December 7, 2022

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Justice Department Expands Transnational Elder Fraud Strike Force to Protect Older Americans from Fraud

8 min read
<div>The Justice Department announced today that as part of its continuing efforts to protect older adults and to bring perpetrators of fraud schemes to justice, it is expanding its Transnational Elder Fraud Strike Force, adding 14 additional U.S. Attorney’s Offices.</div>

The Justice Department announced today that as part of its continuing efforts to protect older adults and to bring perpetrators of fraud schemes to justice, it is expanding its Transnational Elder Fraud Strike Force, adding 14 additional U.S. Attorney’s Offices. Since 2019, current Strike Force members — including the Department’s Consumer Protection Branch, six U.S. Attorneys’ Offices, the FBI, U.S. Postal Inspection Service, and Homeland Security Investigations — have brought successful cases against the largest and most harmful global elder fraud schemes and worked with foreign law enforcement to disrupt criminal enterprises, disable their infrastructure, and bring perpetrators to justice. Expansion of the Strike Force will help to coordinate the Department’s ongoing efforts to combat sophisticated fraud schemes that target or disproportionately impact older adults. The expansion will increase the total number of U.S. Attorneys’ Offices comprising the Strike Force from six to 20, including all of the U.S. Attorneys’ Offices in the states of California, Arizona, Texas, Florida, Georgia, Maryland, and New York.

“We are intensifying our efforts nationwide to protect older adults, including by more than tripling the number of U.S. Attorneys’ offices participating in our Transnational Elder Fraud Strike Force dedicated to disrupting, dismantling and prosecuting foreign-based fraud schemes that target American seniors,” said Attorney General Merrick B. Garland. “This expansion builds on the Justice Department’s existing work to hold accountable those who steal funds from older adults, including by returning those funds to the victims where possible.”

“At the FBI, we swear an oath to protect the American people, and this includes our most vulnerable populations like the elderly,” said FBI Director Christopher Wray. “​Efforts like these display our unwavering dedication to protecting our older citizens and combating fraudsters who look to exploit them. I am proud of the work by FBI agents and analysts, as well as our local, state, and federal law enforcement partners, in bringing those criminals to justice. If you think you may be a victim of elder fraud, or you know someone who is, we encourage you to reach out. We are here to help.” 

“The U.S. Postal Inspection Service is a longstanding member of the Transnational Elder Fraud Strike Force,” said Chief Gary Barksdale of the Postal Inspection Service. Postal inspectors are proud to contribute to the impactful cases that help numerous victims, many of them older Americans, and aid in the recovery of their losses through restitution. Postal inspectors have a long history of protecting the vulnerable, and our ongoing efforts demonstrate the Postal Inspection Service’s continued commitment to the task. We are excited to learn of the Department of Justice’s decision to expand the strike force.”

The strike force expansion will further enhance the Department’s existing efforts to protect older adults from fraud and exploitation. During the period from September 2021 to September 2022, Department personnel and its law enforcement partners pursued approximately 260 cases involving more than 600 defendants, both bringing new cases and advancing those previously charged. The matters tackled by the Department and its partners ranged from mass-marketing scams that impacted thousands of victims to bad actors scamming their neighbors. Substantial efforts were also made over the last year to return money to fraud victims.

In the past year, the Department has held multiple transnational organized crime syndicates to account for their targeting of older Americans. On Sept. 16, 2022, for instance, the Department’s Consumer Protection Branch and the U.S. Attorney’s Office for the Southern District of California secured a guilty plea from the Chief Executive Officer of a global telecommunications provider for serving as a gateway carrier for Indian-based fraudulent robocalls that targeted elderly Americans. Similarly, in September 2021, the U.S. Attorneys’ Offices for the Eastern and Northern Districts of Texas secured two indictments collectively charging 34 individuals with, allegedly, facilitating a range of schemes, including romance scams. In March 2022, an individual charged by the U.S. Attorney’s Office for the Central District of California was sentenced to nine years in prison for participating in an international scheme that placed phone calls purportedly from government agents warning victims that they faced arrest or that their identities or assets were in jeopardy.

Many schemes connected to transnational criminal organizations involved impersonation to convince victims into sending money to fraudsters. “Grandparent scams” are especially pernicious versions of such schemes. Those scams typically begin when a fraudster contacts an older adult and poses as either a family member or someone calling on behalf of a family member. Call recipients are told that their family member is in jeopardy and urgently needs money. When recently sentencing one of eight perpetrators of a grandparent scam indicted under the Racketeer Influenced and Corrupt Organizations (RICO) Act, a federal judge described such scams “heartbreakingly evil.” That case was brought by the Department’s Consumer Protection Branch and the U.S. Attorney’s Office for the Southern District of California and investigated by the FBI’s San Diego Elder Justice Task Force. The Department also prosecuted other grandparent scam cases during the last year in the Middle District of Pennsylvania, Western District of Pennsylvania, District of Maryland, Central District of California, Southern District of Illinois, and Southern District of Indiana.

Other cases advanced by the Department over the past year with a more local nexus involved schemes in which individuals who knew their victims took advantage of those victims’ trust. For instance, in March 2022, the U.S. Attorney’s Office for the Northern District of Ohio convicted at trial an investment advisor, charged in 2020, who stole more than $9.3 million from his customers; the advisor was sentenced to nearly 22 years in prison. In September 2022, the U.S. Attorney’s Office for the Eastern District of Missouri secured charges against a bank branch manager who, allegedly, stole $175,000 from elderly customers by, among other things, logging into customer accounts and transferring funds. 

Efforts to Return Money to Victims

The Department and its law enforcement partners continue to use all of the tools available to return money to elder fraud victims, including forfeiture, remission, restoration, restitution, and direct payments. As part of the Department’s efforts since September 2021, approximately 550,000 fraud victims were notified that they could be eligible to receive a payment. More than 150,000 of those victims cashed checks totaling $52 million,* and thousands more are eligible to receive checks.

In one matter resolved on Sept. 15, 2022, Wiland Inc., a consumer data company, agreed through a non-prosecution agreement to pay $4.4 million in victim compensation for its acknowledged sale of consumer data to operators of fraudulent schemes. Victims of fraud schemes that used consumer data sold by Wiland (many of whom were older adults) were targeted with “sweepstakes” or “astrology” solicitations that falsely promised prizes or individualized services if victims paid a fee. Many victims lost thousands of dollars. The matter was prosecuted by the Department’s Consumer Protection Branch and the U.S. Attorney’s Office for the District of Colorado, and was investigated by the U.S. Postal Inspection Service.

Victim compensation paid by Wiland as part of its resolution with the Department will be added to a fund previously developed in connection with cases brought against two other marketing companies by the Department’s Consumer Protection Branch and the U.S. Attorney’s Office for the District of Colorado, with the support of the U.S. Postal Inspection Service. The two companies, Epsilon Data Management LLC and KBM Group LLC, entered into deferred prosecution agreements in January 2021 and June 2021, respectively, that required them to distribute $127.5 million and $33.5 million, respectively, to victims who were included on consumer lists sold by Epsilon and KBM Group to fraudsters. In addition, all three of the companies agreed through their resolutions to implement significant compliance and reporting obligations to prevent the recurrence of misconduct. 

Compensation payments associated with the Epsilon, KBM, and Wiland resolutions have been, and will continue to be, sent directly to eligible victims identified through a review of relevant evidence by the Department of Justice. Information about compensation payments is available here.

The Department also continued its efforts to return money to consumers, especially older Americans, who were victimized by scams and paid fraudsters via Western Union. In the past year, the Department has identified and contacted over 300,000 consumers who may be eligible for remission. Since March 2020, more than 148,000 victims have received more than $366 million as a result of a 2017 criminal resolution with Western Union for the company’s willful failure to maintain an effective anti-money laundering program and its aiding and abetting of wire fraud. The Money Laundering and Asset Recovery Section of the Department’s Criminal Division and numerous U.S. Attorneys’ Offices secured and are administering the resolution with Western Union. Information about payments made through the Western Union resolution is available here.

In addition, the FBI’s Internet Crimes Complaint Center (IC3) successfully employed its Recovery Asset Team (RAT) to identify ongoing elder fraud schemes and to freeze victims’ funds before they could reach fraudsters’ pockets. Over the last 12 months, the IC3 RAT worked approximately 375 incidents involving older adult victims, freezing over $21 million, making recovery and return of those funds possible.

The Consumer Financial Protection Bureau also published a report that provides the first comprehensive description of the experience of how and when older adults recover funds they have lost to fraud and exploitation. The report derives insights from interviews with older adults, caregivers, and professionals.

Public Education, Outreach, and Fraud Reporting

In conjunction with today’s announcement, the Department, the Consumer Financial Protection Bureau, the Department of Health and Human Services’ Administration for Community Living, the COPS Office, AmeriCorps Seniors, and other agencies and components are conducting outreach to raise public awareness of grandparent scams. Free awareness materials related to grandparent scams are available from the CFPB here and from the FTC here.

The Department also commended FinCEN for releasing an advisory to alert financial institutions to the rising trend of elder financial exploitation. Filings under the Bank Secrecy Act (BSA) are a critical tool in the fight to protect older adults, and the Department is engaging with financial institutions to amplify FinCEN’s advisory and emphasize the importance of BSA filings.

Reporting from consumers about fraud and fraud attempts is critical to law enforcement efforts to investigate and prosecute schemes targeting older adults. If you or someone you know is age 60 or older and has been a victim of financial fraud, help is available through the National Elder Fraud Hotline: 1-833 FRAUD-11 (1-833-372-8311). This Department of Justice Hotline, managed by the Office for Victims of Crime, is staffed by experienced professionals who provide personalized support to callers by assessing the needs of the victim and identifying next steps. Case managers will identify appropriate reporting agencies, provide information to callers to assist them in reporting or connect them with agencies, and provide resources and referrals on a case-by-case basis. The hotline is staffed seven days a week from 6:00 a.m. to 11:00 p.m. ET. English, Spanish, and other languages are available. More information about the Department’s elder justice efforts can be found on the Department’s Elder Justice website, www.elderjustice.gov.

Some of the cases referenced in today’s announcement are charges, which are merely allegations, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

* The original version of this release stated the number of victims as 160,000 and the check amount totaling $62 million. The correct numbers are 150,000 victims and $52 million.

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