The Golden FleecingThe Golden Fleecing Bar Harbor Geriatrics ConferenceBar Harbor Geriatrics Conference

June 10, 2010June 10, 2010

Rick Mooers, LSW Adult Protective ServicesRick Mooers, LSW Adult Protective Services

Detective Seth Blodgett, Office of Attorney GeneralDetective Seth Blodgett, Office of Attorney General

DisclosureDisclosure

The presenters DO NOT have an interest in selling a The presenters DO NOT have an interest in selling a technology, program, product, and/or service to CME/CU technology, program, product, and/or service to CME/CU professionals.professionals.

Rick Mooers and Seth Blodgett have nothing to disclose Rick Mooers and Seth Blodgett have nothing to disclose with regard to commercial relationships.with regard to commercial relationships.

The content of this presentation does not relate to any The content of this presentation does not relate to any product of a commercial interest.product of a commercial interest.

Therefore, there are no relevant financial relationships to Therefore, there are no relevant financial relationships to disclose.disclose.

OBJECTIVESOBJECTIVES

Participants will be able to:Participants will be able to:1.1. Identify several of the frauds, scams, and means of exploitation Identify several of the frauds, scams, and means of exploitation perpetrated against older citizens.perpetrated against older citizens.

2. Explain why older citizens are prime targets of financial abuse.2. Explain why older citizens are prime targets of financial abuse.

3. Explain the difference between the willing, the vulnerable, and 3. Explain the difference between the willing, the vulnerable, and the incapacitated victim.the incapacitated victim.

4. Identify potential remedies and protective measures one may 4. Identify potential remedies and protective measures one may pursue to avoid further or future loss.pursue to avoid further or future loss.

Why Older CitizensWhy Older Citizens

70% of the Nation’s wealth is in the 70% of the Nation’s wealth is in the hands of people over the age of 50hands of people over the age of 50

Great creditGreat credit No overwhelming debtNo overwhelming debt Live aloneLive alone Different value system, very trustingDifferent value system, very trusting LonelyLonely

The WillingThe Willing

Who are the willingWho are the willing?? Lets Make a Deal folksLets Make a Deal folks Bargain HuntersBargain Hunters Easy fix to $ problems FolksEasy fix to $ problems Folks Something for Nothing FolksSomething for Nothing Folks You and Me?You and Me?

Everyday OccurrencesEveryday Occurrences

You put your money in, you pull the You put your money in, you pull the lever, two candy bars drop down lever, two candy bars drop down instead of one! What do you do?instead of one! What do you do?

You find extra change in the coin return You find extra change in the coin return slot. Do you put it back in the machine?slot. Do you put it back in the machine?

$.25 per ½ hour to park. You find extra $.25 per ½ hour to park. You find extra time on a meter. Do you put your $.25 time on a meter. Do you put your $.25 in?in?

Everyday OccurrencesEveryday Occurrences

Under 12, half price!!!Under 12, half price!!! Subscription expires and the Subscription expires and the

magazines keep coming. Do you send magazines keep coming. Do you send them back?them back?

It’s a big company, they won’t miss it!It’s a big company, they won’t miss it! Ever fudge on your taxes?Ever fudge on your taxes? What happens when a store clerk What happens when a store clerk

makes a mistake in your favor?makes a mistake in your favor?

FRAUDS AND SCAMSFRAUDS AND SCAMS

Weapons utilized:Weapons utilized: Internet – Sale of products where the Internet – Sale of products where the

purchaser sends a check for more than the purchaser sends a check for more than the purchase price, asking for the balance be purchase price, asking for the balance be sent back. The check is usually worthless.sent back. The check is usually worthless.

Phone – Notice of lottery winnings and you Phone – Notice of lottery winnings and you only need to pay a security fee to obtain $only need to pay a security fee to obtain $$.$.

FRAUDS AND SCAMSFRAUDS AND SCAMS

Weapons Continued:Weapons Continued: Mail – Solicitation of personal identifying Mail – Solicitation of personal identifying

information used to steal your identityinformation used to steal your identity Free check – Asks you to deposit free of Free check – Asks you to deposit free of

charge….yours to keep. What is on that charge….yours to keep. What is on that deposited check when returned to point deposited check when returned to point of origin? Bank name, routing number, of origin? Bank name, routing number, account number, etc.account number, etc.

FRAUDS AND SCAMSFRAUDS AND SCAMS

TYPES of FRAUD:TYPES of FRAUD: Home EquityHome Equity

Reverse MortgagesReverse Mortgages Home repair and improvementHome repair and improvement

DrivewaysDriveways Chimney repairChimney repair PorchesPorches

FRAUDS AND SCAMSFRAUDS AND SCAMS

Types Continued:Types Continued: Telemarketing Fraud – $200 Billion lost Telemarketing Fraud – $200 Billion lost

each year to fraudulent telemarketers.each year to fraudulent telemarketers. Products offered are of less quality than Products offered are of less quality than

promisedpromised Seek personal information from you.Seek personal information from you.

Mail Fraud:Mail Fraud: You’ve won!You’ve won! Send processing feeSend processing fee Send personal informationSend personal information

FRAUDS AND SCAMSFRAUDS AND SCAMS

Types Continued:Types Continued: Health FraudHealth Fraud

Dangerous products/promisesDangerous products/promises No physician involvedNo physician involved $100 Billion lost annually $100 Billion lost annually

Investment and Securities FraudInvestment and Securities Fraud Free LunchFree Lunch Alyson Cummings, Securities Investment Alyson Cummings, Securities Investment

EducatorEducatorMaine Office of Securities: 207-624-8551Maine Office of Securities: 207-624-8551

The VulnerableThe Vulnerable

Who are the VulnerableWho are the Vulnerable?? Over 60Over 60 Fixed IncomeFixed Income Medically/Physically CompromisedMedically/Physically Compromised Live Alone/LonelyLive Alone/Lonely Lack resources or services Lack resources or services

Undue InfluenceUndue Influence

……..is an equitable doctrine that involves ..is an equitable doctrine that involves one person taking advantage of a one person taking advantage of a position of power over another person. position of power over another person.

Free will to bargain is not possible.Free will to bargain is not possible.

(Wikipedia)(Wikipedia)

Undue Influence in Contract Undue Influence in Contract LawLaw

If undue influence is proved in a If undue influence is proved in a contract, the contract is voidable by contract, the contract is voidable by the innocent party and the remedy is the innocent party and the remedy is rescission.rescission.

Categories:Categories: Presumed Undue InfluencePresumed Undue Influence Actual Undue InfluenceActual Undue Influence

M.R.S.A. 33M.R.S.A. 33§1022 Undue §1022 Undue InfluenceInfluence

Improvident Transfer of Real EstateImprovident Transfer of Real Estate Transfer for less than full considerationTransfer for less than full consideration Dependent on others to a person with Dependent on others to a person with

whom elder had a confidential/fiduciary whom elder had a confidential/fiduciary relationshiprelationship

Not represented by independent counselNot represented by independent counsel Undue influence is presumed and must be Undue influence is presumed and must be

rebutted by beneficiary of transfer.rebutted by beneficiary of transfer. Failure to rebut = rescission.Failure to rebut = rescission.

Presumed Undue InfluencePresumed Undue Influence

A class of relationships that, as a matter of A class of relationships that, as a matter of law, will raise the presumption:law, will raise the presumption: Parent/childParent/child Guardian/wardGuardian/ward Priest/ member of parishPriest/ member of parish Doctor/patientDoctor/patient

In such cases, the onus of proof rests with the In such cases, the onus of proof rests with the person in the power position to disprove the person in the power position to disprove the presumption of undue influence.presumption of undue influence.

Actual Undue InfluenceActual Undue Influence

Where there is no presumption of Where there is no presumption of undue influence but, there IS undue influence but, there IS evidence that the power was evidence that the power was unbalanced at the time of the signing unbalanced at the time of the signing of the contract.of the contract.

ProbateProbate

Undue influence is the most common Undue influence is the most common ground sought for the contesting of a ground sought for the contesting of a Will and a challenge of capacity usually Will and a challenge of capacity usually is the basis of the contest.is the basis of the contest.

In litigation, most jurisdictions place the In litigation, most jurisdictions place the burden of proving undue influence on burden of proving undue influence on the person/party challenging the will.the person/party challenging the will.

Undue Influence, Fraud, & Undue Influence, Fraud, & DuressDuress

Undue InfluenceUndue Influence is only an issue when is only an issue when the party in the power position realizes a the party in the power position realizes a benefit. (Advisor/testator)benefit. (Advisor/testator)

When the party in the power position When the party in the power position (Advisor) is getting a benefit for someone (Advisor) is getting a benefit for someone else, it would be considered else, it would be considered fraudfraud..

DuressDuress consists of the intentional use of consists of the intentional use of force, or the threat of force to coerce force, or the threat of force to coerce someone into a grossly unfair transaction.someone into a grossly unfair transaction.

Elements of Undue Elements of Undue InfluenceInfluence

Four elements must be shown to Four elements must be shown to establish undue influence:establish undue influence:

First: It must be demonstrated that the First: It must be demonstrated that the victim was susceptible to overreachingvictim was susceptible to overreaching Mental, psychological, or physical disability or dependency Mental, psychological, or physical disability or dependency

may be used in identifying susceptibility.may be used in identifying susceptibility.

Elements of Undue Elements of Undue InfluenceInfluence

Second: There must be an opportunity Second: There must be an opportunity for exercising undue influencefor exercising undue influence

Opportunity usually arises through a confidential Opportunity usually arises through a confidential relationshiprelationship

Husband and wifeHusband and wife Parent and childParent and child Doctor and patientDoctor and patient Trustee and beneficiaryTrustee and beneficiary Attorney and clientAttorney and client

Elements of Undue Elements of Undue InfluenceInfluence

Third: There must be evidence that Third: There must be evidence that the person suspected was inclined to the person suspected was inclined to exercise undue influence over the exercise undue influence over the victimvictim

Aggressively initiates a transactionAggressively initiates a transaction Insulates the relationship from outside supervisionInsulates the relationship from outside supervision Discourages victim from seeking outside adviceDiscourages victim from seeking outside advice

Elements of Undue Elements of Undue InfluenceInfluence

Fourth: The record reveals a Fourth: The record reveals a suspicious transaction.suspicious transaction.

Will abruptly changesWill abruptly changes Real estate transfersReal estate transfers Large withdrawals from $$$ accountsLarge withdrawals from $$$ accounts

Determining Undue Determining Undue InfluenceInfluence

Courts determine undue influenceCourts determine undue influence Cognitive assessments will not reveal Cognitive assessments will not reveal

the presence of undue influence.the presence of undue influence. Courts will look at:Courts will look at:

Transaction took place at appropriate timeTransaction took place at appropriate time Transaction took place in appropriate settingTransaction took place in appropriate setting Was there pressure to act quicklyWas there pressure to act quickly Discouraged from seeking advice from othersDiscouraged from seeking advice from others Relationship between the partiesRelationship between the parties ““Fairness” of the transactionFairness” of the transaction

I.D.E.A.L. ProtocolI.D.E.A.L. Protocol

Protocol developed by:Protocol developed by: Bennett Blum, M.D. Forensic and Bennett Blum, M.D. Forensic and

Geriatric PsychiatryGeriatric Psychiatry Tom Feledy, M.B.A., San Francisco Tom Feledy, M.B.A., San Francisco

Police DepartmentPolice Department

““I”I”

““I” is for IsolationI” is for Isolation This refers to isolation from pertinent This refers to isolation from pertinent

information, friends, relatives, advisors, etc.information, friends, relatives, advisors, etc. Causes:Causes:

Medical disordersMedical disorders Poor relationshipsPoor relationships Interference by perpetratorInterference by perpetrator GeographyGeography Technology, i.e. telephone, computer, television, Technology, i.e. telephone, computer, television,

hearing aidshearing aids

““D”D”

““D” is for DependencyD” is for Dependency This refers to dependence on the This refers to dependence on the

perpetratorperpetrator CauseCause

Supplanting current supports or services with self, Supplanting current supports or services with self, i.e.i.e.

Physical supportPhysical support Emotional supportsEmotional supports InformationInformation

““E”E”

““E” is for Emotional manipulation or E” is for Emotional manipulation or exploitation of a vulnerabilityexploitation of a vulnerability Manifests as promises, threats, or both Manifests as promises, threats, or both

regarding:regarding: SafetySafety Alcohol to an alcoholic Alcohol to an alcoholic SecuritySecurity Vision impaired to sign Vision impaired to sign

docs.docs. CompanionshipCompanionship Diminished capacity mis- Diminished capacity mis-

representationrepresentation *Easiest emotion to manipulate is………….?*Easiest emotion to manipulate is………….?

““A”A”

““A” is for AcquiescenceA” is for Acquiescence This refers to the victim’s apparent This refers to the victim’s apparent

consent, submission, or willingness to consent, submission, or willingness to accede to the requests/demands of the accede to the requests/demands of the perpetrator.perpetrator.

““L”L”

““L” is for LossL” is for Loss This refers to financial loss in cases This refers to financial loss in cases

involving monetary assetsinvolving monetary assets This refers to physical harm in cases This refers to physical harm in cases

involving violence.involving violence.

The IncapacitatedThe Incapacitated

Who are the incapacitated?Who are the incapacitated? Incapacitated adult.Incapacitated adult.  "Incapacitated adult"   "Incapacitated adult"

means any adult who is impaired by reason of means any adult who is impaired by reason of mental illness, mental deficiency, physical mental illness, mental deficiency, physical illness or disability to the extent that that illness or disability to the extent that that individual lacks sufficient understanding or individual lacks sufficient understanding or capacity to make or communicate responsible capacity to make or communicate responsible decisions concerning that individual's person, decisions concerning that individual's person, or to the extent the adult can not effectively or to the extent the adult can not effectively manage or apply that individual's estate to manage or apply that individual's estate to necessary ends. 22-MRSA Ch. 958 necessary ends. 22-MRSA Ch. 958 §3472§3472

The IncapacitatedThe Incapacitated

There are various legal and There are various legal and administrative relationships that can administrative relationships that can be effected to assist an incapacitated be effected to assist an incapacitated person; both prior to incapacity and person; both prior to incapacity and following a finding of incapacity:following a finding of incapacity: Representative PayeeRepresentative Payee Durable Power of AttorneyDurable Power of Attorney Guardian and/or ConservatorGuardian and/or Conservator

The IncapacitatedThe Incapacitated

Surrogate via the Uniform Health Care Surrogate via the Uniform Health Care Decisions Act. 18-A, MRSA Decisions Act. 18-A, MRSA §5-805§5-805

It is through these mechanisms that a It is through these mechanisms that a confidential and/or fiduciary relationship confidential and/or fiduciary relationship is created between the principle and the is created between the principle and the agentagent

TITLE 22 TITLE 22 §3472 DEFINITIONS§3472 DEFINITIONS

Exploitation:Exploitation: The illegal or improper use of an The illegal or improper use of an

incapacitated adult or his resources for incapacitated adult or his resources for another’s profit or advantage.another’s profit or advantage.

Indicators of ExploitationIndicators of Exploitation

Change in representative payee, Power of Change in representative payee, Power of Attorney, WillAttorney, Will

Elder doesn’t know what happens to their Elder doesn’t know what happens to their moneymoney

Checks no longer come to the houseChecks no longer come to the house Victim reports signing papers and doesn’t Victim reports signing papers and doesn’t

know what was signedknow what was signed Sudden, excessive gifting absent a Sudden, excessive gifting absent a

historical patternhistorical pattern

Indicators of ExploitationIndicators of Exploitation

Unexplained disappearance of funds Unexplained disappearance of funds or valuablesor valuables

Dependent relationshipDependent relationship Transfer of property or savingsTransfer of property or savings Excessive payment for care and/or Excessive payment for care and/or

servicesservices Victim is unaware of income amountVictim is unaware of income amount

Applicable LawsApplicable Laws

Misuse of Entrusted Property (M.R.S.A. Title Misuse of Entrusted Property (M.R.S.A. Title 17-A, 17-A, § 903, Class D)§ 903, Class D)

Endangering the Welfare of a Dependent Endangering the Welfare of a Dependent Person (M.R.S.A. Title 17-A, § 555, Class D)Person (M.R.S.A. Title 17-A, § 555, Class D)

Theft by Misapplication of Property (M.R.S.A. Theft by Misapplication of Property (M.R.S.A. Title 17-A, § 358, Class B, C, D, E based on $$Title 17-A, § 358, Class B, C, D, E based on $$$)$)

Theft (M.R.S.A. Title 17-A, § 353)Theft (M.R.S.A. Title 17-A, § 353)

These are THEFT cases!!!These are THEFT cases!!!

Difficulties with Difficulties with InvestigationsInvestigations

Vulnerability to “Undue Influence”Vulnerability to “Undue Influence” Family Relationships, DependencyFamily Relationships, Dependency Suspect has control of finances, Suspect has control of finances,

recordsrecords Diminished mental capacity of the Diminished mental capacity of the

victimvictim

““Civil” MindsetCivil” Mindset

Many times, the victim will have willingly Many times, the victim will have willingly signed financial documents such as signed financial documents such as checks, property transfers, etc. If they checks, property transfers, etc. If they didn’t understand what they were signing, didn’t understand what they were signing, it does not make it any less a crime.it does not make it any less a crime.

““Durable Power of Attorney” doesn’t give Durable Power of Attorney” doesn’t give the agent a right to use assets as their the agent a right to use assets as their own.own.

These are THEFT cases!!!!These are THEFT cases!!!!

Potential Remedies and Potential Remedies and ProtectionsProtections

Demand an attorney or accountant review Demand an attorney or accountant review all financial accountsall financial accounts

Require two signatures on all accountsRequire two signatures on all accounts Set up periodic meetings to review all Set up periodic meetings to review all

accounts (with bank, accountant, attorney)accounts (with bank, accountant, attorney) Check Registry of Deeds from time to time Check Registry of Deeds from time to time

to ensure no transfers have taken placeto ensure no transfers have taken place Are there any new PoA’s?Are there any new PoA’s? Have any joint tenancy accounts been Have any joint tenancy accounts been

established?established?

Potential Remedies and Potential Remedies and ProtectionsProtections

Have your bank “flag” accounts to Have your bank “flag” accounts to raise awareness regarding all raise awareness regarding all transactions.transactions.

Close existing account(s) and open Close existing account(s) and open new one(s) requiring two signaturesnew one(s) requiring two signatures

ResourcesResources

Area Agencies on Aging: 1-877-ELDERS-1Area Agencies on Aging: 1-877-ELDERS-1 Legal Services for the Elderly: 1-800-537-Legal Services for the Elderly: 1-800-537-

60666066 Office of the Attorney General: 626-8531Office of the Attorney General: 626-8531 Adult Protective Services: 1-800-624-8404Adult Protective Services: 1-800-624-8404 rick.mooers@maine.gov 207-667-1601 207-667-1601 Seth.blodgett@maine.gov 207-626-8531 207-626-8531 Http://www.scambusters.org Http://nclnet.org/shoppingonlineHttp://nclnet.org/shoppingonline

Thank youThank you

There’s a little larceny in all of us……There’s a little larceny in all of us……

W.C. FieldW.C. Field

Is There?Is There?

We all hope to become the We all hope to become the

person we always person we always knew knew we we

could be………..could be………..

BibliographyBibliography

WikipediaWikipedia Getting Older, Getting FleecedGetting Older, Getting Fleeced, Pamela , Pamela

CamilleCamille The New DictionaryThe New Dictionary National Center on Elder AbuseNational Center on Elder Abuse Inspector Tom Feledy, M.B.A.Inspector Tom Feledy, M.B.A.

Tel: 415-553-1530Tel: 415-553-1530 Bennett Blum, M.D.Bennett Blum, M.D.

Http://www.bennettblummd.com Tel: 520-750-8868Tel: 520-750-8868