so, thank you. all right, thank you. andre, david, ed, tony, lanny. and, now, if, if other than david, if you don't mind, allow our panelists to come up to the stage. we can begin with the next portion of our summit. ladies and gentlemen, the next portion of the summit will be a panel on fraud on the elderly. the moderator will be michael bloom, director of the consumer branch of the civil division. panelists, david vladic, you heard from, elizabeth koesel

director of state affairs of aarp, naomi carp, association of older americans, deputy jay rush, fraud section of the criminal disvision department of justice, jeffrey stieger senior litigation counsel consumer protection branch, civil division, department of justice. and, abby kuzma, from the office of the indiana attorney general. with that i give you michael bloom, our moderator, thank you. >> thanks, folks. good afternoon. it, it, this panel -- i suspect will be very interesting and informative. let's just get right to it. we are going to talk about fraud directed at the elderly. and seems to be a natural question is, why do we have a special -- panel on fraud on the

elderly? and, there is research that concerns particular vulnerabilities that older folks may have that make them more susceptible than others to certain kinds of fraud. i would look to start then with betsy, about some of the research that the aarp may have done concerning those kinds of vulnerabilities. if you give us, some of those, those, factors that make older folks more vulnerable, perhaps to the frauds we have been talking about so far today. >> it's on. okay. i want first to put it in perspective. it's, there are not a great many statistics about how many elderly are victimized. but we know that -- elderly financial abuse is dramatically maybe 24 people are victimized for every one that's reported to any kind of a criminal or social

service agency. and it's probably the most pervasive form of elderly abuse and mistreatment among new york did a survey of people who were 60 and older and 41 out of 1,000 had suffered this type of abuse. and this didn't include people who were cognitively impaired. they surveyed older people and their children and found that 20% of those over 65 had been taken advantage of financially through unreasonably high fees or outright fraud. the lawyers for civil rights shows that 45% of scam victims were over 50, and they included 41% of the losses with these foreclosure rescue scams.

one thing we'd like, which we have not been able to research. it just hasn't been out there, better statistics on this. metlife had a report where they estimated at least almost $3 million -- billion, excuse me, had been lost, and that 51% of it was embezzled by strangers and 34% by family, friends, people in the same church or neighbors, people they knew. and i'm looking forward to the business opportunity fraud because a lot of older people have lost their jobs, and they've been unemployed longer than they've ever been before, so we have done research and i'm -- my friend naomi karp is going to talk about one of the reports because although she was stolen, she did work at aarp and basically wrote the report. it's called protecting older investors, the challenge of diminished capacity. it's out there in the hall. both the whole report and then

if you just want a short version of it, that's also there. and it surveyed and summarized some of the data and tried to find out what financial advisers those dealing with clients directly and the compliance officers and how they tried to handle the problem on the investment side. and i know that naomi will carry this further. i don't always have good news to bring you. we had a very well-designed project that came out of the west virginia office where they bought these sucker lists, these are the same -- i don't know where they come from. that's certainly something that should be investigated. i know there used to be the new widows list but i think they're much broader now. these aarp volunteers were given these sucker lists. they called people one to one

and spent time trying to train them to resist telephone fraud, stranger fraud, and they tried various messages and found the one that seemed to work the best was giving them a strategy to respond at each step of the fraud. and they did try -- this is a very -- took a lot of people to do this. this was an expensive thing to do even though we were using volunteers. and they wanted to see if they could teach those on the phone to resist scammers. they did find that compared to a control group two weeks later when there was a pretend scammer calling them up they were more resistant. unfortunately, six months later, they weren't. there was no longer a difference between these groups, so we clearly have to keep educating

people. we have to educate the families and the communities in addition but we also have to try as all these people are doing to stop the frauds before they get there because many of these people just do not know how to resist it. and i think that, you know, one of the issues that we've had is that it's not only people when they have diminished compaapaci the first thing that tends to go is their ability to handle their financial affairs. at least people with sort of pre-alzheimer's disease. there seems to be something, and there hasn't been much research on this, about being more trusting. but it's hard because there are some people that seem very resistant to this. i was just reading "the washington post" yesterday and i

think john kelly said this best. he's talking about a green scam but green does not mean go for it and he starts out -- he does the usual, if it sounds too good to be true, it is. i've been doing that for 30 years. doesn't always work. and says when a stranger calls to say you won something, you haven't. tamp down that flutter of excitement, listen to the voice that says, why would somebody call you out of the blue to tell you you've won a sweepstakes you didn't even remember entering? sadly enough people listen to the other voice, the one that says, why shouldn't dumb luck smile upon me once in a while? do i not deserve the universe's love? and the scammers make a decent living. we have a real issue in terms of trying to prevent it other than through the great work of law enforcement. >> and that raises the question, why would it be -- and i give this to you, naomi, why would it be that older fakes may say why doesn't dumb luck shine on me,

something about them, perhaps, that you've looked into it, betsy talked about some of the research you've done. why would older folks think that perhaps more so than others? >> thanks, and it's a pleasure to be here. i guess i want to talk a little bit generally about that question, why are older people targeted and why are they particularly vulnerable, and then zero in a little bit more on what betsy mention ed about diminished capacity and the research we've done. so the research really shows there are quite a number of reasons older people are targets of fraud and financial exploitation. they include -- i mean, this is pretty basic. they're the people who hold the largest portion of the wealth in our country, so even though individually many of them may be poor, that's where the money is and that's where the scammers go. it may be that they are more trusting and that they are more unsophisticated about financial matters. there's often a presumption that

they are more vulnerable and, thus, they're targeted because they are perceived as being more vulnerable. and they may, in fact, be more vulnerable due to cognitive impairments. also older people are more isolated and, thus, more dependent on helpers of a whole variety and those helpers have great access to their money and to their documents. so these are crimes of opportunity. so just to zero in for a minute on diminished capacity because i think with the age boom and with people living longer, more and more people are having cognitive impairment and we have family members, the financial services industry, all kinds of industries and professions saying, oh, my god, we have this coming. we don't really understand it and what are we going to do

about it? so capacity -- decision making capacity is really not an all or nothing thing. it's made up of a number of types of capacity. we have capacity to make personal decisions about your everyday life, capacity to make health care decisions, and then capacity to make decisions about financial transactions. and what we've learned, as betsy said, is that financial capacity that's been called the canary in the coal mine of capacity, it's really the first to go. and it's made up of a number of skills. it includes your basic monetary abilities, identifying and counting money, understanding debt and loans, conducting cash transactions, paying bills, and then i want to underline this last one because this neuropsychologists have done research and identified this, one component of financial capacity is maintaining judgment to act prudently and avoid financial exploitation. so you can see when financial

capacity starts to go, people become more vulnerable and the population numbers, not to throw a lot of numbers at you, but they're pretty astounding. declining financial skills start to happen when people have mild cognitive impairment, not even full-blown alzheimer's disease. those 71 and older have mild cognitive impairment, so that's a lot of people. one out of eight people 65 and older has full-blown alzheimer's disease, so we can see where this is going. so let's just bring it closer to home with an example. dad seems fine. he's still handling his bank account, his brokerage accounts, and then the bank teller sees him perhaps making sudden and uncharacteristic large withdrawals or having multiple overdrafts or the broker is getting calls to cash in his conservative investments and to

buy shares in a risky startup that he just heard about from his new best friend. so we all know and many of us have had personal experience that it's really hard to take away the car keys when dad's reflexes are getting slow or his vision declines. but one day we fear that dad's car will hit a child crossing the street, and so we do something about it. similarly we don't want to take away mom's financial driver's license. and then we see mom being taken by a lottery scheme, buying an inappropriate annuity after attending a free lunch seminar, or getting ripped off by her home care aide. so you can see that we have a huge challenge. i'll just talk really quickly about the research at aarp public policy institute that about betsy talked about. it was in the investor sphere but we surveyed frontline

financial advisers, broker/dealers and their compliance officers about do they understand diminished capacity, do they see it as a problem? do they have protocols in their firm to deal with it? are they worried about financial exploitation? what do they need? and the message was loud and clear, yes, they see it as a problem. almost all of them recognized it. some of them have protocols but their protocols were all over the map. they overwhelmingly said we need training on 0 diminished capacity. it should be mandatory but our firms don't require it. so i think it's interesting that there's a recognition but yet we don't have the tools yet and we're going to all have to start working together to create them. >> one of the scams you mentioned was the lottery scam. jeff steger in my office has done some work in lottery

schemes as have others. can you talk about what a lottery scam is and a focus on how the scammers used some of their vulnerabilities that both betsy and naomi talked with about, have they use that had to their advantage to steal money? >> sure. as a prosecutor with the cons e consumer protection branch, we're currently participating in a number of investigations involving lottery scams that are emanating from jamaica and preying on citizens in the u.s., mainly elderly people. essentially the scammers will call potential victims in the u.s. including many elderly people and inform the potential victim they have won cash and prizes, sometimes cash and a mercedes, typically a car. but mostly money. we're talking about millions of dollars that these people are told they won. and indicate the winnings will only be delivered if the

individuals pay up-front fees, taxes, or insurance. victims end up sending the money through wire transfers, through entities david mentioned earlier, through western union, through money dpram, through stored value cards, the green dot card that betsy mentioned. and that money ultimately will be sent down to jamaica. our office is currently in the middle, as i mentioned, involved in a number of investigations. i just want to give a profile of -- profiles of five recent victims that we have talked to meaning within the last couple of weeks, and i'm going to be generic because these are ongoing criminal investigations. one is a female, early 70s. she was working at the time. she was living alone. received a call that she had won a sweepstakes prize of $3

million to $5 million. during the conversation, the initial conversation, the fraudster was most interested in knowing from her what it felt like to win the lottery and that was essentially to gain her trust. over time they had many conversations, many e-mails. he was able to get her trust, and she ended up sending tens of thousands of dollars and wiring tens of thousands of dollars which ultimately, we believe, ended up in jamaica. a second victim, a female, in her late 80s living at home alone in a small town, she acknowledged that she entered sweepstakes at times. she was called at least 12 times in a two and a half week period, and she ended up wiring money to them. a third victim, a male in his late 70s, early 80s, he was a widower. lived alone in a small town.

he was an owner of a small business during his career and, you know, he was a victim of this time of lottery scam. a fourth victim, a female in her 70s, lives in a small town, lived alone, acknowledged she entered sweepstakes such as publisher's clearing house and she was victimized by multiple groups over a period of several months, and she wired money to them. she got suspicious after she didn't get her winnings, but they offered her an excuse saying that because her fees were not coming in as quickly as they had anticipated that her winnings were being delayed and that's how she continued to be caught up in this scam. and finally a fifth victim, a female in her early 70s, again, lived in a small town, they sent her a check to purportedly pay

the fees, that this was going to be an advance. she deposited the check and she immediately or shortly thereafter with drew the money from the check and sent it out. the check bounced and so she was out that money. to put a little more meat on this profile, these people that we've been talking to most recently, they are elderly but they're not in their 90s. they're not in nursing homes. they typically live alone. they're independent. they have some disposable income but not a huge amount. so after a couple weeks when their disposable income is gone, it's not unusual that they would take out a loan on their house or, more typically or typically they would take a cash advance on credit cards. to talk about their profile a

little bit more, these scammers who, at least in these investigations, are from jamaica, they will call these individuals more than perhaps their family members will call them. >> jeff, let me stop there. that's something i was going to ask jonathan about. what's striking or what is common about all these individuals is they are living alone and that perhaps part of what the draw is to these folks is they have somebody to talk to and that goes to impostor frauds that i know you may have heard of this, different flavors of it, so to speak. jonathan, can you talk about impostor frauds, what they are and also talk a little bit about your work internationally. as jeff said all this money is being wired internationally and it sounds like perhaps there are frauds around the world that are similar to ours and can confirm what we do. >> thanks, mike. first impostor frauds and then as mike suggested talk about the broader ramifications of the

types of mass marketing fraud that our section and several u.s. attorney's offices as well as our federal investigator agency partners have been working on. impostor frauds can fall into a couple of different categories. one of them, which has gotten a lot of currency lately among hard core fraudsters is known simply as the grandparent scam. we first heard about this several years ago in japan where -- and the m.o. for this is fundamentally the same as we now hear about today in the united states. people get lists of others, typically senior citizens, although they may be calling these people cold, and when the phone rings and that person picks up at the other end of the phone the person says, it's me. and depending on whether they know they're calling an older person, obviously it won't work in every single instance but

oftentimes the person will say, if it happens to someone in the united states, johnny, is that you? that's all they need. yes, grandma, it's me. i've been arrested. i'm here in -- fill in the country. i'm here this france. i'm here in the netherlands. i need bail money. can you possibly wire me some bail money? or, i've been in an accident. i need money. i have to pay the hospital. can you just send some money to me right away? naomi and beth touch on different kinds of vulnerabilities that may stem more from neurobiology, these types of scams would play on the heart strings of anybody who makes a mistake and never anticipates the possibility somebody would be calling them up with the specific purpose of lying from the very first words of the conversation to get money

from them. so they respond in the way they think they need to to help out their loved one, grandson, whoever, and only later on do they find out the $1,000, $1,500 they just wired somewhere didn't go to their grandson. it went in the pockets of fraudsters. and as for other types of impostor scams, the grandparent scam is a variation on things we've seen increasingly, not just in the united states but from other venues around the world. about ten days ago the royal canadian mounted police made arrests in the montreal area of several individuals who were engaged full time in the grandparent scam specifically targeting older americans. now, why is it that they would be doing this? well, first of all, for a long time u.s. law enforcement has recognized that there's been a

two-way trade, you might say, in fraud between the u.s. and canada. going back as far as 1998, a series of regional task forces were set up across canada with u.s. and canadian participation to work. telemarketing fraud and other types of mass marketing fraud on a collective basis. and all of our major partners and consumer fraud ranging from the federal trade chigs to the fbi the postal inspection service, the secret service, have all participated in different ways in these task forces. the frame of reference has changed. now when jeff talks about lottery fraud, note he didn't say as we might have a number of years back, south florida or southern california, now it's costa rica, jamaica, the dominican republic, and farther afield, spain, and other parts of the world. now, in part because we have seen and assistant attorney general brewer's remarks

highlighted this as well, as we have seen the globalization of crime in general, we've seen the globalization of fraud including the globalization of techniques. when we first started to compare notes with our law enforcement colleagues going back four, five years ago in australia, canada, the united kingdom, and even nigeria, we started to find that we were talking about the same kinds of scams with the same kinds of techniques targeted against the same kinds, in many instances of senior populations often as well by the same groups of people. so part of what we sought to do, and i think it's fair to say that mike's office, fraud section, multiple u.s. attorneys have focused on this particularly. what we're trying to do is take our ability to respond to these types of frauds directed at older americans to the next level where we share information with each other about who from r