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The Golden Fleecing

The Golden Fleecing. Bar Harbor Geriatrics Conference June 10, 2010 Rick Mooers, LSW Adult Protective Services Detective Seth Blodgett, Office of Attorney General. Disclosure.

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The Golden Fleecing

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  1. The Golden Fleecing Bar Harbor Geriatrics Conference June 10, 2010 Rick Mooers, LSW Adult Protective Services Detective Seth Blodgett, Office of Attorney General

  2. Disclosure • The presenters DO NOT have an interest in selling a technology, program, product, and/or service to CME/CU professionals. • Rick Mooers and Seth Blodgett have nothing to disclose with regard to commercial relationships. • The content of this presentation does not relate to any product of a commercial interest. • Therefore, there are no relevant financial relationships to disclose.

  3. OBJECTIVES • Participants will be able to: 1.Identify several of the frauds, scams, and means of exploitation perpetrated against older citizens. 2. Explain why older citizens are prime targets of financial abuse. 3. Explain the difference between the willing, the vulnerable, and the incapacitated victim. 4. Identify potential remedies and protective measures one may pursue to avoid further or future loss.

  4. Why Older Citizens • 70% of the Nation’s wealth is in the hands of people over the age of 50 • Great credit • No overwhelming debt • Live alone • Different value system, very trusting • Lonely

  5. The Willing • Who are the willing? • Lets Make a Deal folks • Bargain Hunters • Easy fix to $ problems Folks • Something for Nothing Folks • You and Me?

  6. Everyday Occurrences • You put your money in, you pull the lever, two candy bars drop down instead of one! What do you do? • You find extra change in the coin return slot. Do you put it back in the machine? • $.25 per ½ hour to park. You find extra time on a meter. Do you put your $.25 in?

  7. Everyday Occurrences • Under 12, half price!!! • Subscription expires and the magazines keep coming. Do you send them back? • It’s a big company, they won’t miss it! • Ever fudge on your taxes? • What happens when a store clerk makes a mistake in your favor?

  8. FRAUDS AND SCAMS • Weapons utilized: • Internet – Sale of products where the purchaser sends a check for more than the purchase price, asking for the balance be sent back. The check is usually worthless. • Phone – Notice of lottery winnings and you only need to pay a security fee to obtain $$.

  9. FRAUDS AND SCAMS • Weapons Continued: • Mail – Solicitation of personal identifying information used to steal your identity • Free check – Asks you to deposit free of charge….yours to keep. What is on that deposited check when returned to point of origin? Bank name, routing number, account number, etc.

  10. FRAUDS AND SCAMS • TYPES of FRAUD: • Home Equity • Reverse Mortgages • Home repair and improvement • Driveways • Chimney repair • Porches

  11. FRAUDS AND SCAMS • Types Continued: • Telemarketing Fraud – $200 Billion lost each year to fraudulent telemarketers. • Products offered are of less quality than promised • Seek personal information from you. • Mail Fraud: • You’ve won! • Send processing fee • Send personal information

  12. FRAUDS AND SCAMS • Types Continued: • Health Fraud • Dangerous products/promises • No physician involved • $100 Billion lost annually • Investment and Securities Fraud • Free Lunch • Alyson Cummings, Securities Investment Educator Maine Office of Securities: 207-624-8551

  13. The Vulnerable • Who are the Vulnerable? • Over 60 • Fixed Income • Medically/Physically Compromised • Live Alone/Lonely • Lack resources or services

  14. Undue Influence • …..is an equitable doctrine that involves one person taking advantage of a position of power over another person. • Free will to bargain is not possible. (Wikipedia)

  15. Undue Influence in Contract Law • If undue influence is proved in a contract, the contract is voidable by the innocent party and the remedy is rescission. • Categories: • Presumed Undue Influence • Actual Undue Influence

  16. M.R.S.A. 33§1022 Undue Influence • Improvident Transfer of Real Estate • Transfer for less than full consideration • Dependent on others to a person with whom elder had a confidential/fiduciary relationship • Not represented by independent counsel • Undue influence is presumed and must be rebutted by beneficiary of transfer. • Failure to rebut = rescission.

  17. Presumed Undue Influence • A class of relationships that, as a matter of law, will raise the presumption: • Parent/child • Guardian/ward • Priest/ member of parish • Doctor/patient In such cases, the onus of proof rests with the person in the power position to disprove the presumption of undue influence.

  18. Actual Undue Influence • Where there is no presumption of undue influence but, there IS evidence that the power was unbalanced at the time of the signing of the contract.

  19. Probate • Undue influence is the most common ground sought for the contesting of a Will and a challenge of capacity usually is the basis of the contest. • In litigation, most jurisdictions place the burden of proving undue influence on the person/party challenging the will.

  20. Undue Influence, Fraud, & Duress • Undue Influence is only an issue when the party in the power position realizes a benefit. (Advisor/testator) • When the party in the power position (Advisor) is getting a benefit for someone else, it would be considered fraud. • Duress consists of the intentional use of force, or the threat of force to coerce someone into a grossly unfair transaction.

  21. Elements of Undue Influence • Four elements must be shown to establish undue influence: • First: It must be demonstrated that the victim was susceptible to overreaching • Mental, psychological, or physical disability or dependency may be used in identifying susceptibility.

  22. Elements of Undue Influence • Second: There must be an opportunity for exercising undue influence • Opportunity usually arises through a confidential relationship • Husband and wife • Parent and child • Doctor and patient • Trustee and beneficiary • Attorney and client

  23. Elements of Undue Influence • Third: There must be evidence that the person suspected was inclined to exercise undue influence over the victim • Aggressively initiates a transaction • Insulates the relationship from outside supervision • Discourages victim from seeking outside advice

  24. Elements of Undue Influence • Fourth: The record reveals a suspicious transaction. • Will abruptly changes • Real estate transfers • Large withdrawals from $$$ accounts

  25. Determining Undue Influence • Courts determine undue influence • Cognitive assessments will not reveal the presence of undue influence. • Courts will look at: • Transaction took place at appropriate time • Transaction took place in appropriate setting • Was there pressure to act quickly • Discouraged from seeking advice from others • Relationship between the parties • “Fairness” of the transaction

  26. I.D.E.A.L. Protocol • Protocol developed by: • Bennett Blum, M.D. Forensic and Geriatric Psychiatry • Tom Feledy, M.B.A., San Francisco Police Department

  27. “I” • “I” is for Isolation • This refers to isolation from pertinent information, friends, relatives, advisors, etc. • Causes: • Medical disorders • Poor relationships • Interference by perpetrator • Geography • Technology, i.e. telephone, computer, television, hearing aids

  28. “D” • “D” is for Dependency • This refers to dependence on the perpetrator • Cause • Supplanting current supports or services with self, i.e. • Physical support • Emotional supports • Information

  29. “E” • “E” is for Emotional manipulation or exploitation of a vulnerability • Manifests as promises, threats, or both regarding: • Safety Alcohol to an alcoholic • Security Vision impaired to sign docs. • Companionship Diminished capacity mis- representation • *Easiest emotion to manipulate is………….?

  30. “A” • “A” is for Acquiescence • This refers to the victim’s apparent consent, submission, or willingness to accede to the requests/demands of the perpetrator.

  31. “L” • “L” is for Loss • This refers to financial loss in cases involving monetary assets • This refers to physical harm in cases involving violence.

  32. The Incapacitated • Who are the incapacitated? • Incapacitated adult.  "Incapacitated adult" means any adult who is impaired by reason of mental illness, mental deficiency, physical illness or disability to the extent that that individual lacks sufficient understanding or capacity to make or communicate responsible decisions concerning that individual's person, or to the extent the adult can not effectively manage or apply that individual's estate to necessary ends. 22-MRSA Ch. 958 §3472

  33. The Incapacitated • There are various legal and administrative relationships that can be effected to assist an incapacitated person; both prior to incapacity and following a finding of incapacity: • Representative Payee • Durable Power of Attorney • Guardian and/or Conservator

  34. The Incapacitated • Surrogate via the Uniform Health Care Decisions Act. 18-A, MRSA §5-805 It is through these mechanisms that a confidential and/or fiduciary relationship is created between the principle and the agent

  35. TITLE 22 §3472 DEFINITIONS • Exploitation: • The illegal or improper use of an incapacitated adult or his resources for another’s profit or advantage.

  36. Indicators of Exploitation • Change in representative payee, Power of Attorney, Will • Elder doesn’t know what happens to their money • Checks no longer come to the house • Victim reports signing papers and doesn’t know what was signed • Sudden, excessive gifting absent a historical pattern

  37. Indicators of Exploitation • Unexplained disappearance of funds or valuables • Dependent relationship • Transfer of property or savings • Excessive payment for care and/or services • Victim is unaware of income amount

  38. Applicable Laws • Misuse of Entrusted Property (M.R.S.A. Title 17-A, § 903, Class D) • Endangering the Welfare of a Dependent Person (M.R.S.A. Title 17-A, § 555, Class D) • Theft by Misapplication of Property (M.R.S.A. Title 17-A, § 358, Class B, C, D, E based on $$$) • Theft (M.R.S.A. Title 17-A, § 353) • These are THEFT cases!!!

  39. Difficulties with Investigations • Vulnerability to “Undue Influence” • Family Relationships, Dependency • Suspect has control of finances, records • Diminished mental capacity of the victim

  40. “Civil” Mindset • Many times, the victim will have willingly signed financial documents such as checks, property transfers, etc. If they didn’t understand what they were signing, it does not make it any less a crime. • “Durable Power of Attorney” doesn’t give the agent a right to use assets as their own. • These are THEFT cases!!!!

  41. Potential Remedies and Protections • Demand an attorney or accountant review all financial accounts • Require two signatures on all accounts • Set up periodic meetings to review all accounts (with bank, accountant, attorney) • Check Registry of Deeds from time to time to ensure no transfers have taken place • Are there any new PoA’s? • Have any joint tenancy accounts been established?

  42. Potential Remedies and Protections • Have your bank “flag” accounts to raise awareness regarding all transactions. • Close existing account(s) and open new one(s) requiring two signatures

  43. Resources • Area Agencies on Aging: 1-877-ELDERS-1 • Legal Services for the Elderly: 1-800-537-6066 • Office of the Attorney General: 626-8531 • Adult Protective Services: 1-800-624-8404 • rick.mooers@maine.gov 207-667-1601 • Seth.blodgett@maine.gov 207-626-8531 • Http://www.scambusters.org • Http://nclnet.org/shoppingonline

  44. Thank you • There’s a little larceny in all of us…… W.C. Field Is There? We all hope to become the person we always knew we could be………..

  45. Bibliography • Wikipedia • Getting Older, Getting Fleeced, Pamela Camille • The New Dictionary • National Center on Elder Abuse • Inspector Tom Feledy, M.B.A. • Tel: 415-553-1530 • Bennett Blum, M.D. • Http://www.bennettblummd.com • Tel: 520-750-8868

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