Busted: Con Artists Exposed
An inside look at the worst frauds and how scammers target their victims
Sean McCabe
These con artists have been behind several common scams.
En español | Warren Stelman knew the drill: Buy lists of filled-out sweepstakes entries to identify promising leads. Get computer-based phone lines and Manhattan voice-mail boxes to mask the true place of operation — the Dominican Republic. Then start calling older Americans.
Congratulations! You've won the sweepstakes! What are you going to do with all that money?
For "winners" envisioning college for the grandkids, perhaps, or financial independence for themselves, the several thousand dollars that Stelman and his crew requested upfront, supposedly for taxes and insurance, seemed a small price to pay.
By the time Stelman was arrested in August 2012, he and his alleged collaborators had collected nearly $1 million from at least 78 victims — most in their 70s and all over 50. In September 2013, he was sentenced to six years in prison.
Stelman's scam and his success with targeting older people were, sadly, nothing new.
Roughly one-third of all scam victims are 65 or older, though the age group comprises only one-eighth of the population. Based on reports, victims who are 55 and up lose $3 billion a year, but the true figure is many times higher, because most of these crimes go unreported out of embarrassment.
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Sweepstakes cons like Stelman's are among the most common scams hitting older Americans. But keep a special eye peeled for these other hoaxes that rank with the biggest and baddest.
The Six Common Cons You Should Avoid
Sean McCabe, Courtesy Colorado Attorney General
Tracy Vasseur and her mother posed on dating websites as U.S. military personnel serving in Afghanistan. They made off with more than $1 million over a three-year period. Mother Karen was sentenced to 12 years in state prison; daughter Tracy (above) received a 15-year sentence.
Romance
Romance scammers cruise online dating websites, posting hundreds of messages a day.
After weeks of cyber sweet talk tailored to potential victims' responses, schemers inevitably request money — typically via wire transfer — saying they need it for a plane ticket to come visit or to deal with some personal emergency.
See also: Proceed with caution — online dating tips
These cons cost American women 50 and older at least $34 million in 2012 — two-thirds of all the money lost in romance scams. Men 50 and older reported losing $5 million. The average financial loss from these schemes is more than $10,000 per person.
Sean McCabe, Courtesy Columbus Division of Police
John W. Hargrove targeted older people for a phony charity he called Ohio Veterans Source. He was sentenced to 2 1/2 years in prison and ordered to pay more than $2,000 in restitution. Hargrove was convicted for the same con in 2006.
Charity
When help is needed, older people are often among the first to open their hearts and wallets. This helps make them the group most vulnerable to scams feigning aid for veterans, needy or sick children, or victims of a recent disaster, says Bennett Weiner of the BBB Wise Giving Alliance.
See also: 7 ways to spot fake charities after a disaster
Most over-the-transom email solicitations for donations are fraudulent. Never give credit card information to telephone or front-door solicitors. Stick with reputable charities whose names you've known for years.
Sean McCabe, Courtesy The Bangor Daily News
Michael Angelo Giuffrida of Canada received a two-year sentence for his role as a "runner" in a grandparents scam after U.S. Border Patrol officers searching his car found seven cellphones and some $100,000 from recently redeemed wire transfers sent by American grandparents to his co-conspirators.
Grandparents
After gathering names and other details about family members from obituaries, social media and ancestry websites, scammers call, often in the wee hours.
See also: Swear off scammers
They claim to be beloved grandchildren who've been arrested or hospitalized — often while traveling — and need immediate money.
Don't believe it.
Or, at least call the grandchild or parents before heading to Western Union.
Grandparents of college-aged young people are the most frequent targets, reporting losses exceeding $110 million a year.
Sean McCabe, Courtesy Texas State Securities Board
Randall Lee Joyner is part of a ring of 10 unlicensed contractors awaiting trial for allegedly scamming older homeowners out of some $300,000 in repeated bogus home repairs. He was arrested at a home where law enforcement says he was going to make an 11th fraudulent fix.
Home Repair
Unscrupulous contractors arrive unexpected at your front door, claiming to have noticed necessary repairs while driving by.
See also: Avoiding door-to-door sales scams
Some demand upfront payment for materials and then run off with the money. Others do shoddy work like applying used motor oil to recoat driveways.
Some make legitimate repairs for outrageous prices.
Perhaps the worst are "woodchucks." They might initially trim trees or clean gutters, but they continue to recommend more repairs until you're bled dry by them or their "specialist" buddies.
Sean McCabe, Courtesy PA-OAG
Bruce H. Cherry of Philadelphia pleaded guilty to charges of fraud and theft stemming from his role in a ring that scammed $700,000 from at least 218 Pennsylvanians who were sold bogus contracts for non-medical home care as a substitute for long-term health care insurance, prosecutors said.
Health Care
The come-on may be an offer of free medical supplies, a threat of losing Medicare coverage or a promise of better sex with low-cost Viagra.
See also: Help fight health care fraud
The result can be old-fashioned financial fraud or a specialized variant, medical identity theft, in which impostors get health care services under your name, leaving you with the tab.
People 65 and older are prized targets because of Medicare benefits.
In view of continuing public misconceptions about how the Affordable Care Act works, experts predict health care scams will become an epidemic in 2014.
Sean McCabe, Courtesy Texas State Securities Board
Robert Joseph Mangiafico Jr. stole $655,000 from nine older women, persuading them to liquidate assets and make investments through him. He was sentenced to 40 years in Texas state prison for theft and money laundering.
Investment
These come in many forms: Some are free-lunch seminars hawking questionable financial products or legitimate ones with long "hold" periods that are unsuitable for older investors.
Others are pitches from cold-calling telemarketers for "no risk" investments in precious metals or penny stocks.
See also: Can you spot investment fraud?
Losses can be particularly high: Older investors who fell for the bait were out an average of $140,500 each, a study found.
The Psychology of a Con Job
Scammers know what we want: to feel secure, loved and valued. And they know that the older we get, the more we need peace of mind.
To provide it, some use sweet talk, promising a solution to a problem: money for our shrinking nest eggs, companionship for our lonely hearts, a chance to show we matter. Others feign a problem that needs quick solving, perhaps with some warning about a potential danger.
Speak Out: Tell us about scams and fraud you've come across
"The scammer's goal is to get you to not think rationally, to operate on an emotional level," says Jean Mathisen, director of AARP's Fraud Fighter hotline (800-646-2283), which provides counseling, education and victim advocacy. "To put you 'under the ether,' as it's called." Some of the come-ons:
Congratulations, sir. We're sending you a free medical alert device. Now you can relax about your safety.
I know you love me, Grandma. Please send the money so I can get out of jail. I want to come home.
Maybe others don't care about you, but I do. I'll listen.
The natural aging process can cause changes in brain function that benefit scammers. Often subtle, even unnoticeable, these shifts often occur around the mid-60s.
At this age, the processing of information slows. This can make you more likely to fall for scams urging you to act immediately.
Age-related brain changes can hamper the ability to recognize facial expressions that signal deceit.
Lies repeated again and again are more likely to be perceived as true as you age, experts say. Con artists use tactics that rely on an erosion of memory or the ability to focus attention. "You forgot to pay me!" or "We agreed on this price" are phrases that are often used.
Sid Kirchheimer is the author of Scam-Proof Your Life, published by AARP Books/Sterling.
why people might fall for it
Also of Interest
- How to lower your risk of identity theft right now
- The best places to retire
- Get free help with your taxes with AARP Foundation Tax-Aide
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