parties.
The result of this partnership--we called it ``Operation No
Show''--was about a dozen cases of home health care fraud
successfully prosecuted. These were cases that otherwise would
have been detected by federal authorities but never prosecuted
in the federal system.
In short, it was a win-win for all involved.
That same model, it seems to me, has promise in addressing
fraud and exploitation of older Americans. Federal agencies
that encounter such fraud--the Postal Inspection Service, the
Secret Service, Homeland Security Investigations, the Federal
Bureau of Investigation, just to name a few--should develop
standing partnerships with state attorneys general, where
appropriate under state law, to obtain state prosecution of
crimes against older Americans that otherwise would be unlikely
to be prosecuted by federal authorities because of their
relatively small size. The key is to institutionalize these
relationships and the flow of cases, probably at the regional
office level for the federal agencies, not to rely on ad hoc
referrals.
Fourth, it is clear that our overall capacity to detect,
investigate and criminally prosecute fraud and similar crimes
against older Americans has not kept pace with the need that is
being driven by the growing elder population. Most of this
institutional capacity must come from states because that is
where most fraud is investigated and prosecuted, but we should
continually seek opportunities for federal participation that
could make a significant improvement in state capacity.
One such area would be to change federal law in a manner
that removes a limitation on the authority of Medicaid Fraud
Control Units (MFCUs) to detect, investigate and prosecute
patient abuse. Under current law, MFCUs may work to combat
fraud against the Medicaid program itself wherever it may occur
but may only combat abuse of Medicaid beneficiaries (including
fraud committed against patients) when it occurs in a health
care facility or board and care facility.
Last year, I testified before the U.S. House Committee on
Energy and Commerce, Subcommittee on Health, in support of a
bill that was backed by NAAG, to remove this limitation and
allow our MFCUs to go after fraud or abuse of Medicaid
beneficiaries wherever it occurs. That bipartisan bill, H.R.
3891, sponsored by Rep. Tim Walberg (R-MI) and Rep. Peter Welch
(D-VT), was reported out of the House Energy and Commerce
Committee by voice vote last September. It has been
reintroduced by Reps. Walberg and Welch in this session of
Congress as H.R. 233. To date, I am unaware of any Senate
companion legislation. Attached for your consideration is my
testimony in support of this legislation (Attachment C).
Conclusion
I again thank the committee for holding this hearing and
for allowing me to share some information on the work that my
colleagues and I are doing to combat elder abuse, including
frauds, scams and rip-offs targeting older Americans. As the
population of seniors in American continues to grow, we must
continue to work together at all levels of government to ensure
the resources, authority and coordination necessary to address
this growing need are in place.
Thank you for your consideration.
Prepared Statement of Judith Kozlowski, JD,
Elder Justice Consultant and Subject Matter Expert,
Washington, D.C.
Thank you, Chairman Collins and Ranking Member Casey, for
this opportunity to appear before you and all other members of
the Committee today. It is an honor to share with you some of
my experience of over the last 40 years on the matter of elder
financial abuse and exploitation, a subject to which I have
devoted my professional life. In my observation, the federal,
state and local initiatives in this field have grown
significantly and much has been accomplished to help prevent
elder financial fraud. However, with the explosion of
technology and the growing older population, we have little
time to waste in developing and implementing strategies to
address what is now an increasingly a global issue.
When I work, I often think of the victims in my cases, but
I also carrying my Uncle Howard in my heart. He was a small
businessman and World War II veteran who lost nearly everything
to an investment scheme as Alzheimer's disease took him away.
He was one of thousands of victims of a large scheme run in
Orange County, California. The recovery for his life's work was
barely pennies on the dollar and my aunt, his lifelong business
partner, was forced to place him in a public institution,
instead of being able to have him at home. She was legally
blind and rode three busses each way, every day to visit him in
his last year. This was not the ending they ever deserved or
contemplated.
In the early 1980's, I was an enforcement attorney at the
Securities and Exchange Commission (SEC) where I investigated
investment frauds, particularly small offering and penny stock
market manipulation schemes. Many of the victims of those
schemes were older adults, specifically targeted by the
perpetrators. It broke my heart to witness firsthand the
financial, material and deep psychological damage suffered by
those victims. The shame and broken trust in humanity they
expressed was tangible and unforgettable. Sadly, today many
older victims feel that same shame and broken trust.
I left the SEC to become an Assistant U.S. Attorney in the
Southern District of Florida and in the District of Columbia.
My focus was on white collar fraud investigations and
prosecutions, and I always looked for cases involving older
victims because I felt I could have a greater impact there.
Later, at the Financial Industry Regulatory Authority (FINRA),
the Consumer Financial Protection Bureau (CFPB), the
Administration for Community Living (ACL) at HHS, and now as a
consultant at the Department of Justice's Elder Justice
Initiative (EJI), I learned more about the social and cognitive
challenges facing older adults and participated in policy work
and training to build responses to the growing issue of elder
financial exploitation.
Despite renewed commitment in some quarters, the financial
fraud schemes against older adults continue to grow and become
more complex. The number of victims grow, too, as the
population ages. This is also borne out by this Committees own
Fraud Hotline. During my career, I have witnessed a growing and
effective multidisciplinary response to the frauds and swindles
hurting and often devastating the lives of older adults. Much
of this change is a direct result of increased federal
attention and legislation. One very effective collaboration is
the Federal Elder Justice Coordinating Council.
Federal, State and Local Cooperation
The Elder Justice Coordinating Council (EJCC), part of the
Elder Justice Act (2009), has transformed the work of the
Federal Government on issues of elder justice. Established in
2012, this twelve member federal agency council has grown to
include new agencies and divisions within member agencies to
further expand the reach of the Council's work. The Elder
Justice Working Group (EJWG) comprised of staff members from
each of the member agencies worked to establish Eight
Recommendations adopted by the EJCC as a framework to guide its
work and on financial exploitation and to create a more
comprehensive and integrated federal approach to the issues of
Elder Justice. It has provided a forum for discussion about
prioritizing what issues need focus and how member agencies can
work together to address them. Since 2012, partnerships across
agencies have addressed the issue of financial exploitation and
enforcement of financial crimes against older adults. Elder
financial exploitation remains the most pervasive and fastest
growing form of elder abuse in this country and the world. EJCC
members have created the Interagency Guidance on Privacy Laws
and Reporting Financial Abuse of Older Adults; routinely add
substantive content to the Department of Justice's Elder
Justice website, including substantial portions for prosecutors
and law enforcement and training.
Elderjustice.gov is now a leading resource in the field of
aging. Partnerships with the Corporation for National and
Community Service (CNCS), the United States Postal Inspection
Service (USPIS), the DOJ and the ACL's resource centers are
beginning to work with local TRIADS to more effectively help
train advocates and law enforcement address local problems
faster and more comprehensively. Agencies also worked together
with ACL in the development of the National Adult Maltreatment
Reporting System (NAMRS) data base to develop a better picture
of elder abuse nationally. Through the EJCC, the Social
Security Administration and the Department of Veterans Affairs
received support and input to strengthen their representative
payee programs and to fight fraud and abuse within those
important programs. This year, for the first time, there is an
Elder Justice track at CNCS for grantees of its RSVP and Senior
Corps programs.
As long as I have been doing this work, research has
remained a gap in our knowledge about perpetrators and victims
and about what interventions may be successful. The Department
of Justice, ACL, and NIH have given research grants to support
innovative projects in the field of elder abuse financial
exploration. Some grantees are integrating technology tools for
prevention of elder abuse. federal, state and local law
enforcement agencies worked with the ACL resource centers for
Adult Protective Services, the National Center for Elder Abuse
and the National Center for Law and Elder Rights to enhance
their training about elder abuse and financial exploitation
results.
Federal public awareness campaigns and have successfully
leveraged ways of getting important and useful knowledge to the
public through products such as the Federal Trade Commission's
(FTC's) Pass It On campaign and the CFPB's fiduciary guides,
Managing Someone Else's Money. This information is also
distributed in multiple languages to reach a wider audience.
Training opportunities across many disciplines including Adult
Protective Services, financial services training, and civil
legal services for older adults have broadened the field.
Webinars and training from member agencies frequently feature
participants from several federal agencies, non-profits and
private partners with whom they work. Agencies and law
enforcement work together with the financial services sector to
develop training programs. Civil legal services received
support from the Elder Justice AmeriCorps which allowed new
attorneys the opportunity to work for two years on the often
complex legal issues facing older adults. These efforts have
reach thousands of older Americans and their families.
By using the expertise and resources of its members, making
partners across federal agencies, and thinking broadly and
inclusively about how to address important issues for older
adults, the EJCC has moved the field.
As with EJCC, federal legislation has been an important
tool to move federal law enforcement. The recently signed Elder
Abuse Protection and Prosecution Act (EAPPA) is also making its
mark. By establishing an Elder Justice Coordinator (EJC), an
AUSA devoted to this issue in every federal district, and
requiring regular training of FBI agents, the issue of elder
abuse and financial exploitation is now a cornerstone of
federal law enforcement work. EAPPA's provision requiring
community outreach by EJCs further offers the opportunity to
build multidisciplinary partnerships with state and local
counterparts and to bring benefits to the field. The mere fact
that local and state law enforcement know that there is a
strong federal interest in this work and in greater cooperation
across jurisdictions will enhance the number and quality of
elder abuse and financial exploitation cases brought
nationwide. A key provision of EAPPA requires training on how
to work with older victims and witnesses. This training has
included elder abuse experts and neuroscientists as well as
victim specialists in the field.
The National Association of Attorneys General (NAAG), under
the leadership of Kansas Attorney General Derek Schmidt, has
been key in building partnerships within states and with the
Federal Government. There are long standing state and federal
partnerships with State Medicare Fraud Units (MFCU) units in
the area of health care fraud, but under Attorney General
Schmidt elder abuse and financial fraud cases have greater
focus. Some states, like New York and Maryland have a specific
Assistant Attorney General assigned to elder affairs, covering
cases from consumer concerns to criminal prosecutions.
The National Center for State Courts also conducts elder
abuse and financial exploitation training for judges and court
personnel. Victim witness advocates also participate as
trainers in these courses. The Center is working to develop a
system to track guardianship expenditures to alert the court
and to prevent fraud by guardians.
On the local level, the International Association of the
Chiefs of Police (IACP), supported by the DOJ has just released
Roll Call videos on elder abuse and financial exploitation
which are shared with its membership of over 30,000 members in
150 countries and are available on its website. These short
videos feature different aspects of elder abuse and showcase
the key role that local police play in identifying elder abuse
and financial exploitation and bringing the perpetrators to
justice. There are also other initiatives by IACP to
specifically address financial exploitation. There are many
outstanding local prosecutors throughout the Nation including
those in King County, Washington (Seattle), Cook County,
Illinois (Chicago), Los Angeles County, Orange County and Marin
County in California, to name just a few. Each of these local
experts are usually part of multi-disciplinary teams, which
now, with EAPPA look to include federal agents and prosecutors.
These partnerships and training opportunities have changed
the field of law enforcement of elder abuse and financial
exploitation. The cooperative work of agents and officers who
worked on the hundreds of cases brought in last year's historic
nationwide elder fraud sweeps is a tribute to the benefits of
law enforcement collaboration in all departments.
Education: Raising Awareness About Elder Abuse and Exploitation
There has been renewed attention on materials, campaigns
and outreach to increase awareness about frauds targeting older
adults. However, there are often limits to the education of
older adults without further support. Complexities associated
with cognitive changes present challenges to how to create
effective information campaigns and bring awareness about
financial dangers. Mild cognitive impairment often affects the
ability of older adults to retain well intended and important
information once they have received it. Often, a few hours
after the best organized presentation on how to prevent being a
victim of current frauds and swindles, the information and
warnings may fade and the message diminishes. One of the
strengths of the FTC's Pass It On campaign is the manner in
which it encourages the continuation of the conversation.
Education, especially, financial literacy education, in the
context of multigenerational training may well have an effect
and act as a protective measure in the face of financial
exploitation. Multigenerational training can provide some of
the support an older adult may need in the face of fraud.
Having other trained family members or trusted persons can also
be important supports in the face of social isolation and
cognitive impairment. Providing someone to talk to in the midst
of pressure from a perpetrator and breaking down the social
isolation, this can act as a preventive action against fraud.
For example, the NY State Attorney General's office this fall
released a short Public Service Announcement about the
Grandparent Scam. In it, high school students speak to their
grandparents to tell them to call them before they send money
to anybody. It is a straightforward appeal. The PSA also
includes Dr. Ruth Wertheimer, who was nearly a victim of the
same scam.
Financial Services
The financial services industry has also become a strong
and much needed partner in the fight against elder financial
exploitation. The Senior Safe Act, passed last year, will
undoubtedly increase reporting of financial exploitation of
older adults and provide the much needed training to tellers
and supervisors of financial institutions. In many of the cases
I prosecuted, I was told by bank tellers that they were afraid
to report what they saw before them for fear of losing their
job; not because they were wrong, but because they were afraid
of losing the customer.
NASAA, the North American Securities Administrators
Association, under the leadership of Maine Securities
Administrator, Judith Shaw, drafted a Model Act to Protect
Vulnerable Adults which has now been adopted in 19 states and
is set to be voted on in at least five other states this year.
This Act and the Advisory Group on Senior Issues has created an
informal nationwide multidisciplinary team focused on senior
investors.
SIFMA, the Securities Industry and Financial Markets
Association, through its Senior Investor Protection program has
a long standing working group and sponsors regional programs
involving federal, state and local law enforcement, local SIFMA
members, federal, state local prosecutors and often experts in
the field of aging and cognition. It has a special section on
its website devoted to issues of senior investors and a tool
kit for brokers and investment advisors on recognizing common
frauds, elder financial exploitation and tips about what to do
when a fraud is recognized.
The new FINRA Rules, Rule 4512 that creates a trusted
contact form for account holders regardless of age and Rule
2165 that permits a transactional hold by a broker suspicious
of a transaction, are also changing some of the ways the
financial industry addresses elder financial fraud. Working
with law enforcement, these new rules offer powerful
investigative tools. The FINRA Foundation also works with
National Center for Victims of Crime on these very issues.
The American Banker Association and AARP's BankSafe program
also address the need of banks to train staff. BankSafe's
program, will provide bankers with few resources to develop
financial exploitation training, a downloadable training
program for their use.
Adult Protective Services has also developed a universal
document demand for its financial exploitation which is in use
in a few states where it has significantly reduced the time in
which an APS worker receives financial records.
Technology
Large scale frauds against older adults are often
accompanied by a new technological development. Information
collected from social media accounts of older adults often
provides perpetrators access to execute a fraud. Grandparents
can be especially vulnerable in this way. Gift cards,
MoneyGrams and Western Union wires are all liable to misuse.
These tools along with tech support frauds and spoofing can
leave older adults vulnerable. Enlisting experts in technology
and building partnerships can help move us closer to
understanding those schemes and uncovering solutions.
There are a few technology companies that work to fight
elder financial exploitation. For example, EVERSAFE, a company
founded specifically to address prevention of financial
exploitation, uses complex alert systems to tell a customer if
there is any unusual activity on any account. This type of
technology can be used by older adults or loved ones to monitor
accounts.
Conclusion
The field of aging is making progress in addressing the
important issue of elder financial exploitation. Collaborative
work across law enforcement, including agents and prosecutors
of all jurisdictions investigation and prosecuting cases is
critical. Including the financial services industry and the
tech industry as investigative partners or experts in those
cases may help reduce the number of victims in larger cases.
Large scale sweeps are always noticed by the perpetrators and
serve as a signal that law enforcement will continue to bring
cases of all sizes to protect older adults from financial
exploitation, but law enforcement alone cannot solve this
problem. A multidisciplinary approach is essential.
Exploring public--private partnerships with the card and
tech industry may also provide opportunities for prevention.
Continuing to invest in technological innovations to address
elder financial fraud and prevention. More technical training
opportunities for state and local law enforcement will also
help obtain an earlier response to a victim.
Understanding the vulnerability of an older adult and
addressing the risk of elder financial exploitation is
complicated. The two highest risk factors for elder abuse and
financial exploitation are social isolation and cognitive
impairment. If we address those two factors in collaboration
with law enforcement and public awareness efforts, we can build
protective mechanisms in the prevention of elder financial
exploitation.
Thank you.
=======================================================================
Questions for the Record
=======================================================================
U.S. Senate Special Committee on Aging
"Fighting Elder Fraud: Progress Made, Work to be Done"
January 16, 2019
Questions for the Record
Candice Simeoni
Senator Jacky Rosen
Question:
According to the 2019 Fraud Book, the top scam reported in
Nevada to the Aging Committee's Fraud Hotline in 2018 was the
Computer Tech Support Scam. Are there any educational materials
available to the public about identifying and preventing
computer tech support scams?
Response:
Thank you, Senator Jacky Rosen, for your question. I would
also like to thank you for your commitment to making the future
for our aging population a priority. I appreciate you sharing
your experience as a committed caregiver for your older family
members at the hearing. It is truly commendable.
As I explained to you and the committee during my visit in
January 2019, my York County Elder Abuse Task Force (YCEATF)
has been such a great asset to me in my work throughout my
career. I feel strongly that I would not have been as effective
with my elder justice cases or my work in general without them.
To answer your question, I have asked the group for input.
This is an example of what I would do if I had a question on
one of my cases where I wanted more knowledge and direction
than what I could offer alone. I am proud to report the
following, as a collaborative answer to your question: what
educational materials are available to the public about
identifying and preventing computer tech support scams:
I have also noted the names of the members that provided
response.
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U.S. Senate Special Committee on Aging
"Fighting Elder Fraud: Progress Made, Work to be Done"
January 16, 2019
Questions for the Record
Honorable Derek Schmidt
Senator Richard Blumenthal
Question:
As you mentioned in your testimony, you coordinated with
the DOJ for its sweeping federal and state enforcement actions
taken against elder fraudsters last February. Can you share why
you believe this enforcement is not only helpful to send a
message to scammers, but also helpful to elders who may be at
risk for getting targeted in the future? Have you seen an
increased focus not only in Kansas, but around the country, in
combatting elder fraud?
Response:
Enforcement sweeps, such as the one coordinated by the
Department of Justice last year, help bring public attention to
the issue. It puts scammers on notice that law enforcement
officials across the country are diligently working these
cases. It also reminds consumers that these bad actors are out
there and that they should be on alert.
We have seen an increased focus on combating elder fraud
across the country. During my year as president of the National
Association of Attorneys General (NAAG), we focused on this
issue and found that many people across the country and across
multiple disciplines and industries are interested in this
issue. The growing population of senior citizens will make this
an area of continued focus, which is why I'm pleased that NAAG
has created a new standing committee on Elder Justice to
coordinate these ongoing efforts.
Question:
In your testimony, you talked about the pervasive impact of
robocalls and the much needed cooperation among
telecommunication companies to develop SHAKEN/STIR standards to
fight scammers in their use of spoofing, VoIP fraud, and other
schemes. As you know, the rapid development of call spoofing
technology has made it increasingly difficult for law
enforcement agencies and the FTC to locate the call
originators. How can we better educate and empower consumers
against scams, caller-ID spoofing, and especially newer forms
of spoofing like ``neighbor spoofing''? How can we ensure that
educational materials actually get to the especially vulnerable
populations--such as the elderly--who are targeted the most?
Response:
Finding the best method of communicating with seniors about
scams is a challenge. We have tried many methods of
communicating this information in Kansas. This includes our In
Your Corner Kansas website, which I discussed during the
hearing, as well as sending information out through the local
media. Our office sends out a monthly ``Consumer Corner''
column to newspapers around the State, and I have a monthly
segment on one of our local broadcast television stations to
share information as well. We also regularly give consumer
presentations to community groups, senior centers and other
organizations to convey this information. We are also always
looking for new ideas and methods to communicate with those who
may be most likely to be targeted by scam artists.
Senator Jacky Rosen
Question:
According to the 2019 Fraud Book, the top scam reported in
Nevada to the Aging Committee's Fraud Hotline in 2018 was the
Computer Tech Support Scam. Are there any educational materials
available to the public about identifying and preventing
computer tech support scams?
Response:
As I mentioned in my response above to Sen. Blumenthal's
question, we have information about these types of scams
available on our consumer protection website at
www.InYourCornerKansas.org. The Federal Trade Commission also
provides educational materials on a wide range of scams and
other consumer-protection issues on their website.
U.S. Senate Special Committee on Aging
"Fighting Elder Fraud: Progress Made, Work to be Done"
January 16, 2019
Questions for the Record
Judith Kozlowski
Senator Jacky Rosen
Question:
According to the 2019 Fraud Book, the top scam reported in
Nevada to the Aging Committee's Fraud Hotline in 2018 was the
Computer Tech Support Scam. Are there any educational materials
available to the public about identifying and preventing
computer tech support scams?
Response:
I believe that the very best available educational
materials to inform and protect consumers from computer tech
support scams can be found at the Federal Trade Commission. The
link is: www.consumer.ftc.gov/articles/0346-tech-support-scams.
The information provided here is available in English and
Spanish. It includes information about how the scam works, what
to do if you get a call or a pop-up, what to do if you were
scammed, and a special section on Refund Scams.
AARP through its Fraud Watch Network also has some
excellent consumer information about tech support scams. It is
available at www.aarp.org/aarp/fraud--watch.
There is also a video available through the AARP Fraud
Watch Network called Hang Up on Tech Support Scams.
There are also at least three You Tube videos that may be
of interest and will inform consumers:
--Tech Support Scams;
--Consumers Warned About Tech Support Phone Scam; and
--Don't Be a Victim of Tech Support Scams.
=======================================================================
Statements for the Record
=======================================================================
Testimony of Thomas M. Flavin, Jr. and wife Elfriede Flavin
Effects of a Grandparents Scam
September 17, 2018: Elfriede received a call from what she
thought was our grandson Michael Montgomery.
Michael: Hi grandma, are you busy, can I talk to you?
Elfriede: I am never too busy to talk to you.
Michael: I got into a little bit of trouble, can you help
me out?
Elfriede: What kind of trouble? Where are you?
Michael: I am in Tennessee, I went with my friend because
his father died from an aortic aneurism. Can you keep a secret?
Elfriede: Yes, what happened?
Michael: They had two beers and they caught me because he
had a car accident and took me to jail for DUI. It is going to
cost him $10,000.00 dollars to get out of jail.
Elfriede: You should call your parents.
Michael: I can't, I will tell them when I get home. I have
a number for you to call Jade at 931-444-6433.
The connection was terminated at this point. We had a
discussion of the matter when I had returned from working at
the American Legion. I can say at this time that Elfriede
really thought she was talking to her grandson. I had no reason
to doubt her.
We called Jade at the given number and were referred to a
man identifying himself as Mr. David Thomas, attorney, and a
public defender for Michael.
He explained, at what we both thought, in a profession
manner, that my relative was involved in a two-car accident
that involved personal injuries, and because he was from out of
state, the district attorney thought he would be a possible
flight risk and wanted him jailed for $10,000.00 bail money.
As Michael was from out of state Mr. Thomas was having a
hard time finding a bail bondsman and only could get a cash
only bondsman because Michael had no credit. He also explained
that Michael had suffered from a broken nose and required
stitches. He also stated that if we agreed to put up our
relative's bail we would be under a court ordered gag order and
would not be able to discuss his case with anyone except his
public defender and us as his only personal contact while our
relative was incarcerated. Phone calls were restricted while he
was incarcerated and then only in the presence of his attorney.
As we had agreed with Michael to keep his secret we agreed
to put up his bail and send the required money. We understood
all through the process of the scam that we were putting up
bail moneys that would be returned as soon as Michael's case
number, K3466-201 was settled.
We were then instructed to forward the money through FedEx,
in care of Michael Montgomery, 205 Long Lane, Upper Darby, PA
19082. The money had to be wrapped in carbon paper, to prevent
X-ray scanning, and theft by FedEx workers. This was done, and
the FedEx receipt faxed through Staples to 1-877-807-5822.
19 September 2018: On 19 September we received a call from
Attorney Thomas that there was a complication with Michael's
case. The person injured in the vehicle that Michael had hit
was driven by a woman who was pregnant and as a result of the
accident she had lost the baby.
Our relative was now being held on a possible vehicular
homicide charge. Our relative was now possibly facing two to
ten years in prison if convicted, and the bail was raised from
$10,000.00 to $50,000.00. At this point we were essentially
horrified, both for my grandson, who was looking for a career
as a lawyer, and for the mother with the lost child. Elfriede
was in tears.
The situation of having my grandson in jail out of state,
faced with a criminal charge and having to share the guilt of a
woman losing her child because of an accident, we felt
terrible. Being still under a court ordered gag order, we could
talk to no one was excruciating.
I personally had flash backs to when my younger brother
during the late 1960's was incarcerated. Family history: Back
in the late 1960's, New York State passed a helmet law for
motorcyclist. Get caught riding without a helmet, you went to
court and were fined. If you did not pull over when signaled
and they caught you, you faced a flight to avoid prosecution
charge. This happened to my brother. A local nightspot was
picked by NYS trooper because of it being a place where people
who were riding the early light Japanese motorcycles were
hanging out at. At closing time my brother, aged 22, went about
15 miles without his helmet, before he was captured while
hiding in a used car lot that had no escape exit. During his
arrest, one of the troopers stepped into an overgrown culvert
and broke his ankle. The result was my brother was charged with
assault, over and above the charges of ridding without a helmet
and flight to avoid prosecution. My parents had to put their
home up for bail and hire an attorney, at least $20 to 30,000
at the time. My brother went to jail for six months, even
though the assault charge was dropped. I felt the fact that as
long I had the money to pay the extra bail money, I would pay
it. Again, I went to my bank to take out the money where the
bank manager had me sign an affidavit that I was not in so many
words being taken advantage of. I was unhappy about the
situation but said nothing. I was still under a court gag
order.
We wrapped the moneys as Mr. Thomas directed for FedEx.
During our discussions, he asked me to verify that we had sent
the $10,000.00 because the bondsman said they only found
$5,000.00 in the FedEx envelope. I told him in no uncertain
terms that I had put the money in as directed and if they say
they have only $5,000.00, someone else had stolen it, or
someone was lying. He responded the he was only checking with
me. He knew that insurance would cover the loss. The money was
sent via FedEx to: I/C/O Michael R. Montgomery, 635 W 170th ST,
Apt 5D, New York, NY 10032, on 19 September 2018 and the FedEx
receipt faxed through Staples to 1-877-807-5822.
21 September 2018: On this date we received a call from Mr.
Thomas informing us that my relative was now a free man with
some conditions. He was not charged with assault; his DUI
charge was reduced under the condition that he be enrolled in a
DUI counseling program and upon completion of the program his
record for the State of Tennessee would be expunged. Mr. Thomas
was making arrangements to have him enrolled into a local
program either near his home or college. For him to be released
he would be required to pay for the damages to both vehicles
that his personal vehicle insurance did not cover. That came to
$30,544.00. We would receive back the bail money we had sent
within a week to 10 days as soon as the state finished the
paperwork. If and when we sent the money for the vehicle
damages Mr. Thomas would let Michael stay at his residence and
in the morning furnish him a bus ticket to either his home or
back to college.
During this process we did receive pleading calls from
Michael promising to pay us back no matter what, so I went back
to the bank. The $30.544.00 was sent through FedEx per
instructions to: I/C/O Michael R. Montgomery, 108-20 46 Ave,
Apt 3A, Corona, Queens, NY 11368.
Then we waited for Michael's return to explain to his
parents what had happened. About 28 September 2018 we received
a call from Mr. Thomas that he was in a dilemma. Apparently,
his law firm accused him of violating his Public Defenders
status by him being hired by us as being Michael's personal
attorney for the vehicle damage settlement, it was supposed to
be a separate case and he needed $20.000.00 to rectify the
situation or his career would be ruined. He didn't have the
money and asked that as he successfully defended our relative
that we give him the money so he could keep his license. I told
him I was sorry, but I would not hire him as an attorney, I
only agreed to pay for bail and vehicle damages. If he wanted
to be belatedly retained as Michael's attorney, he must call
Michaels parents. They would have to be the responsible party.
He did not sound happy and that is the last we heard from him.
We then defied the court's gag order and called our
daughter to inform her that Michael was in jail in Tennessee
and need a lawyer right away. Right away after talking with my
daughter, Michael's mother, we found we had been thoroughly
scammed.
At first, we felt foolish, how could this happen to us? It
seemed so real. We dealt with thoughtful caring people, we
thought. Mr. Dave Thomas acted the professional, he obviously
knew more about court procedures that we did.
It seemed more people, including my own children knew about
the Grandparent scam than we did. We watch Dr. Phil and knew
about African love scams and were familiar with some
investments scams, but if there was a scam of grandparents
involving their loved ones, it wasn't anything that we
recollected during the whole process of being scammed.
I am a Department of the Army civilian retiree after
twenty-five years of service with the Army Reserve. The thrift
savings plan that I paid with matching federal money has been
effectively lost.
We are bent but we are not broken, we will survive this
incident. In a way it feels like a sad death in the family. If
you are not busy thoughts creep into your head, why, how could
people do this to other people, I gave away $80,544.00, how
could I be so stupid. An incident or an innocent conversation
can set of feeling of sadness bordering on depression. You have
to fight it and not let it get you down. We realize we will
never see the money. We still have a mortgage, two 10-year-old
cars, two cats and our family.
The Honorable Derek Schmidt, Attorney General,
State of Kansas, Topeka, Kansas
Attachments A and B
Two comment letters to the FCC to end illegal robocalls,
signed by 30 and 35 state attorneys general, respectively.
Attachment C
Testimony in Support of H.R. 3891, presented to House
Committee on Energy and Commerce, Subcommittee on Health,
September 5, 2018.
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