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Federal officials on Thursday announced what they called the largest coordinated enforcement sweep of elder fraud cases in history. More than 250 defendants across the world are accused of bilking more than a million Americans through fraud schemes that netted more than a half-billion dollars.
The criminal, civil and forfeiture actions were part of federal attempts to crack down on fraud that targets older Americans. Most of the victims are elderly, Justice Department officials said.
“When criminals steal the hard-earned life savings of older Americans, we will respond with all the tools at the [Justice] department’s disposal — criminal prosecutions to punish offenders, civil injunctions to shut the schemes down and asset forfeiture to take back ill-gotten gains,” Attorney General Jeff Sessions said. “Today is only the beginning.”
The federal sweep included the bust of a phony sweepstakes scheme and a deceptive technical-support service, both of which targeted or affected older Americans.
In one case, the Federal Trade Commission (FTC) and Missouri officials charged two men and their sweepstakes operation with bilking tens of millions of dollars from victims across the nation and in other countries. The operation, doing business under dozens of names, allegedly sent millions of mailers falsely indicating that recipients had won or were likely to win as much as $2 million. To get the prize, the supposed winners were told to provide fees ranging from $9 to $139.99.
One mailer proclaimed: “Congratulations, You Have Just Won $1,230,946.00.” But in reality, the recipients had won nothing.
Another claimed the recipient could win big money by answering a simple arithmetic question and paying a registration fee. The mailer failed to disclose that the consumer would have to answer more questions, requiring more fees, ending with a complex puzzle that few, if any, could solve.
Consumers have lost more than $110 million to this particular scheme since 2013, the FTC said.
In another case, the FTC alleges that the defendants helped telemarketers trick older Americans into buying bogus technical-support services by offering security software to prevent computer hackers from yanking money from their bank accounts. The tricksters falsely claimed the software was affiliated with the government, though it was actually worthless, old or available free of charge.
Once fraudsters gained access to the victims’ computers, purportedly to install the security software, the telemarketers used the opportunity to acquire the consumers’ personal information.
“They charged up to tens of thousands of dollars and later concocted additional phony reasons why the consumers needed more software to avoid new cyberthreats,” the FTC reported. “Several people paid more than $50,000, and one person paid almost $400,000 during a period of several years, often utilizing accounts set up by the defendants.”
The enforcement sweep focused on these mass-mailing and telemarketing schemes, along with a wide range of investment fraud and identity theft. Some cases implicated transnational criminal organizations. Others busted individuals who took unfair advantage of older people in their care.
“Today’s actions send a clear message,” Sessions said. “We will hold perpetrators of elder fraud schemes accountable wherever they are.”