Elder Financial Abuse: An Advocate's Guide to Proactive Intervention

28th ANNUAL COVA CONFERENCEOctober 23-26, 2016Keystone, Colorado

Presenter: Don Rudisuhle CFEdon@eldertheft.com

www.linkedin.com/donrudisuhle(307) 745-6391

My Background• Personal

– From Honolulu, Hawaii. Now live in Laramie, Wyoming– Raised in Mexico, lived in Europe, Africa and Asia

• Education:– BS Economics, MBA Finance

• Career:– Former pharmaceutical company executive– Former international development consultant– Current occupation:

• Certified Fraud Examiner• Forensic Accountant• Expert Witness• Elder Financial Exploitation Researcher

• Disclaimer: I am not a lawyer (I can’t give you legal advice)

Your Background?

Poll Question #1• How many of you are:– Advocates?– Attorneys?– Law Enforcement Officials?– Administrators?– Financial Personnel?– Other?__________________________

Presentation Major Points• What is elder financial exploitation? What is

its effect on the victim and the family?• What are the characteristics of a perpetrator?

How do they operate?• What is the role of the advocate? How can an

advocate help families deal with the problem?• How does a forensic accountant investigate a

suspected case? What tools are used?

Elder Financial Exploitation• Elder financial exploitation is defined as the

illegal or improper use of an elder's resources for another's profit or advantage.– According to the Colorado Department of Human

Services, from the years 2011 to 2021, the number of older adults in Colorado will increase 54 percent

– Underreporting is estimated to range from 10 to 44 cases for every reported case

– Losses to victims are believed to exceed $3 billion annually

The VictimIs often:• An elderly person• A disabled individual• A widow/widower• Confined or bedridden• Chronically ill• A lonely individual• A trusting soul

Who are the Victims?• Typically, the victims:– Are above the age of 65– Female– Widowed or estranged from mate– Have some amount of savings or real estate– Lonely, living alone, or in a facility– Suffering from some degree of cognitive

impairment

Consequences to Victim• Consequences of Financial Exploitation– Compromises elder’s financial security– Degrades their quality of life– Engenders fear and anxiety– Limits access to health insurance and care – Contributes to homelessness– Causes depression and despair– Increases costs to the state i.e. Medicaid– Destroys relationships and harmony in the family– Heirs lose their inheritance

Victims with Dementia• A few things to consider:– Persons with dementia are much more vulnerable– Cognitive impairment affects financial decision

making– Women and minorities are more likely to be

affected– An Alzheimer’s victim may be incapable of

articulating a concern– Unscrupulous individuals may try to take

advantage of them

Impediments to Reporting

• Many victims are hesitant to report because:– They don’t know what to do– Unsure of what has occurred – Denial of the facts– Embarrassment with friends and family– Fear of retribution from perpetrator– Fear of isolation or abandonment from loved ones– Fear of loss of medical or other care– Don’t want family member to be imprisoned

The AdvocateThe advocate’s role is:• Know the client• Listen to concerns• Be understanding• Provide reassurance• Assess the client’s needs• Offer resources• Make proper reports

The Advocate’s Objectives

• If the advocate suspects financial abuse on interaction with the elder, a family member or a caregiver, the steps to take are:– Assess client needs– Identify possible resources– Determine whether a report needs to be made– Request help from the proper authorities

Symptoms to Look For– Elder has recently made a new “best friend”– Often makes large bank or ATM withdrawals– Sends checks or wire transfers overseas– Is unaware of his/her financial status– Has difficulty paying bills and buying everyday necessities– Receives mail for lotteries, prizes and contests– Gets frequent calls from telemarketers– Is isolating him/herself from family and friends– Demonstrates fear or submissiveness towards caregivers– Caregiver tends to intercede and speak on behalf of victim– Living under squalid and unsanitary conditions

The Urgency for Taking Action

• Taking action is a matter of urgency. The desired outcomes are:– Stop the hemorrhage– Reassure the victim– Initiate measures to recover assets– Hold the perpetrator accountable

Ascertaining the Facts

• Things are not always what they appear– Listen patiently to the elder’s story– Does it sound plausible?– Be sympathetic and understanding– Learn as much as possible without probing– Don’t frighten or alienate the person– Assess possible courses of action• Obtain more information, or• Report the incident without delay

Mandatory ReportingOn May 16, 2013, Governor Hickenlooper signed Senate Bill 13-111, Require Reports of Elder Abuse and Exploitation– Persons observing abuse or exploitation of person 70 years or older must

report it to law enforcement within 24 hours– Adults with intellectual or development disabilities also included– A person reporting in good faith enjoys immunity from civil suit or criminal

action– Members of the clergy are exempt under certain circumstances– Since the law went into effect, the number of reported cases in Colorado

has reached 17,743, an increase of 50%

Who Must Report?

• Mandatory Reporters in Colorado include:– Medical personnel• Physicians, nurses, pharmacists, dentists, chiropractors,

therapists, long-term care staff and others– Home health workers and social workers– Court appointed guardians and conservators– Bank and financial institution staff– Government officials• Police and firefighters

– Clergy (under some circumstances)

Where to Report?

• Reports can be made to:– Adult Protective Services: call the APS intake

number for the County Department of Human/Services where the at-risk adult lives.• Examples: Denver (720) 944-2994, Arapahoe (303) 636-

1750, Larimer (970) 498-7770, Weld (970) 346-7676– Your county Department of Social Services. For

contact information www.colorado.gov/cdhs– Your local police department or sheriff’s office.

Families Will Need Guidance

• Help families decide what to do• Pursue legal action or negotiate?• Identify legal resources who can help with:

– Recovery of assets– A conservatorship or guardianship

• Tasks that they can perform themselves• Write up a narrative of the facts• Collect documents like bank and investment statements• Make a list of persons involved in the case• Create a timeline of events

Can You Recommend Resources?

Poll Question #2• Does your organization do pro-bono legal

work?• Can you recommend resources that the

advocates can use to obtain assistance?

The PerpetratorCan be anybody!• A family member• A distant relative• A neighbor• A health care worker• A trusted professional• A tradesman• A complete stranger

Perpetrator Characteristics • Some typical attributes

– Is narcissistic and lacks empathy– Is a wheeler and dealer– Is domineering and controlling – Doesn't like people questioning their judgment or actions– Has a strong desire for personal gain– Has a “Beat the system attitude”– Lives beyond his/her means– Has a close relationship with the victim– Is unable to relax– Outwardly, appears to be very trustworthy.– Displays some sort of drastic change in personality or behavior– Appears incapable of feeling guilt or remorseAdapted from The Certified Accountant, 1st Quarter 2009, Issue #37

Four Case Studies

• A case of involving close family members– A daughter misuses a power of attorney

• A retired couple falls for a foreign lottery scam– A cold call from Jamaica causes excitement in the family

• “Your computer has a virus!”– An elderly widower invites a telescammer into his PC

• “It looks like your roof has hail damage”– The stranger at the front door can put on a new roof at

no cost!

Daughter Misuses POA

• Ripe for the picking!– An aging couple sets up an estate plan– Elder’s daughter is trustee and POA agent– Husband dies, wife develops Alzheimer’s– Daughter accesses funds for personal use– Builds a custom home, buys truck, goes to Vegas– Sibling brings civil suit, conservatorship action– Long story short, daughter gets away with it

Losing the Jamaican Lottery

• Educated woman had by clever scammers– In retirement she enters sweepstakes for fun– One day a cold caller tells her she was won!– To claim her millions she needs to pay the taxes– A courier will deliver her check shortly – Repeated misfortunes befall the courier– Money is need for medical costs and to post bail– Nearly six figures sent to Jamaica

Your Virused Computer…

• A trusting elderly disabled man gets a cold call– The man is from “Windows Technical Service”– He is on a poor crackly overseas connection– He says that the man’s PC is sending out viruses– He asks the man to go to a special website– Scammers then take control of his computer– They can fix everything for a modest fee– Man gives them a credit card and bank password!– A bad ending ensues

Hail Has Damaged Your Roof

• A door-to-door huckster pitches a new roof– Shows up on the porch at an inopportune time– Says the roof has hail damage which he can fix– Senior homeowner lets him put up a ladder– In 20 seconds, he determines damage is extensive– He produces glossy brochures from his clunker car– Your homeowner’s insurance will pay for new roof– Homeowner subjected to a high pressure pitch– Homeowner sends him packing

A Victim’s Family Member

Unlawful conversion of the victim’s assets via:• Misuse of a Power of Attorney• Trusteeship – abuse of fiduciary responsibility • Quitclaim deed to real estate• Adding themselves to a bank account• Persuading the victim to change their will• Forging checks and other documents• Depositing retirement checks “less cash”• Stealing valuable property or cash

Long Distance Scammers• Hallo, I am calling from Microsoft. You have virus…• Good News!!! You have won the Costa Rican lottery!!!• I am the Oil Minister of Nigeria. I have some funds…• Grandma, I’m in jail in Hungary. Send bail money…• I’m terminally ill. Can you help distribute my estate?• We need you to deposit checks from our customers and

wire us the money. You can keep a commission…• This is Rachel from Card Services. Your eligibility to lower

your interest expires soon. This is your final notice…• Our church’s roof is leaking. Can you donate…?

Failed Advance Fee Scam

We are looking for a Clerk.In spite of its today�s success and stern stance on the market of relevant services, our company goes on developing and improving. Our corporation permanently works at the presentation of new services…If you are a young, conceited, pertinacious, attentive, responsible, reliable specialist who desires to begin a career in the legal entity with the perfect reputation, you are welcome to apply for the vacancies we offer. Our company cherishes its employees etc etc...

Penalties in Colorado

• In Colorado, there are enhanced penalties and a surcharge for crimes against at-risk persons.

• Under C.R.S. 18-6.5-107 (7)(b) Criminal exploitation of an at-risk person is a class 3 felony if the thing of value is five hundred dollars or greater.

The Dance of the Auditors

A modern interpretation of Matisse’s “Dance”

Beginning the Investigation• How the forensic accountant gets involved– A trust and estate lawyer or an elder law attorney

contacts the forensic accountant, usually through a trusted referral

– The attorney calls and discusses the case– The attorney’s client sends financial data– The accountant analyzes the bank statements– A report is sent to the attorneys– Lawyer, client and accountant decide on action – Litigation may be initiated

Vetting an Expert• Attorneys recruit experts based on:– Education, certificates and training– Involvement in prior cases– Publications in print or online– Presentations, seminars and webinars– Social media presence– Referrals from other attorneys or their clients

Investigative Tools• Some of the tools used in an investigation– Microsoft Excel (Spreadsheet Analysis)– Perfect Audit (Convert bank statements to Excel)– Adobe Acrobat Professional (Edit PDFs)– Microsoft Access (Database)– Genopro (Genograms)– Dragon Naturally Speaking Professional Edition– Online data sources (Veromi, Intelius etc.)– Public records (Recorder, Assessor, Sec. of State)– NodeXL (Social Network Analysis)

Outcome of the Case• There are a number of possible outcomes:– All parties work it out among themselves (rare)– All parties agree to mediation– A civil suit is filed and it ends with:• A negotiated settlement through arbitration• A judgment against the defendant• A dismissal by the court• Abandonment by the plaintiffs on financial grounds• A criminal case being initiated

Genograms

Follow the Money

Amounts Can Be Large

Credit Cards Paid Off!

A Pickup Truck for Mom

N.B. Mom resides in an Alzheimer’s care facility

Forecasting Finances

Estimated Expenditures

Depletion of Victim’s Assets

Obstacles to Recovery

• Cash most likely has been dissipated• Perpetrator has left the state or the country• Assets have been transferred to a third party• Assets have put in a trust or corporation• Real estate has been retitled to someone else• Complainant can’t afford cost of litigation• Statute of limitations has lapsed• Victim may be deceased

Your Personal Experience?

Poll Question #3Have you ever had a personal experience with Elder Financial Exploitation?• Yes• NoIf yes, was the outcome:• Positive?• Negative?

Current Research• The USDA Multi-state Research Team– Spearheaded by the University of Wyoming– Includes researchers from:• Eastern Illinois University• University of Wisconsin-Madison• Virginia Tech University• Washington State University-Vancouver• University of Minnesota

Purpose of the Research

The purpose of the team’s current research is to understand the risk factors associated with elder financial exploitation by analyzing family members’ experiences when a power of attorney document has been used by another family member to manage an elderly (age 60 or older) relative’s finances

Call for Participants• Seeking multiple participants from families with:– Successful family member experiences– Families with allegedly exploitive experiences

• Requirements:– Need to be a U.S resident 18 or older

• Contact:Virginia B. Vincenti, PhD, CFCSProfessor of Human Development & Family SciencesUniversity of Wyoming307-766-4079 vincenti@uwy.edu

Q & A Session

• Ask whatever question you wish• Tell your own story about elder financial

exploitation

• This slide deck can be found at http://www.slideshare.net/eldertheft