Last spring, 75-year old Kanda Aromdee walked into a Chase bank in upper Manhattan and withdrew $10,000, while two men waited for her outside.
By this time, she was afraid.
The men had approached Kanda (a pseudonym) around the corner outside a 99-cent store, with an old con that has a hundred postal and telephone variations: one of them claimed he had won the lottery, and needed a place to deposit the money.
Then they asked her to withdraw some money to prove the account was legitimate.
But Kanda’s willingness to help turned to fear as the two men walked her to the bank, and she began to worry that they might hurt her if she didn’t cooperate. According to her son, she was taking new medication that left her both weak and mentally out of sorts.
“I don’t know how else to get it out to the elderly or to the families,” said George Gill, a detective with the New York Police Department’s 34th Precinct who is trying to raise awareness about seniors’ vulnerability to such scams.
The perpetrators find a corner with numerous banks around, and know how to avoid the cameras, he explained.
“These are professional con people, so they’re not just going to walk into a bank and allow themselves to get videoed,” he said.
And the bank teller? “Certain banks will actually call a manager over, and will actually question the person— ‘what are you taking this money out for?’ And they stop [the crime],” said Gill.
But too often such questions aren’t asked. In New York, banks are not obligated to report suspected fraud, and any policies they may adopt to protect older clients– such as training bank tellers to spot common scams– are strictly voluntary.
Even though elder financial exploitation has gained more visibility at both the state and federal levels as the U.S. population ages, the uneven way such crimes are reported, investigated, and prosecuted throughout the country has left countless victims falling through the cracks.
Elder advocates in New York have been trying for years to pass legislature that would address perceived issues of liability around bank reporting, but the latest bill (A.5336A) stalled after passing the Senate in 2015.
“Basically, we were asking our state legislature to put into law that financial institutions could report to Adult Protective services when they had reason to believe that a vulnerable person was being defrauded,” said Elizabeth Loewy, former chief of the Elder Fraud Unit at the Manhattan District Attorney’s office.
“It’s a real softball, right? Because we’re not mandating it.”
Proponents of these reforms appear to be gaining more leverage recently. Last June, the Office of Children and Family Services released a study which found that senior exploitation “costs victims and the state at least $1.5 billion each year and probably more.” In January, Gov. Cuomo proposed a plan to address elder financial exploitation that goes several steps further than the “permissive reporting” bill.
Cuomo’s proposal admonishes banks for “insufficiently using their power to place holds on, or prevent, suspicious transactions involving elder financial abuse,” and recommends a certified training program for all bank employees in New York State. The plan would also require banks to report fraud to state agencies once a hold is placed on a suspicious transaction.
Unlike New York, California state law requires every bank teller to report suspected elder financial abuse to local authorities. As a result, said Paul Greenwood, who heads the San Diego D.A.’s Elder Abuse Prosecution Unit, “whether [it’s] the grandma scam, or the lottery scam, or the IRS scam, more of these transactions are being spotted, and ultimately being reported.”
Bankers Raise Alarm
The Santa Clara D.A.’s office saw a spike in cases after the law passed in 2007.
“Our financial crimes reportings went way up because of the banks calling the police, and Adult Protective Services,” Deputy D.A. Cherie Bourlard told The Crime Report.
But according to Bourlard, that trend has dropped off in recent years; and rather than flagging the account right away, banks often claim they need to call legal corporate counsel first– which can take days.
“I don’t believe that most financial institutions are following the correct procedure,” said Greenwood.
“I think most of them refer it to their own fraud departments first, and then they sift through it, and then they decide whether or not to call it in to Adult Protective Services.”
Greenwood often goes out and speaks to church groups, Rotary clubs, or mobile home parks, and when he encounters someone who’s fallen prey to a scam, he tries to find out how they sent the money.
“I call the bank and I sometimes chew out the bank manager,” said Greenwood. “I say ‘Why on earth did your bank teller let this 78-year-old lady walk in and get $5,000 in cash?
“Why didn’t you sit her down in a private office and ask her ‘has your grandson called you from jail?’”
“When you get a call from a deputy D.A., I’m hoping that it does have an impact,” he added. “All I’m asking a banker [is] to become much more proactive.”
Back in Manhattan, Kanda discovered she was not the only elderly person in the neighborhood fleeced by confidence scammers. In fact, it happened to Cathy, an 84-year-old woman living two floors down from her in the same building. (The names of Kanda and other victims in this story have been changed to pseudonyms at their request.)
This time, a pair of women came up to Cathy outside her church, not a block from the 99-cent store where Kanda was approached. One said she had “found some money,” while the other woman offered to help find a lawyer. Cathy got into a car with them, and before she knew it, they were at her bank.
Fortunately, because she withdrew the $2,500 against her credit card, Chase was able to reverse the charges.
Cathy’s son took her to the 34th Precinct later that day to file a report, but the perpetrators were never caught. According to detective Gill, confidence scammers like these take off and don’t come back again.
But Cathy said she spotted the woman who ripped her off a few months later, hanging around a corner a few blocks north of the bank.
For Loewy, who helped draft the bank reporting bill currently before the Senate, these complaints should at the very least have sparked an internal conversation.
“After it happened once, if it was reported right away, there should have been a meeting amongst everyone at the bank to talk about the fact that their particular branch was being targeted for what’s a well-known scam.”
But in a phone call with The Crime Report, the branch manager appeared unaware of the problem.
Erich Timmerman, a spokesperson for JPMorgan Chase, told The Crime Report that the bank is looking into both incidents.
Twenty years ago, when Loewy was heading one of the country’s first elder abuse units, there was much less willingness on the part of financial institutions to address elder fraud.
But by the time she left the D.A.’s office in 2014, over a dozen banks and credit unions were participating in a statewide task force to prevent exploitation.
“There’s been a real shift [with] financial services, in viewing this as not just an issue of interest, but an issue that’s an emergency,” said Loewy.
Bank of America, Fidelity, and Citibank all have elder fraud initiatives now.
The Financial Industry Regulatory Authority (FINRA) has also begun taking measures to protect senior investors, and in 2015 introduced a toll-free Securities Help Line for Seniors.
Last October, in apparent response to the volume of calls that came in, FINRA proposed new rules that would require financial institutions to report suspected elder fraud to a regulatory authority, and allow them to place a temporary hold on transactions that seem suspicious.
Meanwhile, some states began adopting a rule developed by the North American Securities Association Administration (NASAA), requiring financial advisors to disclose suspected abuse to Adult Protective Services, and providing immunity for reporters of fraud.
Some legal experts argue that no federal law prohibits banks from reporting abuse to local law enforcement or to APS, and that such disclosure is already an exception under both the Financial Privacy Act, and the Gramm-Leach-Bliley Act.
New York’s stalled “permissive reporting” bill, which also allows banks to put a hold on suspicious transactions, doesn’t change current law, said Loewy.
“They can do this now!” she said. “They can do this under current federal law. But we were trying to give them something in writing, in the banking law…And we just got pushback. “
Loewy has since left the Manhattan DA’s office to join the tech firm EverSafe, in large part because she wanted to offer seniors tools to prevent financial abuse before it happened.
“I got sick of seeing all of these people get scammed, and their family members coming in and saying ‘The bank wouldn’t send me a copy of her checking account!’” said Loewy.
EverSafe provides independent monitors who have “read-only” access to a senior’s financial statement; not only can they spot irregular activity, but they can also educate banks and consumers about how the different scams work.
But these services are not yet commonplace, and more often than not, it’s the victim who risks losing his or her freedom, not the perpetrator.
In Kanda’s case, her son decided it would “just be easiest to get a power of attorney.”
In Part 2, The Crime Report will examine some of the flaws in current state legislation to protect seniors from fraud, and what’s being done to fix them.
Victoria Mckenzie is a freelance writer based in New York. She welcomes readers’ comments.