On April 1, 2014, Karla Sibert answered her mother’s cell phone while her mother, Marlene Sibert, 79, was in surgery. On the other end of the line, a woman asked how the product Marlene had bought from Leading Health Source was working.
Karla Sibert, of Palo, Iowa, pretended to be her mother and asked what she had bought and how she had paid for it. She doesn’t recall the answer but after hanging up the phone she got out her mother’s credit card and called the number on the back. She learned that the card had $8,000 worth of charges.
“When she came out of the procedure, I asked her about it,” Sibert said. “She said she had been ordering $500 worth of things to make her feel better.”
Within a few days of calls to all her mother’s credit card companies, Sibert found out her parents had been charged $44,000 over the last 20 months.
“My mother used to stay awake until 3 o’clock in the morning to balance her checkbook if she was a penny off,” Sibert said. “This was an eye-opener to me to realize something was going on with her.”
Each year, $36.48 billion are lost due to elder financial abuse in the United States, according to a 2015 report by True Link Financial, a California-based financial services firm that helps seniors and their families protect themselves from fraud, exploitation, and financial abuse.
The report also showed that 36.9 percent of seniors are affected by financial abuse in any five-year period.
While scams and frauds represent just one small section of elder financial abuse, which also includes exploitation by family, friends and caregivers, they affect a large portion of the population.
Putting a precise number on how many fraud cases occur each year is difficult but the AARP Fraud Watch Helpline reports taking nearly 20,000 calls since Jan. 1, 2015.
In Iowa, Insurance Commissioner Nick Gerhart told IowaWatch the Fraud Bureau of the Iowa Insurance Division had 700 referrals last year, and the Consumer Advocate Bureau had 7,000 inquiries. Some of these are simply complaints from consumers who are not happy with their insurance, but many are fraud cases.
“One thing we do know is that most fraud is unreported,” Gerhart said.
A New York State Elder Abuse Prevalence Study found that for each case of financial exploitation that reached authorities, 44 cases went unreported.
Iowa Assistant Attorney General Chantelle Smith said solid statistics on all forms of elder abuse are lacking in Iowa and across the entire nation. The lack of data stems from a number of causes. Older adults often are ashamed of their abuse; there is no centralized place report it; and for most people, the problem is simply under their radar.
“In cases of child abuse, we pluck a child out immediately, but when it comes to an adult, we say, ‘are you sure?’” Smith said. “‘Are you sure he took your money, or did you misplace that check?’ We’re always looking for some explanation. We try to find excuses.”
Last October, Smith’s office was awarded one of nine three-year, $400,000 grants through the Violence Against Women Act (VAWA) for a program called “Training and Services to End Abuse in Later Life.” Slightly more than half of the funding will be used for training law enforcement, judges, county prosecutors, victim service providers and professionals. The rest will go toward direct services for victims.
Financial exploitation can take place in many ways. Some of the most popular include the IRS scam, when someone calls claiming to be from the IRS and requiring immediate payment, or the IT scam, when someone claims a victim’s computer has a virus that needs to be cleared and directs them to a website which locks the victim out of the computer until payment has been made.
Gerhart said the schemes tend to come in cycles. The IRS scheme skyrockets around tax time while scams connected to Medicare and the Affordable Care Act pop up with greater frequency during open enrollment for healthcare. Scammers simply take advantage of any opportunity available to trick people.
Afterward, many elderly people avoid reporting fraud because of embarrassment, sources said. They may not want their family to question their ability to make wise decisions, and in some cases, they may not realize they’ve been victims until their savings are all but depleted.
In Sibert’s case, both her mother and father suffer from memory loss, though Sibert had no idea her mother had reached a point where she was incapable of making sound financial decisions. Leading Health Source preyed upon this vulnerability.
When taking inventory of all her mothers’ purchases, Sibert found the house full of health supplements in large boxes, stuffed into closets. Close to 90 bottles of a product called “Brain Power,” costing a total of $3,000, promised to restore Sibert’s father’s memory.
“The guy was very attentive to everything my mother would say,” Sibert said. “She always had dry eyes, so they sent her $2,500 of ‘Dry Eye.’ They would just label it themselves and put it on a bottle. I’m sure it’s not what they said it was. He just totally took advantage of her.”
The company managed to charge so much by telling Sibert’s mother her credit card didn’t work and asking for another after maxing out the first card.
Sibert eventually took her story to an AARP luncheon on elder fraud, where she was put in contact with the Iowa Attorney General’s office. The office’s Consumer Protection Division helped investigate and file suit against the Las Vegas-based company Leading Health Source. In the end, Sibert said she got back the $44,000, but only after “nine months of hell.”
Amy Nofziger, director of regional operations for the AARP Foundation, said protecting most elderly people from fraud is simply a matter of education. While the aging brain can make older adults more vulnerable, anyone can be a victim of fraud, no matter their age, if they don’t know what to look for, she said.
“Unless someone teaches you to cook, you don’t know how to cook,” Nofziger said. “Unless someone teaches you the red flags of fraud, you don’t know the red flags of fraud.”
Older adults also may be more available to scammers, being at home more often than younger people and more willing to answer the phone or open the door for strangers.
“They grew up in a different time, when business was done with a handshake,” Nofziger said.
Scammers take advantage of all these qualities and are smart and persistent, winning over victims with charm, or presenting deals that sound very convincing.
Martha-Jo Ennis, 83, a retired school teacher from Marion who was scammed by investment adviser Noah Aulwes, said Auwles was slick — clever and funny. He worked with the youth group at his church. He played piano.
“He was charming,” Ennis said. “I had no reason to suspect him.”
For Ennis, the trouble started when she received two cards in the mail to sign and return for more information—one on investment and one on Medicare. She meant to send in the Medicare card, but accidentally sent the investment card instead. A few weeks later, a man showed up at her door to talk about investment. She told him the card was a mistake but he wouldn’t leave.
Finally, she relented and let him look at her finances. When she asked a question as he was about to leave, he said she would need to have a meeting with his boss, Noah Auwles. Ennis called up her brother to have him join her, thinking he would be a better judge of whether Auwles offered a good deal.
In the end, both Ennis and her brother were fooled by a high interest rate Auwles offered and never delivered. Ennis lost $1 million, including proceeds from the sale of her farm and retirement savings.
In 2014, Auwles was sentenced to up to 10 years in prison for defrauding numerous people, including Ennis, out of their life savings and ordered to pay more than $363,000 to his victims.
Auwles, 56 when sentenced, preyed on older retired people using his claims of Christianity to gain their trust, prosecutors said. From March 2007 through May 2010 he misappropriated about $200,000 of investors’ funds for his personal benefit and to make Ponzi-type payments to other investors.
In the settlement, Ennis got a small amount of her money back but said she will never be in the place she was before it happened. Ennis used to tell her brother he couldn’t go through life believing everyone is a crook, but now she herself says, “don’t trust anybody.”
After receiving a recent call from a scammer claiming to be from the IRS, Ennis simply told the man, “Sir, you’ve got the wrong person. I work for the IRS.”
Nick Gerhart, who helped start the Iowa Fraud Fighters campaign out of the Insurance Division, said he always stresses to elderly people that they don’t have to be Iowa nice.
“It’s okay to hang up on people,” he said. “The IRS is not going to call you asking for certain information. Medicare folks are not going to call you asking for your Social Security number. They already have it.”
He also advises people to learn enough about savings and investment so they can ask questions and be on guard against suspicious schemes.
“A lot of the scams we’ve seen are folks who thought they were going to earn 8, 10 or 12 percent interest,” he said. “Well, that’s not realistic. If you have a deal that sounds too good to be true, it probably is.”
Both Ennis’ and Sibert’s cases are rare in that they were able to get money back. Amy Nofziger said it’s unlikely that fraud victims will retrieve any of their money, especially if it is sent through untraceable funds such as wire transfer or prepaid debit or gift cards.
“When the money’s gone, the money’s gone,” Nofziger said.
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This IowaWatch story was republished by The Gazette (Cedar Rapids, IA), Des Moines Register, Estherville News and Iowa City Press-Citizen under IowaWatch’s mission of sharing stories with media partners.