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Report finds older Virginians lose $1.2 billion a year through financial exploitation

Report finds older Virginians lose $1.2 billion a year through financial exploitation

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About 44,000 older Virginians may be fleeced out of $1.2 billion each year, and most of the money is taken not by scam artists but by relatives and trusted caregivers, according to a new state report on the financial exploitation of adults.

Only about 1,000 cases come to the attention of the Virginia Department for Aging and Rehabilitation’s Adult Protective Services each year; of those, very few are prosecuted.

Among the rare prosecutions is a case involving a 63-year-old Giles County man whose cerebral palsy left him at the mercy of his caregiver. Suzy Quillen, an Adult Protective Services investigator, said when she would check on him in response to complaints, he would deny he was in danger and was too terrified to accept her business card.

Quillen knew she’d get another complaint. She prepared by combing through two 5-inch-thick case files. She discovered that his court-appointed guardian had died and the relative caring for him had no authority to do so.

The man had a mouthful of broken teeth and bore scars of beatings, starvation and isolation.

“He weighed just 63 pounds the day I lifted him in my arms and took him from the house,” she said.

The relative had pocketed his $1,000 pension checks, month after month, for more than 26 years.

The man just wanted to get his money back and to never again see the caregiver. Quillen said he is thriving now in a long-term care facility and using his money to spring for chocolate cake and ice cream for others, just because he can.

Adult Protective Services works within local social service agencies and is funded by the state and by some localities. Reports are logged into a state system.

Statistically, about 10 percent of the cases substantiated each year are due to financial exploitation. Quillen said she estimates that about 80 percent to 90 percent of neglect cases she handles also have a financial component to them.

Crime underreported

During the last General Assembly session, Del. Christopher Peace, R-Hanover, asked the Department for Aging and Rehabilitation to pull together a work group to figure out the cost of financial exploitation and then recommend ways to stop it.

He handles elder care issues through his law practice and until recently was chairman of Virginia’s Commission on Youth, whose mission includes family members of all ages. He said a Utah report that examined the costs to the state for caring for exploited adults prompted him to begin to look at the cost to Virginia.

The work group looked at substantiated reports in the system to place a value on the adults’ losses, but it was unable to calculate the costs to investigate or provide housing, medical care and food to people whose life savings were stolen. Peace said he might ask the Joint Legislative Audit and Review Commission to build on the group’s work.

The group established that more than 1,000 cases substantiated by Adult Protective Services each year are due to financial exploitation. They reviewed 141 cases. The amounts lost ranged from $10 to $1 million.

In one case, a woman in her mid-70s asked a relative to handle her finances. The relative helped herself to $28,000 and used it to pay for improvements to her own home and car and to purchase jewelry. The relative then screened the mail, leaving creditors’ letters unanswered. The elderly woman lost her home to foreclosure.

The task force calculated the average loss to be about $28,000, and arrived at a value of $28.2 million that was taken last year in known cases.

However, the crime is vastly underreported.

The known loss was multiplied by a factor that is recognized nationally as representing unreported exploitation to arrive at a loss of $1.2 billion a year taken from about 44,000 older Virginians, explained Paige McCleary, director of Adult Protective Services.

“It does come up with a huge number. It is shocking to look at,” she said. “We can’t say this would stand up scientifically. This was not a scientific report by a university. It is what we have as a starting point.”

McCleary said she expects the number to grow as older people carry the majority of the wealth, and the ranks of Virginians older than 60 are expected to swell from 1.4 million to 2.3 million in 15 years.

By far, the vast number of cases that Adult Protective Services substantiates each year are considered self neglect. But those, too, can have an overlay of financial exploitation.

“The caregiver takes control. Maybe it’s, ‘I’ll do the grocery shopping for you. Just give me your credit card.’ They use it as an opportunity to exploit,” she said. “One of the reasons they need help is their financial capacity is diminished. It’s often the first thing to go. They can get dressed, but they can’t manage their finances, so they’ll ask a neighbor for help.”

Older adults also fall prey to home maintenance scams and to telephone callers pretending to be a relative who needs to be bailed out of jail. Mostly, though, the losses come when a family member takes advantage of a parent or grandparent.

“The tough thing for me, what I find so striking, is when we look at the number of family members who are the perpetrator,” she said. “How do you educate people that the person they love the most is the perpetrator?”

Peace said he sees this in his law practice.

“The problem is they get a power of attorney from OfficeMax and go to a UPS store or bank and have it notarized without anyone understanding what it means or if the person has the capacity to execute a power of attorney,” he said.

Peace said a power of attorney can be misused and that there isn’t a mechanism that draws independent oversight.

Peace, who sits on the House Appropriations Committee, thinks Virginia should provide more resources for Adult Protective Services, for the public guardianship program that allows the court to appoint and oversee the person handling the affairs of an incapacitated adult, and for education and training.

“I want to create a culture of reporting and investigating much like we did with domestic violence and child abuse,” he said.

Peace acknowledges the difficulty in reporting suspicions about a relative but said others have to honor their loved ones who might not be able to understand that they are being exploited or are afraid to report it.

Most reports come from financial institutions, with family members the second most frequent reporters.

“Something that is particularly galling to me is in many cases the complaints are made by children after the fact,” said Roanoke Commonwealth’s Attorney Donald Caldwell. “The parent dies and the estate is not as big as they thought it would be. They find out the neighbor who was helping the parent was helping themselves. So many times families don’t want to have anything to do with the aging until it comes time to read the will.”

He said in other cases the child or children take over the care and isolate the parent. Caldwell cited an extreme case recently in Franklin County where a couple hid a relative’s body in order to continue to collect retirement income.

“Another conundrum is how to determine whether someone is aging and is at a point they are being taken advantage, or if they are just making a decision you and I wouldn’t make,” he said. “They may want to give a lump sum of money to a relative or a stranger because that person was nice for taking them to the mall.”

Few prosecutions

While Child Protective Services has the authority to remove a child from a dangerous home, adults have to agree to leave or to have services provided to them, unless a circuit court judge finds they lack the capacity to make those decisions.

Quillen said even when she has a slam-dunk case, prosecution might not occur. She had a case involving a wealthy woman whose caretaker had run up charges including one for breast implants. Quillen said the relative who was handling the woman’s finances blamed himself for not reviewing the credit card bills. The perpetrator was not prosecuted. The woman thought that if her circumstances became public, she’d be vulnerable to other predators.

Quillen said the woman had a realistic concern, but she also knows that the caretaker might prey on someone else. She would like to see a centralized registry of people who exploit the elderly.

Absent that, she said, the Giles County commonwealth’s attorney pushes at sentencing to prohibit the perpetrator from ever again acting as a guardian, conservator or caregiver.

Quillen has developed relationships with other agencies that care for the elderly and with law enforcement and prosecutors. Her agency receives zero local dollars and cannot pay for medication, food, electricity and other services that some better-financed social service agencies can.

Instead she has looked to relationship building. Efforts in Giles to investigate and prosecute financial exploitation were singled out for commendation in the department’s annual report. Quillen reaches out to forensic auditors at the Virginia State Police and takes cases to the commonwealth’s attorney.

The arrangements in Giles County aren’t uniform across Virginia.

The work group’s report found that half of the 141 cases they reviewed were referred to law enforcement. Eight were prosecuted and two resulted in convictions. It was not known why more weren’t referred or prosecuted.

State code mandates reporting to police if the amount lost exceeds $50,000. McCleary said that “all relevant cases” are forwarded to law enforcement, but that Adult Protective Services’ role is to stop the offense and put in places safeguards to prevent recurrence.

The report said, “Anecdotal information from APS workers suggests that some law enforcement officials view exploitation involving family members as a civil and not a criminal matter particularly when the victim gave power of attorney to the perpetrator.”

The report recommends language changes to broaden the definition of financial exploitation. It also makes a number of suggestions to improve reporting by financial institutions and to offer training to bank employees and Adult Protective Services staff — and because staff generally has a background in social services, not finance, technical assistance in reviewing financial transactions.

The task force, which included bankers, prosecutors, police and elder adult advocates, also recommended a statewide coalition charged with continuing to address financial exploitation.

Peace said he supports an ongoing effort and plans to bring the report’s recommendations to his colleagues during the upcoming General Assembly session.

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