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'Silent Crime' -- Defrauding Elders Grows in Ethnic Communities

Posted: May 18, 2012

SAN FRANCISCO — The sentencing of Edwin Parada in San Francisco this past April for 24 counts of mortgage fraud against Spanish-speaking homeowners spotlighted the growing incidence of “affinity” crimes — those perpetrated by crooks against their own communities.

Parada — who promoted himself as a pastor — got 15 years for his mortgage schemes, which preyed on Latinos in San Francisco, including numerous elders, often with limited English proficiency.

Nationally, fraud against seniors is on the rise, according to the 2011 “MetLife Study of Financial Elder Abuse." In only three years such crimes grew by 12 percent, becoming a $2.9 billion problem.

While in half of the cases the perpetrators were strangers, one-third involved family members or friends. The MetLife study showed that most victims were women in their 80s and living alone.

San Francisco Resources In “Blueprint For Action”
San Francisco has been a major innovator in combating elder abuse since the early 1980s, said Erika P. Falk, director of Geriatric Assessment Services at San Francisco’s Institute on Aging.

For instance, one program has trained more than 500 frontline police officers to intervene in abuse cases in partnership with the nonprofit Casa de las Madres, which helps domestic-abuse victims.

In part officers learn to look for financial wrongdoing when investigating cases of elder physical or mental abuse, and they learn to spot signs of battering or poor care when looking into fraud.

San Francisco is also one of four California cities with a nationally emulated Forensic Center on Financial Elder Abuse. Because so many financial abuse cases fall through the cracks between law enforcement and social services, these centers coordinate efforts among local police, legal services attorneys, social workers, district attorneys, as well as health and mental health professionals able to assess a seniors vulnerability to scams.

Despite San Francisco’s laudable history of creating multidisciplinary units, such as today’s Financial Abuse Specialist Team (FAST), said Falk, “both the city and state are still failing to deal with financial abuse seriously.”

For example, she cited a 2011 survey by the Legal Aid Association of California showing that only half of victims in reported cases were offered nominal advice about financial elder abuse and a third received none at all. Of the Bay Area’s more than 50,000 lawyers, only 29 law firms list financial elder abuse as a specialty.

Falk teamed up with Sarah Hooper of the University of California’s Hasting Law School as part of the San Francisco Financial Elder Abuse Collaboration to produce a two-page “Blueprint for Action” outlining the need to increase the system’s capacity to respond to financial elder abuse cases.

The guide also includes an extensive list of San Francisco resources to deal with financial elder abuse and contacts for both professionals and members of the public.

Ethnic Elders More Vulnerable to Fraud

A 2011 report by the California Elder Justice Coalition (CEJC) found that African American seniors “may be up to five times more susceptible to being cheated financially” than non-blacks. The same study found, “Black and Latino seniors were more than 70 percent more likely to lose their homes to foreclosure between 2007 and 2009.”

For lead author and CEJC coordinator Lisa Nerenberg, the findings point to one troubling fact. “Elders of color,” she said, “have been especially hard hit by predatory lenders.”

Still, despite the alarming figures, financial crimes against elders often go undetected.

“It’s a silent crime,” said Helen Karr, a widely respected special assistant in the San Francisco District Attorney’s (SFDA) office.

As part of national Elder Abuse Prevention Month in May, the SFDA is running a multilingual public awareness campaign about financial elder abuse with ads citywide in English, Chinese, Spanish and Russian.

“It’s so secretive,” Karr continued, “that seniors may not even know they are being abused.” Depression, such as after the death of a spouse, isolation, or perhaps dementia may increase their vulnerability to being victimized.

Others, out of a sense of shame, may feel too foolish to tell anyone after being taken in, or may fear being deported or moved into a nursing home. Again, as in cases of domestic abuse, cheated seniors may also be forgiving of a relative in hopes that the abuse will somehow end.

Financial elder abuse covers a wide range of scams, acknowledges Sean Do, Victim Witness Investigator with the small consumer fraud unit of the San Francisco DA’s office.

“Affinity” Crimes

Most insidious among the 350-400 cases his program fields per year, Do said, are the affinity crimes scammers commit against those who share the same culture and language. Violations, he said, might include home-repair schemes (“I’m from the city” becomes “the city doesn’t pay for this—you have to”), contractors being paid for work they fail to do, mortgage fraud, annuity cons or other insurance scams.

Do came to the West as a refugee from Southeast Asia, finding early work as a physician’s assistant for the International Red Cross. He speaks seven languages and dialects (Vietnamese, Cambodian, Cantonese, Mandarin, French, Danish and English), and is thus in a unique position to understand the heartbreaking experience of many immigrant elders.

A sociologist by training, Do described a common ruse in which seniors are told to pay around $5,000 — always in cash — to an expediter claiming to be able to resolve immigration issues or perhaps to move them up on the Housing Authority’s years-long waiting list for subsidized housing.

“The elder is told to hurry or you’ll lose the opportunity. They are taken to an apartment and told they’ll be living there in about six weeks. But they should not tell anyone,” said Do.

In another typical case Do described, a young woman who frequented a senior center and befriended an older man. One day she asked him for a $1,500 loan to cover the cost of a medical procedure. When he confronted her about not repaying the loan, she said she needed more and eventually bilked him out of $5,200.

Do’s unit focuses on mediation — turning criminal cases beyond possible restitution over to other sections of the DA’s office for prosecution. After finding the woman — and being threatened by her husband — Do says he’s been able to recover $3,000 for the victim so far, with more to come.

He also recommended that senior center staff keep an eye on younger people who turn up and seem to give an unusual amount of attention to certain seniors. The centers always need volunteers, but staff should question the visitor and seniors they focus on to discern whether their interactions are benign.

Don’t Give In to Fears

When Do speaks to neighborhood groups, he urges seniors never to let their fears get the better of them and to talk to a community social worker or other trustworthy source before giving money to anyone.

Also, he said, seniors who get threatening calls from a collection agency should first refuse to give callers information, such as their name and Social Security number — key to identity theft.

Second, he said, they should tell an aggressive caller to send a letter explaining the debt — something collectors can only do if they already have a person’s correct name and address.

Sometimes the collection agency is legitimate, but is calling for an amount owed due to identity theft. Do’s office mediates with the agency and the elder’s bank to get the problem resolved.

In California, such financial scams hitting seniors rose by 33 percent from 2006-2011, according to Erika P. Falk, director of Geriatric Assessment Services at San Francisco’s Institute on Aging.

Falk said that of the 70,000 elder abuse cases -- ranging from battering to denial of food and medication -- reported in California in 2010, a quarter involved financial abuse. The actual number of such cases, she added, is likely as high as 300,000.

“Victim Blaming” Leads to Poor Enforcement

Even though the Golden State has long pioneered the development of stringent elder abuse laws and programs, a key reason for poor reporting of fraud cases is “victim blaming,” emphasized CEJC’s Nerenberg.

“There are biases in the system,” she said. The author of Elder Abuse Prevention: Emerging Trends and Promising Strategies, Nerenberg asserted that family members and service providers “often think these people made bad choices.”

Seniors, especially those of color, Nerenberg explained, tend to be stereotyped as having been taken financially out of vulnerability to promises or greed for rewards offered by scammers.

“But this is a crime,” she stressed. “Financial elder abuse is often perpetrated by sophisticated, skilled and determined scammers.” Many are tied to organized crime, Nerenberg said. Because the same people are often victimized multiple times — due to their trusting nature, extreme isolation and sometimes dementia — they turn up as easy marks on “mooch lists” that crooks develop for their crime rings.

Even when perpetrators are caught, law enforcement authorities too frequently fail to require restitution, Nerenberg said. “They assume the money is gone, but these are not always deadbeats.” When prosecutors push for restoration and judges order investigations, perpetrators are often found to have substantial hidden assets.

California, she urged, should emulate a Delaware program that pays restitution to defrauded seniors immediately following a conviction, so the elderly person does not have to wait an extended period to see lost money needed to get by. The state then keeps recovered amounts.

Nerenberg added that service agencies and authorities also frequently shrug off possible cases because they assume ethnic families care for their elders well and aren’t apt to cheat them knowingly.

“People don’t necessarily take care of their own,” noted Nerenberg, “and communities of color are especially under strain because of the recession.”

As for keeping up with the perpetrators, Nerenberg said, “Financial elder abuse criminals continually adapt their scams to changing legal barriers and opportunities.” Authorities, she stressed, need enough flexibility in the law and diligence on the ground to keep up.

Those in San Francisco concerned about financial abuse should call the consumer fraud program in the S.F. District Attorney’s Office, at 415-551-9595. For other resources, see the sidebar to this article.

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