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RIVERSIDE, CA — Four men were recently arrested in Southern California on charges that they targeted the elderly in a massive securities fraud scheme. The investment groups they represent collected at least $144 million from 800 seniors, according to the Riverside District Attorney’s office and the Securities and Exchange Commission (SEC) (North County Times, July 2, 2004).
Charges against the defendants include elder abuse, selling unqualified securities, grand theft, and burglary. They had selected seniors from mailing lists and invited them to free lunches, retirement workshops, and consultations. The elderly victims were then conned out of their savings through the sale of notes that were neither safe nor secure, an SEC complaint alleges. The complaint also states that the investment group made false promises that the notes would provide guaranteed returns and liquidity.
Mailing lists and “free” lunches are only two ways that a con artist can gain the confidence of some of our senior citizens. Dishonest telemarketers cheat one out of six consumers every year for a total of $40 billion annually. About 80% of their victims are the elderly, according to the American Association for Retired People (AARP).
Phony telemarketing has been used successfully to effect investment fraud, credit card fraud, lottery scams, and identify theft. Identity theft is when the scam artist uses the senior’s name, often through stealing a social security number or credit card, to purchase goods or obtain money.
Why are the elderly more vulnerable to telemarketing and other types of financial fraud? Some believe the elderly are more likely than others to answer their telephones and trust the stranger on the other end of the line. If they are lonely, these seniors may tend to view salespeople as new friends and confidants. Con artists single out the elderly and prey on this trust.
Also, seniors may be embarrassed to admit that they have been swindled. If you have an elderly relative, you may have cause for concern if you see these signs of possible financial abuse:
AARP recommends that seniors talk to family, trusted friends, and if possible, their accountants or lawyers to get advice before making any large purchases or investments, especially if the potential sales result from telephone calls. It also provides other tips for avoiding telemarketing schemes, and establishing good communication between seniors and the younger generation (see Stop Dishonest Telemarketers and the Scam Prevention Worksheet).
At Brayton Purcell, we are concerned about the well–being of seniors. We are experienced in all facets of elder abuse law, including financial elder abuse, nursing home violations, and inadequate pain management issues. If you have questions about your legal rights or those of an elderly loved one, either in the community or in a nursing home, please feel free to contact us for more information.
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