Saturday, February 2, 2013

Elder Financial Abuse, and Affinity Scam

Another case of a scam targeting seniors was busted by the SEC.

"We The People", a fraudulent investment scheme in Florida, was closed by SEC, but not before it defrauded hundreds of seniors out of 75 million dollars across 23 states. Apparently, its sales people are promised between 7 to 10% of whatever amount they can entice people into putting into the scheme. In other words, if they can convince people to put in a million, they'll clear at least 70K.

The SEC's complaint stated that the scheme claimed to offer "charitable gift annuities". The scheme basically had seniors giving the scheme organizers stocks, bonds, real estate, and other valuables, in exchange for this "charitable gift annunity" that pay them back. Most of the money went to the organizers and their salespeople (remember, 7-10%), instead of to charities. Even when they *do* give to charities, they are only involved peripherally, like contributed a few thousand dollars for transportation of a 22 million dollar project.

You can read more about it here:

Unfortunately, this is quite common, as seniors have diminished capacities, and their loneliness lead them to talk to any one that will listen, and scammers are very good at sound like "such a nice young man..."

However, stranger fraud is actually NOT the leading cause of senior financial abuse... Far more often, it's perpetrated by someone the senior knows personally... relative, close friend, sons or daughters... or caretaker / guardian.

What's worse, often seniors are too ashamed to speak up after suffering a loss.

Do NOT assume that your senior relatives are doing fine. When you see them, make gentle inquiries regarding their financial situation, who's taking care of it, and who had been asking about it. You may save a senior's final days and their assets from abuse.

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