Barbara O Malley Director of Montgomery County Department of Health and Human Services 2016 Conference Elder Access to Justice Round Table
David P. Shallcross ELDER ABUSE UNIT LEADER & OUTREACH SPECIALIST PA OFFICE OF ATTORNEY GENERAL 2016 Conference Elder Access to Justice Round Table
Dr. Kenneth Carroll, Ph.D. Clinical Psychology 2016 Conference Elder Access to Justice Round Table
Steven E. Geckle, CFCI Detective - Economic Crimes Unit Criminal Investigations Division Upper Merion Police 2016 Conference Elder Access to Justice Round Table
Goal of This Presentation To examine the various ways professionals may take advantage of their elderly clients to financially exploit them while acting in their best interest.
Objectives Define Financial Exploitation Effects of this Crime on Seniors Professional s Legal/Ethical Responsibilities Why Older Adults are Susceptible Examine Case Examples Warning Signs (Red Flags) Taking Action, Who to Contact
Financial Crime Against Seniors The rate of financial exploitation is extremely high, with 1 in 20 older adults indicating some form of perceived financial mistreatment occurring in the recent past Elder abuse is vastly under-reported; only one in 44 cases of financial abuse is ever reported National Adult Protective Services Association
Financial Exploitation Financial Exploitation the illegal or improper use of an elder s funds, property or assets. An act or course of conduct by a caretaker or other person against an older adult or an older adult s resources, without the informed consent of the older adult or with consent obtained through misrepresentation, coercion or threats of force, that results in monetary or personal loss to the older adult. 35 P.S. 10225.103 2014 PA Supreme Court Report and Recommendations of Elder Law Task Force Financial exploitation is typically perpetrated by someone in fiduciary authority or trusted by the elder person to include family, friends and professional providers.
Professional s Legal/Ethical Responsibilities
Professional s Legal/Ethical Responsibilities Most professions have a designated organization to guide them on ethics within their field. Federal and State Agencies, Boards or Commissions regulate ethics and legal guidelines for many licensed professions. Pennsylvania has many criminal laws that can be charged against a professional who cheats, deceives and steals from our older adults.
Why Older Adults are Susceptible
Why Older Adults are Susceptible 1 st time managing finances (Spouse deceased) Lack of knowledge in financial products/services Naturally trusting a professional person Forgetfulness or other cognitive impairments Socially isolated and may experience loneliness Fear or intimidation
Effects of Crime on Seniors
Effects of Crime on Seniors Financial crimes can leave an older adult to feel embarrassed, depressed and even physically ill. They may not be able to afford to pay for groceries, medication or rent. Almost one in ten financial abuse victims will turn to Medicaid as a direct result of their own monies being stolen from them.
OAG Case Examples
Friday, Feb. 20, 2015 Former insurance agent's criminal scheme targeted elderly victims HARRISBURG PA Attorney General today announced the arrest of a former Collegeville insurance agent accused of illegally accumulating excess commissions at the expense of his clients as part of a criminal scheme known as "churning." From Repeatedly Richard 2007 Piccinini through and deceptively Jr., 2011, of Delaware Piccinini advising County "churned" his clients was charged the to annuities buy with the that organization, sale of his multiple victims dealing purchased annuity in policies proceeds with their to of two unlawful life elderly savings, activity, sisters, selling forgery illegally 52 annuities and withdraw accumulating criminal with a portion use excess premiums of communication of the commissions paid premiums of more at facility. or the than to surrender expense He $2.6 also million. of is the his charged clients Piccinini annuities as part of earned in their a criminal net entirety. commissions Victims scheme known of advised as $194,430, to use "churning." and returned the elderly sisters deception. funds to lost purchase Guilty $204,208 Plea: more in Sentenced surrender annuities. to penalties. Piccinini 5 years earned of incarceration. commission on every sale while his victims incurred penalties on Richard Jr., Delaware County is charged with the alleged sale of multiple annuity policies to two Piccinini elderly sisters. is The charged criminal charges with stemmed one count from an investigation each of conducted corrupt by the Insurance Department annuities and the and, Office then, of Attorney as soon General. as one year had passed, to Churning occurs when an insurance agent or stockbroker causes a client to engage in multiple transactions, to the detriment of the client, but to the advantage of the professional, who earns commissions with three on each counts transaction. each of insurance fraud and theft by Piccinini is accused of repeatedly and deceptively advising his clients to buy annuities and, then, as soon as one year had passed, to withdraw a portion of the premiums or to surrender the annuities in their withdrawals entirety. Piccinini then and perpetuated surrenders. the scheme by causing his victims to use returned funds to purchase more annuities. Piccinini earned commission on every sale while his victims incurred penalties on withdrawals and surrenders. Piccinini also allegedly misled or failed to disclose to clients the nature of both the annuities and the surrender penalties, and he lied to the insurance companies about the clients' financial assets and their intentions to leave their money with the insurance companies for the long term. From 2007 through 2011, Piccinini "churned" the annuities that his victims purchased with their life savings, selling 52 annuities with premiums paid of more than $2.6 million. By engaging in this scheme, Piccinini earned net commissions of $194,430, and the elderly sisters lost $204,208 in surrender penalties. Piccinini is charged with one count each of corrupt organization, dealing in proceeds of unlawful activity, forgery and criminal use of communication facility. He also is charged with three counts each of insurance fraud and theft by deception. Guilty Plea: Sentenced to 5 years of incarceration.
OAG Case Examples
Long-term care policies, turned into long-term thefts April 14, 2009 Case: Barbara Ternak, a licensed insurance agent, stole in excess of $200,000 in connection with longterm medical care policies taken out on behalf of, or which were supposed to have been taken out on behalf of, over 20 persons, ranging in age from 50 to 93, although most were above 60. These policies were intended to pay for longterm care for the victims; several of the victims were already in long-term care facilities or anticipated the need for such care. Barbara Also many Ternak, checks a made licensed out insurance by insurance agent, companies stole in excess and of Ternak $200,000 payable Defendant obtained to in insured is connection charged and parties deposited with with which more over long-term than Ternak one 20 medical obtained hundred counts checks into care of: by policies falsely which telling were clients supposed that they to owed have her been money taken because out on behalf she had of, paid purposes, primarily gambling. checks written by her clients over money Warrants 20 to persons, were an insurance never ranging able company in to age be from served on their 50 on to behalf. Ternak, 93, although who fled most to (or clients family) and made payable to various insurance Ternak obtained and deposited over one hundred checks into her own account and then spent the money for personal her purposes, Insurance own account primarily gambling. Fraud, and then spent the money for personal Specifically, Theft she by deposited: Deception, and Forgery. Personal checks written by her clients (or clients family members) and made payable to various insurance companies which were Hungary. the clients over The (or the 60. Hungarian clients' These family members) policies government believed were were for intended refused premium payments to to pay return or other for amounts longterm extradition. which the clients believed were for premium her, no companies supposedly owed to insurance care companies. for the In some victims; instances, several these funds were of the actually victims owed to the were insurance already companies and in payments supposedly owed to insurance companies. other in instances, long-term Ternak deceived care the facilities clients into believing or anticipated that the money was the owed, need even though for it such was not. care. Also many checks made out by insurance companies and payable to insured parties who were Ternak s clients and personal checks written by Ternak s clients (or the client s family members) and made payable to Ternak or her business, which Ternak obtained by falsely telling clients that they owed her money because she had paid money to an insurance company on their behalf. An arrest warrant was be obtained by Special Agents of the Insurance Fraud Section, OAG, for the arrest of Barbara Ternak, of King of Prussia, PA. Defendant will be charged with more than 20 counts of: Insurance Fraud, Theft by Deception, Forgery. Warrants were never able to be served on Ternak, who fled to Hungary. The Hungarian government refused to return her, no extradition.
OAG Case Examples
Where there is a WILL, there is a way to steal if you employ a crooked attorney Attorney Frank Morgan was a partner in the Norristown-based law firm of McTighe, Weiss, O'Rourke, Troncelliti & Morgan. On February 9, 2006, less than 3 weeks after the death of her husband, 90 year-old Rita K. Trish gave Morgan the power of attorney over her financial affairs. On April 25, 2006, Trish signed a will in which she named Morgan as Executor of her Estate and left the residue of her Estate to a friend. Investigation established that Morgan, using his power of attorney prior to Trish s death, wrote checks on and made withdrawals from Trish s bank accounts, totaling $268,473.19, which were not for Trish s benefit and which were in excess of any legitimate fees for legal or other services. On Morgan, After In a February 1992 Trish s made also using civil death failed 9, his suit, 2006, credit power to at Frank disperse age less card of 91 H. than attorney Morgan on payments, other 3 January weeks Estate prior Jr. was after deposits 4, to 2007, funds accused Trish s the into death Morgan, as death, he of his was of her husband, wrote using accounts obliged funneling his checks to authority and 90 $152,000 do. year-old to on The refinance and total as from made Rita Executor of the Morgan s K. withdrawals Trish estate funds of Trish s gave vacation of spent a Attorney from New Estate, by home Morgan Trish s York wrote Frank man in bank for Nag s checks to his Morgan accounts, on Head, own Villanova and purposes North made the University totaling power Carolina. other plus $268,473.19, of the withdrawals to attorney In cover additional total, his over Morgan which from son's funds her the tuition. were financial spent that Trish not he $555,674.29 Estate s failed for affairs. Trish s to bank accounts, totaling $287,201.10, which were not for the benefit legal of $841,214.49. Morgan the Estate other has is charged Executor admitted services. the with heir of that her one and he Estate count which wrote and of were these dealing left the checks excess in residue proceeds and of legal made of her of and unlawful activities; one count each of theft by unlawful taking Morgan deposited sums directly into his own bank accounts, credit card payments and paid his share of the law firm operating expenses. After Trish s death at age 91 on January 4, 2007, Morgan, using his authority as Executor of Trish s Estate, wrote checks made other withdrawals from the Trish Estate s bank accounts, totaling $287,201.10, which benefit belonging disperse On April were not and until 25, for the to which 2006, benefit Trish after of the were or Trish he Estate the knew in signed a will in which she named or Trish the excess heir Estate was and which of under any were for in legitimate his investigation excess own of legal purposes. and fees Executor for is fees. Including: Morgan s credit card payments, deposits into his accounts and to refinance Morgan s vacation home Estate in Nag s Head, North Carolina. In total, Morgan spent $555,674.29 belonging to Trish or the Trish Morgan Executor these He also withdrawals provided deposited fees. a friend. $22,552.44 sums and that directly they paid into were directly his not own to for Barbara bank the benefit accounts, Ternak, of Estate for his own purposes. has admitted that he wrote these checks and made these withdrawals who and and that they theft was one were by not for failure of Morgan s the benefit to of make clients and who was facing theft Trish, the Trish required Estate, or the disposition; rightful heir. and two credit Trish, the card Trish payments Estate, and or the paid rightful his share heir. of the law firm operating charges, counts of and misapplication expenses. to two of Ternak s of entrusted victims property. as reimbursement Sentenced for Morgan also failed to disperse other Estate funds as he was obliged to do. The total of the funds spent by Morgan her for his own purposes plus the additional funds that he failed to disperse until after he knew he was 30-36 thefts. Months State Corrections, 20 years probation. under investigation is $841,214.49. Morgan allegedly deposited about half the money into his bank accounts, used $120,000 to refinance his Outer Banks beach house and paid off more than $100,000 in credit card debt. In a 1992 civil suit, Frank H. Morgan Jr. was accused of funneling $152,000 from the estate of a New York man to Villanova University to cover his son's tuition. Morgan is charged with one count of dealing in proceeds of unlawful activities; one count each of theft by unlawful taking and theft by failure to make required disposition; and two counts of misapplication of entrusted property. Sentenced 30-36 Months State Corrections, 20 years probation. *Provided $22,552.44 paid directly to Barbara Ternak, who was one of Morgan s clients and who was facing theft charges, and to two of Ternak s victims as reimbursement for her thefts.
OAG Case Examples
Comfort Home Services provided no comfort at all. PA Attorney General s Office, after a Grand Jury investigation charged Ross Rabelow, Bruce Cherry, Tom Muldoon, and Robert Lerner in Montgomery County and arrested on May 21, 2012. The trio operated schemes to defraud elderly victims throughout Pennsylvania, but primarily in the southeast and south-central regions of the Commonwealth. American Comfort Home Care Services; Rabelow, along with Cherry, held out American Comfort as a business selling non-medical home-care service contracts to the elderly. All sales were made by way of in-home contacts directly with the victims. Despite the façade of a legitimate business, American Comfort had no purpose other than to defraud elderly victims. American Comfort contracts purported to provide purchasers a fixed number of hours of services in return for a fixed price. Significantly, the contracts explicitly promised purchasers that they could obtain all of the purchased hours of services upon demand and without condition during the term of each contract. PA American They Global Charges Attorney repeatedly Services filled Comfort General s included: returned Home the Office, Home Criminal Care to many ; after Services; Muldoon Conspiracy, victims a Grand Rabelow, homes Jury Cherry Corrupt investigation along to make with Under Pennsylvania law, these American Comfort contracts constituted unauthorized insurance contracts and Rabelow and Under Cherry urged Pennsylvania their victims to purchase law, these these contracts for American non-medical services Comfort as a substitute contracts for long-term healthcare insurance. More fundamentally, they sold the American with the established intent that they charged Cherry, would constituted additional represented Organization, held Ross not provide the sales services unauthorized Global out Rabelow, Theft as to American promised. these Services, by Deception, Bruce They victims, insurance Comfort to Cherry, their repeatedly returned typically Theft as contracts victims Tom a business by to many victims under Muldoon, Failure as and specialists homes the selling to Rabelow to make guise and Make nonmedical additional of in sales to these victims, typically under the guise of adding hours to, or renewing, existing was done without Robert regard and adding providing Required to the Cherry Lerner hours home-care Disposition, services use or more urged to, in or Montgomery precisely, their and renewing, service Deceptive equipment lack victims contracts existing County of use -- of any to or of the to Fraudulent the to and contracts. the elderly, arrested purchased hours these elderly. Business including May 21, and, as a contracts This All was sales result, many victims for paid thousands, 2012. were and made The sometimes trio by tens operated way of thousands, of in-home of schemes dollars to purchase contacts to services, defraud directly stacking elderly hours with upon victims unused the hours, with no non-medical done home Practices, without safety Dealing inspections, idea of how many hours services regard Proceeds to they had purchased as the a the or for substitute use sale of Unlawful or of more home what time periods for long-term precisely, safety Activity. equipment, purchases covered, health-care the lack of and -- most importantly throughout victims. --without Despite actually Pennsylvania, receiving the any façade services but in of return a primarily legitimate for these payments. in business, A number southeast of victims American also and wrote out checks insurance. use and -- representation of any made payable to More of the Lerner based fundamentally, purchased of the elderly hours on his representation that they as their and, these funds sold health as would the a result, be forwarded American advocate many in to legitimate insurance companies as premium payments on existing policies. south-central Comfort Comfort victims dealing The Court paid with had contracts sentenced thousands, insurance no regions purpose with Cherry of companies. the and other established to sometimes Commonwealth. than 23-46 That to defraud months intent tens supposed of that elderly imprisonment, thousands, they expertise victims. would of American not dollars was 8 years provide the to of basis purchase Comfort probation, the services charging contracts services, 100 as hours victims promised. purported stacking of community thousands, hours to provide upon and service, unused purchasers sometimes and a Global Services for the Home ; Muldoon and Cherry represented Global Services, to their victims as specialists in providing services equipment to the elderly, including home safety inspections, the sale of home safety equipment, and fixed hours, tens ordered representation of number with thousands that of the no elderly he of idea pay hours as their of of restitution dollars, health how of services advocate many in in return of dealing hours in $858,266; return with for insurance they which for had The companies. a those fixed purchased Court That price. victims supposed or expertise was the basis for charging victims thousands, and sometimes tens of thousands of dollars, in return for which those Significantly, for received, sentenced victims what received, time if Muldoon if anything, the periods contracts token to equipment, token their 23-46 explicitly purchases such equipment, months a rudimentary promised covered, imprisonment, smoke such detector, as purchasers and a alarm, rudimentary -- or 8 most emergency years that medical monitor. Like American Comfort, Global Services had no legitimate purpose and served only provide a façade for they importantly smoke of a criminal probation, could scheme. detector, In obtain addition, --without 100 alarm, Muldoon hours all of actually promised the or of emergency community purchased some receiving of his victims medical hours service, that, any in his role of services monitor. and as services their ordered health in advocate, upon return Like he would forward insurance premium payments to the appropriate companies. Relying on these representations, victims demand American and Comfort, without Global condition Services during had the no term legitimate of each purpose wrote checks out directly to Muldoon, but he kept them for himself. for that these pay payments. restitution A of number $169,501; of victims The Court also wrote sentenced out contract. checks and Lerner served to made 11 only ½ payable - to 23 provide months to Lerner a imprisonment, façade based for a his criminal 10 representation years scheme. of In that addition, probation, these Muldoon funds 100 hours would promised of be community forwarded some of service, his to legitimate victims and that ordered insurance he would that companies forward he pay restitution insurance as premium of premium $52,595. payments payments Ross on Rabelow existing to the to appropriate policies. four to 44 companies. Relying on these representations, victims wrote checks out directly to Muldoon, but he kept them for himself. Charges filled included: Criminal Conspiracy, Corrupt Organization, Theft by Deception, Theft by Failure to Make Required Disposition, Deceptive or Fraudulent Business Practices, Dealing in Proceeds of Unlawful Activity The Court sentenced Cherry to 23-46 months imprisonment, 8 years of probation, 100 hours of community service, and ordered that he pay restitution of $858,266; The Court sentenced Muldoon to 23-46 months imprisonment, 8 years of probation, 100 hours of community service, and ordered that he of $169,501; The Court sentenced years in prison and pay restitution of $650,000. Lerner to 11 ½ - 23 months imprisonment, 10 years of probation, 100 hours of community service, and ordered that he pay restitution of $52,595. Ross Rabelow to four to 44 years in prison and pay restitution of $650,000.
Warning Signs
Warning Signs You have not initiated the contact Must act now-rushed into decision No legitimate references available No professional affiliation to organizations No proof of license Sounds too good to be true!
Taking Action Compare other service providers Confirm license with PA Dept. of State Ask someone to look up complaints online Ask friends who they recommend Contact references Check with professional organizations
Resources for help 1-800-490-8505 ELDER ABUSE Area Agency on Aging Local Police Department County District Attorney AARP National Center on Elder Abuse CARIE Center for the Rights and Interests of the Elderly
Resources for help Pennsylvania PA Dept. of State PA Insurance Commission PA Office of Attorney General PA Dept. of Health PA Bar Association PA Dept. Banking & Securities
PA Attorney General Senior Helpline at 1-866-623-2137 elderabuse@attorneygeneral.gov Elderly Abuse Complaint Form We also offer free presentations to senior and civic groups on a variety of topics including how to avoid scams used by con artists who often target older Pennsylvanians and the fastest growing white collar crime in America, identity theft. To schedule a presentation call 717-787-9716 or email senioruniversity@attorneygeneral.gov.