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Meet The Faces of Fraud

What you can learn from these six scams that ripped off older Americans

Rogues Gallery: Famous Fraudsters

Rob Dobi

Con artists gain an older victim’s trust by faking credentials and manipulating their desire for a secure financial future.

En español | Americans over age 50 are the prime targets of crooks who want to steal what they’ve accumulated over a lifetime.

The FBI lists several reasons why this is true. First, older Americans usually have more money, invested in their homes and retirement savings. They also grew up in a more trusting time. They have specific health needs that can be exploited by con artists. Plus, when older people are scammed, they are often too embarrassed to report the crime.

As a result, scammers stole tens of billions of dollars last year from older Americans and the programs that serve them. Medicare fraud alone is estimated at $60 billion annually. In July of this year, 412 people were busted by federal investigators in health care fraud schemes that netted $1.3 billion.

So who are these thieves? Too often they are people who gained a victim’s trust by having seemingly solid credentials as social workers, doctors, lawyers and financial advisers. They are masters at manipulating an older person’s desire for a secure financial future. Sometimes they prey on their target’s emotions by masquerading as a friend or a love interest.

We’ve put together a rogue’s gallery of people who befriended or pretended to serve older Americans and then stole from them and the programs they count on. These people have all been convicted and are either in prison, heading there or on the run.

For more information on how to avoid being conned, see Scam Alert writer Sid Kirchheimer’s report about the characteristics that thieves look for in their victims.

1. Disability Scam

Lawyer pillages federal funds

He dubbed himself Mr. Social Security in a series of cheesy TV ads. But older Americans with a stake in that program would probably call him a few other names after learning the details of the scam he ran, which bilked the government out of piles of cash.

The appropriately named Eric C. Conn, a Kentucky lawyer, admitted to ripping off taxpayers for nearly $600 million in a scam that targeted Social Security Disability Insurance (SSDI). Then he went on the run. Before he vanished, he had wired large sums of money to overseas banks, the FBI said.

The scheme was depressingly simple to execute. Conn would use flashy ads, including one with a music video featuring girls he labeled “Conn’s Hotties,” to attract customers. He impressed clients by paying $500,000 to install a 19-foot statue of Abraham Lincoln near his offices in rural Stanville, Ky.

During an eight-year period, thousands of ineligible people were enrolled in SSDI, according to court documents. The clients were sent to dishonest doctors, prosecutors said, including clinical psychologist Alfred Bradley Adkins, also indicted in the scheme. There they received phony disability evaluations. Then the applicants had claims approved by Administrative Law Judge David Daugherty — who was charged with taking bribes to rubber-stamp the paperwork.

“The defendants are charged with designing an intricate scheme to fraudulently induce payment of $600 million in federal disability and health care benefits,” said Assistant Attorney General Leslie R. Caldwell.

Daugherty was sentenced to four years in prison for taking over $600,000 in bribes. Adkins was found guilty and is awaiting sentencing. Conn’s cut was estimated at over $23 million, according to federal prosecutors. He pleaded guilty to theft of government money and paying bribes and was facing a 12-year sentence. But he vanished soon after his sentencing. Authorities believe he is overseas.

2. A ‘Custom’ Con

Death didn’t stop the stealing

It was called A Better Choice, a company providing custom in-home services to help older people with chores and their finances.

But hiring the group turned out to be the worst possible choice for at least 12 people, who were bilked out of their life savings by the company and a prominent lawyer.

The crooks targeted older people who appeared to have lots of money but no immediate family available to look after them. The prospective clients were offered an array of help, from taking care of personal business to managing legal and financial matters.

Once on the inside, the scammers would forge power of attorney or trick people into signing it over. Then the bank accounts of the victims were drained. At least $2.7 million was stolen, law enforcement officials say.

“By stealing the life savings of elderly clients who had no family to look out for them, these defendants placed themselves among the lowest con artists,” said New Jersey Attorney General Christopher Porrino.

Five people have pleaded guilty or been found guilty in the case, including attorney Barbara Lieberman; Jan Van Holt, who owned A Better Choice; and Van Holt’s sister, Sondra Steen. The others were Susan Hamlett, who worked for the company, and a former county social worker named William Price, who helped find and defraud the victims.

Van Holt used the stolen funds to buy two Mercedes-Benz automobiles and a condo in Florida, among other things, according to legal documents. Lieberman used some of her ill-gotten gains to pay off her six-figure credit card bills.

Among the victims was a 94-year-old woman who was swindled out of her home through a reverse mortgage signed without her knowledge. She was forced into a nursing home, where she died. Lieberman stole more than $600,000 from a woman in her 90s from an account that she opened in her own name as well as the victim’s. When the woman died at age 95, Lieberman drafted a will naming herself as the executor, and continued to steal from the estate.

The thieves will all spend time in prison. Van Holt drew a 12-year sentence. Lieberman was given 10 years in prison, as was Steen. Hamlett was sentenced to three years in prison, and William Price will spend five years behind bars.

3. Stealing Dreams

Homes lost to flamboyant crook

Sammy Araya wrapped himself in the trappings of a successful businessman — a leased California mansion, several expensive vehicles and a racehorse. He even produced and starred in a television show that ran online called MakeItRain.TV, which showed him flashing stacks of cash and his luxury cars. But Araya, 42, built the illusion of success by cheating hundreds of people, many of them older, out of money they thought was being used to save their houses, according to federal prosecutors. People who had turned to Araya and his fellow fraudsters for help when struggling to pay their mortgages lost thousands of dollars — and their homes.

“Today justice was served to scam artists who preyed upon hundreds of desperate homeowners, taking money in exchange for empty promises,” said Christy Goldsmith Romero, special inspector for the federal government’s Troubled Asset Relief Program.

Typical of his victims was Barbara Barkley, 68, of Chesapeake, Va. Barkley lost her house and her savings to Araya’s group and is now renting from a relative in North Carolina. As she told the Washington Post, “I literally lost everything because of these people, and it is breaking my heart.”

The scam that ensnared Barkley and others targeted people across the country when they needed help paying their mortgages during the housing crisis. The group run by Araya ran ads saying that people could get “mortgage modifications” through a program set up by the Obama administration to help those facing foreclosure.

People were told that if they sent a cash “reinstatement” fee and a “trial payment” that the money would be used to fend off bank creditors. Hundreds fell for the scheme, in part because the ads used language out of the real federal program and had the feel of authenticity. “These defendants preyed upon innocent homeowners when they were at their most vulnerable,” said Leslie DeMarco, an agent with the Federal Housing Finance Agency.

By the time Araya and accomplices Michael Henderson and Jen Seko were arrested, they had stolen at least $11 million, authorities said. And for many homeowners, by the time they figured out that the money being sent was not going to pay their growing debt, it was impossible to save their property.

Araya and the others were convicted by a federal jury earlier this year. In July, he was sentenced to 20 years in prison.

4. NYC Poor Robbed

Crooks used cash for luxuries

It is a noble calling to help care for some of New York City’s poorest older residents. But one couple given that responsibility instead stole nearly $1 million in city tax funds to subsidize their own lavish lifestyle.

The money was given by the city to a nonprofit called the United Block Association and its executive director, Kwame Insaidoo. Last spring, he and his wife, Roxanna, were found guilty of theft in a case that showed the vulnerability of programs designed to help the aging poor.

“The defendants’ brazen theft deprived some of the city’s neediest residents of public money for healthy meals and senior citizen programs,” said Acting U.S. Attorney Joon Kim.

Instead that money paid for the couple’s four-bedroom house on Long Island, expensive clothes and a “late-model luxury sedan,” prosecutors said.

The United Block Association, as a nonprofit, held contracts with New York’s Department of Aging to operate four senior centers in Manhattan. In seven years, the city funneled nearly $12 million to the company to help feed and care for those at the centers.

As that money came in, Insaidoo steered some of it into a shell corporation controlled by him and his wife.

He also set up several bank accounts for the association that the city didn’t know about. And he inflated expenses at the centers by more than 500 percent, according to evidence at his trial. Prosecutors documented $953,875 in stolen funds.

The couple will be sentenced later this year, and face maximum jail time of 95 years for Insaidoo and 75 years for his wife.

Federal prosecutors admitted that poor city management made it easier for them to steal from taxpayers.

In the aftermath of the case, the city’s Department of Aging launched a review of how money that is supposed to help the poor was distributed and monitored.

But nothing justified the actions of these thieves, who “stole food from the mouths of New York’s seniors,” said one law enforcement official on the day they were charged.

5. Dignity Denied

Cheated out of funeral funds

Of all the ways to defraud people, one of the worst has to be cheating them out of the promise of an appropriately dignified funeral.

One group of thieves produced that outrageous outcome many times over, by running a scam that lasted years and cheating nearly 100,000 people nationwide out of more than $450 million.

James “Doug” Cassity, his son Brent Cassity and four other people pleaded guilty to organizing and running a massive prepaid funeral scam that went on for more than 15 years. As part of the plea agreements, the group drew prison sentences ranging from 18 months to 10 years.

The elder Cassity was an attorney who had been disbarred in the 1980s after his conviction for an earlier scam, according to news accounts of his trial.

Far from being rehabilitated, he simply hit on an even more devastating con game, becoming the mastermind of the prepaid funeral fraud, said prosecutors at his trial. The judge at that proceeding described the business set up by Cassity as “an enormous Ponzi scheme.”

His company, National Prearranged Services Inc., made an alluring promise to customers: Pay an upfront fee of up to $10,000, and that money will guarantee that your funeral expenses will be paid.

The company then acted as a broker with whatever funeral home a customer wanted to use. The money was supposed to be placed in a trust and grow through safe investments or through the purchase of a life insurance policy, as long as the client lived.

But instead, the money was stolen, sometimes by altering documents so that the company became a beneficiary of the client.

The conspirators lived lavishly on the stolen funds, which paid for vacations in the Caribbean, numerous extravagant shopping excursions and the purchase of expensive properties in places such as South Florida, Nantucket and Manhattan.

How many people trusted the company set up by Cassity? More than 97,000, according to prosecutors at the sentencing hearing.

The scam victims included private customers, owners of funeral homes, and executives at insurance companies and other financial institutions.

See also: Funeral scams

6. Victims of Love

Men trapped in web of deceit

For older men spending some time in Upper Manhattan restaurants or grocery stores, what seemed like a chance encounter with a younger woman was often the start of a fast slide to losing their retirement nest eggs and their peace of mind.

Mary Evans had cheated at least three men out of a combined $400,000 before she was arrested following an indictment in 2016. She was 44 years old when she was busted — decades younger than her victims. Her scam, according to court documents, was to approach older men in a public place and pretend to know them. She’d secure contact information, then slowly weave a relationship of trust.

She played on the men’s sympathy by concocting stories of an abusive husband and of children who suffered tragic deaths. Then requests for money would commence.

The money was actually used for shopping sprees, according to prosecutors. But by the time the men figured out her game, she had moved on to another mark.

“Companionship came at a high price for the elderly victims in this case,” Cyrus R. Vance Jr., the Manhattan district attorney, said in a statement. One of those victims, a 77-year-old retired worker with the Metropolitan Transportation Authority, gave her $130,000 in cash and goods, including a Mercedes-Benz convertible.

Another, a retired church musical director, 81, gave her $53,000. And a third man, a 73-year-old retired college professor suffering from dementia, was cheated out of more than $200,000.

It was when Evans tried to withdraw another $225,000 from his retirement account that the fund alerted state officials, and the scam began to unravel. Before she was finally busted, Evans had obtained a marriage license in an attempt to marry the professor as a way to get at his money, prosecutors say.

In late 2016, Evans pleaded guilty to grand larceny and scheme to defraud. She was sentenced to up to three years in state prison. And she was ordered in civil court to repay her victims $295,000.

See also: Romance scams

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