Special to HISTORIC CITY NEWS
Do you or your parents still have the ability to judge whether another person has your best financial interests at heart, particularly when that person is a well-known professional like an attorney or investment advisor? The elderly also suffer at the hands of greedy, desperate, or drug addicted relatives and friends, among others.
Some 5 million older Americans are financially exploited every year by scammers. For every case reported to authorities, as many as 44 are not. The total number of victims is increasing as baby boomers retire and their ability to manage trillions of dollars in personal assets diminishes. But assessments like that are “grossly underestimated,” according to a 2016 study by New York State’s Office of Children and Family Services. The study found losses in New York alone could be as high as $1.5 billion. One financial services firm estimates seniors lose as much as $36.5 billion a year.
“Financial exploitation of the elderly is a huge problem in the sense that it’s so profoundly
destructive,” says Page Ulrey, a senior deputy prosecutor with a special task force in Seattle.
The United States Centers for Disease Control and Prevention drew attention to elder exploitation as a public health problem in a 2016 report, citing groundbreaking research two decades earlier by Mark Lachs. Now co-chief of the Division of Geriatrics and Palliative Medicine at Weill Cornell Medicine and New York-Presbyterian Hospital, Lachs says elder abuse victims, including those who suffer financial exploitation, die at a rate three times faster than those who haven’t been abused. It’s a “public health crisis,” he warns.
In 2015, Lachs coined the term “Age-Associated Financial Vulnerability,” to sound the alarm. He defined it as a “pattern of imprudent financial decision-making that begins at a late age and puts older adults at risk for material losses that could decimate their quality of life.”
Financial judgment can start to falter before normal cognition does, Lachs says, regardless of whether the person was savvy with money when they were younger.
The Elder Justice Act, the first comprehensive legislation to address abuse of senior citizens, was enacted in 2010 but remained unfunded until 2015. When funding finally came through, the Act was allocated only $4 million. Originally, the allocation was to be closer to $1 billion.
“Dollars appropriated since then have, in Congressional terms, been dribbling,” says Marie-Therese Connolly, a former Justice Department attorney who championed the law, working with the Senate Special Committee on Aging. Despite the severity of the problem, the federal government’s response has been frustrating, according to practitioners and public officials.
Joe Snyder, who served as director of older adult protective services at the Philadelphia Corporation for Aging, says he’s doubtful necessary funding will arrive in his lifetime. Before he retired, he oversaw 27 investigators with limited resources handling about 3,500 cases a year. Snyder says it was like using water pistols to fight a forest fire.
“Financial exploitation causes large economic losses for businesses, families, elders and government programs, and increases reliance on federal health care programs,” warned a 2014 elder justice report Connolly helped prepare. Three years later, a Congressional Record Service report bemoaned a lack of progress.
“As a result of this limited federal funding, the federal government has not substantially developed and expanded its role in addressing the prevention, detection, and treatment of elder abuse. It’s a fundamentally reactive system,” says Connolly.
Some progress, however, is being made.
In October, President Donald Trump signed the Elder Justice Prevention and Prosecution Act; meant to improve coordination among federal, state and local agencies. Antoinette Bacon is a career prosecutor who serves as the national elder justice coordinator for the Department of Justice.
In February of this year the largest coordinated sweep of elder fraud cases in history charged more than 250 defendants with schemes causing 1 million mostly elderly Americans to lose more than $500 million in savings. The dragnet, which lasted one year, is part of an ongoing effort “to detect and infiltrate these criminal organizations that are trying to exploit the elderly,” Bacon said.
States have been stepping up as well. Thirty-nine of them and the District of Columbia addressed financial exploitation of the elderly in last year’s legislative sessions, according to the National Conference of State Legislatures. More than half the states enacted legislation or adopted resolutions. Still, Snyder worries the federal block grant many states rely on to pay for services that protect seniors could be cut dramatically under Trump. “If that goes away, programs will be crushed overnight.”
The financial industry says it’s doing more, too. On February 5, the Financial Industry Regulatory Authority, an industry body, put into effect “the first uniform, national standards to protect senior investors.” It now requires members to try to obtain a trusted contact’s information, so they can discuss account activity. It also permits firms to place temporary holds on disbursements if exploitation is suspected.
Elizabeth Loewy, a prosecutor who directed the elder abuse unit at the Manhattan District Attorney’s Office in 2014 and now works for EverSafe, a startup that makes software to monitor suspicious account activity, says the bulk of her cases were financial involving victims who rarely get their money back. “They’re usually emotionally devastated as a result of having been betrayed,” she says. In some of her most heartbreaking cases, it appeared the victim gave consent for their money to be controlled by the attorney or consultant who ultimately enriched themselves; but the legalese in the asset management contract revealed that because of manipulation or deception, it was too difficult for them to figure out the truth of what was going on.
Almost 60 percent of cases involve a perpetrator who is a family member, according to a 2014 study by Lachs and others. In these situations, victims are often unwilling, or unable, to seek justice. While many families don’t intervene when they suspect a family member is abusing an elderly relative, Philip Marshall did, in a famous example of elder exploitation.
“I was a family member who acted,” says Marshall. “And that’s huge. Because people don’t act. They say we don’t want dirty laundry out there.” Marshall wanted his grandmother, famed socialite Brooke Astor, to enjoy her final years at her country home, as she had wished. When his father, Anthony Marshall, wouldn’t let her, Philip sought guardianship, setting off a legal battle. As the fight progressed, Philip says he discovered that his grandmother, who had been diagnosed with Alzheimer’s, was enduring various forms of neglect. It was “all in an effort by my father to gain her money,” he alleges.
The dispute culminated in his father’s conviction and prison sentence in 2009 for siphoning off millions of dollars from Astor. At first, says Philip, “Our goal was just to stop my grandmother’s isolation and manipulation. We didn’t really care about money.” A separate legal proceeding over the neglect allegations was eventually resolved.
Last year, Philip quit his job as a professor to become a full-time advocate in the fight against elder abuse. He gives talks to government officials and financial institutions and spends hours speaking with strangers dealing with exploitation. “So many times, it’s family,” he says. “I don’t think people realize that.”
“Exploiters know what they’re doing. They take amounts under $10,000 that they know won’t get picked up by fraud and risk folks at banks; and, they steal across institutions over time,” Loewy explained. “We’re going to come to a place where we’re seeing a lot of homeless elderly people.”
She says her team is seeing an increase in seniors showing up in housing court—because they’re being evicted. “A lot have been financially exploited, and they don’t even know what’s happening until they get that notice.” Losing housing usually accelerates mental and physical decline, she says.
Unless we figure out how to protect the assets of senior citizens from this epidemic, “we’re going to come to a place where we’re seeing a lot of homeless elderly people on the street.”
CBS News, and findings from Office of Children and Family Services of New York, United States Centers for Disease Control and Prevention, Weill Cornell Medicine and New York-Presbyterian Hospital, Senate Special Committee on Aging, Philadelphia Corporation for Aging, Congressional Record Service, US Department of Justice, National Conference of State Legislatures, Financial Industry Regulatory Authority, contributed to this report.