A female entrepreneur was approached by a person who posed as a CPA with whom she had a business relationship in the past. The CPA impersonator referred her to contact an SBA “agent” to help fund a project she was initiating. The entire relationship was fostered over Instant Messenger without face-to-face or oral communication. The CPA impostor must have researched the entrepreneur and knew a tremendous amount of information about her past. She is very active on the internet and in the business community and has written a book about her life. The “Agent” quickly told the entrepreneur of a little-known US Government program that would provide funds from $10,000 to $500,000 for worthy projects to help start a business. The “Agent” built their relationship over Instant Messenger and sent information to entice participation in the program (special people, ending soon, no repayment). When the subject of fees came up, the ”Agent” advised that the fee would be 10% of the funds requested, and it had to be paid in advance. At that point, the entrepreneur remembered a seminar she had attended at a Rotary meeting, and she stopped all communications with the “Agent.” He continued for a short period, trying to get her to respond, and then gave up.  

Elderly adults are defined by the Federal Trade Commission (FTC) as a person over the age of 60. Bulletins have been issued by the FBI, FinCEN, the FTC, and other organizations about Elderly Financial Exploitation (EFE). In 2019, the Department of Justice reported that at least 10% of older adults in the United States were affected by EFE, resulting in the loss of more than $3 billion. Since the COVID-19 pandemic, the rate and loss have increased substantially.^[1]

Scammers defraud victims into sending payments and disclosing personally identifiable information (PII) under false pretenses or for a promised benefit or good the victims will never receive. These scammers are often located outside the United States and have no known previous relationship with the victims. 

Elder scams often follow a similar methodology in which the scammer:

1. Contact older adults under a fictitious persona via phone call, robocall, text message, email, mail, in-person communication, online dating apps and websites, or social media platforms.  
2. To appear legitimate and establish trust with older adults, scammers commonly impersonate government officials, law enforcement agencies, technical and customer support representatives, social media connections, family, friends, and other trusted persons.  
3. Perpetrators often create high-pressure situations by appealing to their victims’ emotions and taking advantage of their trust or by instilling fear to solicit payments and PII. 
4. Scammers often request victims to make payments through prepaid access cards, gift cards, money orders, tracked cash delivery, and, more recently, cryptocurrency. 
5. The scammer can also cause the elderly adult to participate as a “Money Mule” who transfers or moves illicit funds in the scammer's direction. A victim of an elder scam can also serve as a money mule when the scammer convinces the victim to set up a bank account or limited liability corporation (LLC) in the victim’s name to receive, withdraw, deposit, or transfer multiple third-party payments from other victimized older adults to accounts controlled by the scammer under the illusion of a “business opportunity.”   In some circumstances, victims of EFE acting as “Money Mules may be prosecuted for this illegal activity and are liable for repaying the victims. They may also be subject to damaged credit and further victimized through their stolen PII. 

The FinCEN Advisory Elder Financial Exploitation FINAL 508.PDF also contains Behavioral Red Flags for individuals and financial red flags.^[2]

Keep all your clients advised about the risks associated with unsolicited contacts by phone, text, or email. Adults should be aware of the “stranger danger” training given to children. Forensic accountants and Private Investigators can help keep your clients safe and secure.

If your clients suspect or are experiencing fraud, call Sage Investigations, LLC at 512-659-3179 for a free 20-minute consultation. Let Sage shed light on the truth for your clients. We look forward to hearing from you and building a solid relationship you can count on. Click to read about the Sage Team and their CVs.

[1] FinCEN Advisory Elder Financial Exploitation FINAL 508 PDF (www.fincen.gov)

[2] Ibid - FinCEN Advisory Elder Financial Exploitation FINAL 508. PDF (www.fincen.gov)