In an alarming trend, sophisticated international criminals are increasingly defrauding Americans, pilfering tens of billions of dollars annually.
This surge in crime is projected to escalate as the U.S. population ages and technology, including AI, facilitates the execution and concealment of fraudulent activities.
According to ABC News, Kathy Stokes, director of fraud prevention at AARPs Fraud Watch Network, stated that internet and telephone scams have grown "exponentially," overwhelming law enforcement and prosecutors who only manage to apprehend and convict a fraction of the culprits. The victims, often elderly individuals who have lost their life savings to various scams, seldom recover their money. Stokes lamented, We are at a crisis level in fraud in society. So many people have joined the fray because it is pretty easy to be a criminal. They dont have to follow any rules. And you can make a lot of money, and then theres very little chance that youre going to get caught.
A recent incident from Ohio underscores the severity of the issue. An 81-year-old man, William Brock, was targeted by a scammer and allegedly responded with violence, fatally shooting an Uber driver whom he mistakenly believed was part of a scheme to extort $12,000 in supposed bond money for a relative. The scammer remains at large, while Brock, who pleaded not guilty citing fear for his life, was charged with murder.
The prevalence of online and telephone scams has stretched law enforcement agencies and adult protective services thin. Brady Finta, a former FBI agent who supervised elder fraud investigations, likened the situation to "drinking from a fire hose." He added, Theres just so much of it, logistically and reasonably, its almost impossible to overcome right now.
Investigating these scams, particularly those originating overseas, poses significant challenges. Stolen funds are rapidly converted into hard-to-trace cryptocurrency or funneled into foreign bank accounts. Paul Greenwood, who spent 22 years prosecuting elder financial abuse cases in San Diego, noted that some police departments do not take financial scams as seriously as other crimes, leaving victims feeling discouraged and demoralized.
Greenwood explained, Theres a lot of law enforcement who think that because a victim sends money voluntarily through gift cards or through wire transfers, or for buying crypto, that theyre actually engaging in a consensual transaction. And that is a big mistake because its not. Its not consensual. Theyve been defrauded.
The U.S. Justice Department does not impose a blanket monetary threshold for federal prosecution of elder financial abuse. However, some of the 93 U.S. attorneys offices nationwide may set their own thresholds, prioritizing cases with more victims or greater financial impact. Despite this, the Federal Trade Commission reports that the vast majority of frauds go unreported, often due to victims' reluctance to come forward.
Elderly individuals, who collectively hold more wealth, are prime targets for scammers. The impact of these scams can be devastating, as many victims are past their working years and have limited time to recover their losses. The FBIs Internet Crime Complaint Center reported a 14% increase in elder fraud complaints last year, with losses rising by 11% to $3.4 billion.
However, other estimates suggest the annual loss could be much higher. A 2023 AARP study calculated that Americans over 60 lose $28.3 billion each year to fraud. The Federal Trade Commission, accounting for unreported losses, estimated that fraudsters stole a staggering $137 billion in 2022, including $48 billion from older adults.
One such victim, 80-year-old William Bortz from San Diego, lost almost $700,000 to an elaborate scam involving a nonexistent Amazon order, a fake refund processing center in Hong Kong, doctored bank statements, and an instruction that Bortz needed to synchronize bank accounts to get his money back. Despite being a victim, Bortz struggles with self-blame, stating, I understand now why so much elder abuse fraud is never reported. Because when you look back at it, you think, How could I have been so stupid?
The Justice Department argues that the private industry must do more to combat this issue, stating, Private industry including the tech, retail, banking, fintech, and telecommunications sectors must make it harder for fraudsters to defraud victims and harder to launder victim proceeds.
Banking industry officials, while investing heavily in new technologies to stop fraud, believe that banks cannot singlehandedly prevent fraud. They call for an overarching national strategy to combat scammers, criticizing the federal governments current efforts as disjointed and uncoordinated.
Finta, who launched a nonprofit called the National Elder Fraud Coordination Center to foster better cooperation between law enforcement and major corporations, believes that a united front can make a significant impact. He stated, "There's very, very smart people and there's very powerful, wealthy companies that want this to stop. So we do have the ability, I think, to make a greater impact and to help out our brothers and sisters in law enforcement that are struggling with this tsunami of fraud.
The increasing sophistication of scammers and the devastating impact on victims underscore the urgent need for a comprehensive, coordinated response. As the crisis escalates, it is clear that law enforcement, private industry, and the federal government must work together to protect the most vulnerable from this growing wave of fraud.
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