Jacquelyn Atchley isn’t bitter. At least not anymore.
But the 73-year-old retired Oklahoma resident certainly has the right to be angry. She lost $180,000 – all of her retirement savings – in a Ponzi scheme. A fellow Oklahoman, Brian McKye, defrauded 80 investors, many of them elderly, out of about $6 million, said Irving Faught, administrator of the Oklahoma Securities Commission.
McKye promised investors they could earn guaranteed returns of 6.5 percent to 20 percent by investing in notes backed by high-interest payday loans. But no such investment notes existed, Faught said. Instead, McKye used the money he took from investors to pay his personal and business expenses and some limited returns to investors to keep his scheme going.
“It’s hard to believe people would do this kind of thing,” said Atchley, who now has to get by with Social Security payments for her and her husband.
“It’s very difficult at times,” she said. “It’s scary to know I’ll be down to just my Social Security if something happens to him. But I have a lot of faith everything will work out.”
More than 7 million older Americans – one out of every five citizens over the age of 65 – have been victimized by a financial swindle, the Investment Protection Trust found in a survey it conducted two years ago.
Financial exploitation targeting seniors is a major and growing problem, says Don Blandin, president and chief executive of IPT, a nonprofit organization devoted to investor education.
In a recent poll of 756 state securities regulators, financial planners, health care professionals, social workers, adult protective services, law enforcement officials, elder law attorneys, and academics, IPT found that the top three financial exploitation problems identified by experts were: theft or diversion of funds or property by family members, followed by caregivers, and then financial scams perpetrated by strangers.
“This is really a scary thing and so widespread,” Faught said. “I’ve been shocked by consumer fraud in general, but I’m just very, very shocked by what happens to our seniors.”
Despite the increase in financial exploitation of seniors, Blandin said he is encouraged by the collaborative, community-based efforts across the country between regulators, doctors, nurses and law enforcement officials. IPT’s Elder Investment Fraud and Financial Exploitation Prevention Program has trained more than 3,000 medical professionals to look for signs that a senior is being financially abused.
Here are some of the red flags the trainers are pointing out, Blandin said:
• Social isolation. Con artists look for seniors who seem lonely. Their desperation for companionship often makes them an easy target for financial exploitation.
• A change in a senior’s ability to perform many daily living activities such as cooking, cleaning or paying bills. Again, a swindler or family member will take notice and use the inability of a senior to care for himself as a way to gain access to his finances.
• Concerns about a caregiver. A senior may complain that she gave the caregiver $50 for groceries that shouldn’t have cost more than $20 and didn’t get change back.
• Loss of a spouse. Blandin said schemers search obituaries looking for vulnerable widows or widowers to exploit.
• The senior becomes financially responsible for an adult child who appears to be a bum. As an example, you might hear the person say, “I gave Tommy or Linda a check for their education.” However, you know Tommy or Linda is not using the money for school.
• The senior complains that the son he gave his power of attorney to won’t tell him what’s going on with his finances. “It’s a red flag if you hear the senior say when I ask about my money the person says, ‘It’s too complicated, you really don’t want to know,’” Blandin noted.
What experts are striving for, Blandin and Faught said, is prevention as well as prosecution.
In April, the man who exploited Atchley was sentenced to 22 years in federal prison for securities fraud and conspiracy to commit money laundering. McKye was ordered to pay back the millions he stole. But it’s unlikely victims will get anything.
“Nobody can do anything about it now,” Atchley said. “It’s done. It’s over. That’s it.”
I’m so sorry for what happened to Atchley, but we can – all of us – do more by watching, listening and acting quickly to prevent other seniors from losing their hard-earned savings.
Family members and caregivers often financially abuse their elders.