NAELA News August, 1999 - National Academy of Elder Law ...

NAELA News ● August 1999
When the Con Artist
Comes: An Attorney’s
Guide to Assisting Elderly
Victims of Interstate Fraud
by Seth Hopkins
Introduction
Each year, over 14,000 illegal
telemarketing schemes rob thousands of
Americans out of $40 billion. Sadly, more
than half of those victims are elderly–the
over 50 group who have often struggled
to accumulate resources necessary to get
them through their retirement years. The
fraudulent operators recognize that the
combination of years of saving and feelings
of vulnerability and isolation creates
easy marks. They may also realize that
many elders are reluctant to contact anyone
about what they perceive as an embarrassing
or misunderstood situation.
This allows the fraud to become more
brazen, since the chances of being reported
and caught
may be relatively
low.
The situation
is not likely to improve.
A quick
glance at demographics
explains
why this type of
crime is lucrative
and how much
more appealing it is
likely to become.
By 2020, aging
baby-boomers will
account for a 71
percent increase in
the elderly population.
By then, one
in six Americans
will be over age 65.
As the number of
older Americans
increases, this problem will grow.
In March, 1999, at a Senate hearing
on “Sweepstakes Fraud,” several witnesses
told heart-wrenching stories of
how their parents and other elderly
Americans were spending thousands of
“Unfamiliar with the
sophistication of
modern advertising,
the victims felt that
they were singled out
to win and gladly
dipped into their
savings for what they
believed was an
inevitable prize.”
dollars per month trying to win sweepstakes
contests which required “entry
fees” and offered ridiculous, if not impossible
odds. One witness complained
that the elderly were convinced of the
legitimacy of the sweepstakes by the
gimmicky brochures and the form letters
with authentic looking personalized
“post-it” notes attached. The witnesses
theorized that the technique was effective
because these victims had grown
up before computers allowed mass production
of “personalized” letters promising
money or prizes. Unfamiliar with
the sophistication of modern advertising,
the victims felt that they were singled
out to win and gladly dipped into their
savings for what
they believed was
an inevitable prize.
The witnesses
speculated that
another reason for
the vulnerability,
was that many of
these Americans
grew accustomed
to doing business
in a world when it
was not important
to read the fine
print. Many elderly
Americans assume
that a
person’s word is
his/her bond.
Congress has
taken the first
steps toward
cracking down on
these types of activities.
One of the legal community’s first
problems in addressing this type of crime
is to make victims feel comfortable coming
forward with their stories. As with
any social challenge, public awareness
is one of the most important tools available.
Local media can expose fraud rings
and common scams. Once a person
comes forward, there are two legal remedies
available: a criminal prosecution
and a civil lawsuit. This article will focus
on the tools available to prosecutors.
The Prosecution:
Statutes Available
Under Federal Law
Because many organizations are
fairly large and cross state borders, federal
law is a particularly appealing forum
in which to prosecute. Since the complexity
of elder fraud is likely to increase
over the years, the vast resources and
expertise of the FBI is well suited to
handle this type of case.
The nature of federal law also makes
it an appropriate tool. Several white collar
statutes overlap, providing multiple
laws to cover similar offenses. If there is
not enough evidence to find a defendant
guilty of one crime, he or she may not be
able to escape another. Furthermore, the
Sentencing Guidelines, which mandate a
punishment range for each type of crime,
provide tougher penalties for those who
victimize a vulnerable person or engage
in telemarketing fraud.
The new Telemarketing Fraud law
strengthens other laws by enhancing
some penalties. It defines “telemarketing”
as requiring at least one interstate telephone
call designed to promote a plan,
program, promotion, or campaign to induce
the purchase of goods or services
or participation in a contest or sweepstakes.
This statute does not apply to
people or companies who solicit sales by
mailing a catalog that:
1. Contains a written description or
illustration of the goods or
services offered for sale.
2. Includes the business address of
the seller;
3. Includes multiple pages of written
material or illustration; and
4. Has been issued at least once a
year.
Congress provided severe penalties
for those who commit telemarketing
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