Golden Age of Fraud: Senior “money mules” in Organized Crime
Financial exploitation is becoming increasingly prevalent and organized. Indeed, fraud has become one of most prevalent crimes around the globe. The Baker Fraud Report of March 30, 2017 states that over 10% (that is 1 out of 10) of US adult population lost money to a scam in the previous year! Currently, scams cost individuals, organizations and governments hundreds of billions of dollars each year, and many scam victims also endure depression and ill health. There is no other crime that affects so many people from almost all ages, backgrounds, and place of living. The increase in fraud and scams is especially toxic to seniors. Older adults have long been favorite targets for telemarketing scammers. As a group, seniors have more assets and, because of cohort traits such as civility and trust, the risk of victimization can increase.
With technology and increased organization, scammers have found a new approach to prolong and increase senior victimization. As in the past, once “on the hook”, scammers will groom senior victims, calling them multiple times a day to facilitate trust and a relationship. Using common tactics known to psychologists who study persuasion, the scammers will get their foot in the door, starting with small requests and gradually draining their victim’s resources with promises of “winnings” or “investment returns” just around the corner. Scammers will learn about every possible asset (reverse mortgage) and walk seniors through the steps necessary to tap the assets to complete the victimization. In the past, once the seniors’ assets are gone, the scammers would abandon them.
What is now new is the “recruitment” of these defrauded seniors as “mules” into the organized crime institutions who can carry out tasks on the ground for the scammers and provide another level of insulation from law enforcement for the scammers. These senior “mules” will receive checks from other seniors, deposit it into their bank accounts and then send most on to the scammers. They may be asked to deliver packages or messages on behalf of the scammers.
The scammers tell the initial victim that they are being “sponsored” by other investors or sweepstakes players. Certainly, there are some senior mules who figure out that they themselves are victimizing other seniors, at which point scammers will switch tactics from affection to intimidation. Reports have included having scammers sending a pizza to the individual with a note of intimidation. Or using social media to indicate they are aware of the seniors movements and other phone calls. Seniors believe that they are under surveillance, and become fearful and hesitant to cooperate with law enforcement. These seniors potentially face criminal prosecution for money laundering, becoming “unbanked” by their banking institutions, and a future of poverty secondary to these scammers. Currently, many of these scams are being initiated in Canada and Jamaica. Early intervention with senior scam victims and consumer protection is more critical than ever, including law enforcement involvement.
Unfortunately, policy is moving in the opposite direction. Rather than increasing protections for older consumers, the current administration is proposing rolling back the fiduciary rule which would require financial advisors to put their client’s interest first. With the fiduciary rule now in doubt, we are truly entering into the golden age of fraud.
