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Utah cases show how scammers defraud the elderly

SHARE Utah cases show how scammers defraud the elderly

Police said residents, including senior citizens, should remember the old adage that if it’s too good to be true, it probably is.

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SALT LAKE CITY — An 86-year-old Sanpete County man thought he had won not one, but two multimillion-dollar sweepstakes.

The only catch? The people allegedly handing out the lucrative prizes told the man he needed to pay taxes on his winnings first, according to court documents.

That began in 2018. To date, Sanpete County sheriff’s investigators say the man has lost about $93,000.

According to a series of search warrant affidavits filed in 6th District Court, when the elderly man’s bank tried to stop him from sending more money, he opened an account at another bank.

“He appeared to understand that he was being defrauded, but he held out hope that they (the alleged sweepstakes winnings) were legitimate,” one of the affidavits states.

The man’s case is one of several investigated recently in Utah involving senior fraud.

A week ago, eight people — including a man who was recently released from the Utah State Prison after serving 29 years for murder — were indicted by a federal grand jury in a so-called “romance fraud” scheme. Frank Gene Powell, 51, and seven others are accused of taking nearly $275,000 from an 80-year-old Hurricane woman under the guise of performing work for the woman.

Investigators say Powell orchestrated the scam and enticed the woman, who authorities say has diminished mental capacity, by telling her he was going to marry her.

In 2019, U.S. Attorney for Utah John Huber said an estimated $3 billion is stolen each year from older Americans through financial investment schemes, grandparent scams, fake prizes, romance scams and fraudulent IRS refunds.

Utah Adult Protective Services investigated more than 5,300 referrals of elder abuse, including 2,600 cases of financial exploitation — the fastest growing allegation it deals with — from approximately the spring of 2018 through the spring of 2019.

According to the Utah Attorney General’s Office, “Fraud schemes targeted at senior citizens vary in scope and scale and can come from trusted relationships or from unknown perpetrators across the country or even world. It is important to be on alert.”

Elderly citizens typically have nest eggs, according to the attorney general’s website, making them targets for scams. But some also have diminished mental capacities and are too ashamed to report fraud once they realize that they’ve become a victim.

AARP has a website, fraudwatchnetwork.org, and telephone number, 877-908-3360, where people can get information about potential scams.

In Wayne County, a search warrant affidavit filed in January stated that detectives were working a suspected case of exploitation of a vulnerable adult involving a 79-year-old woman. The woman opened an account at a bank in 2018 with the alleged perpetrator and deposited a large sum of money, the warrant states. The man then opened a joint checking account with the victim and began spending large sums of money, according to the affidavit.

“Rumors that the perpetrator had been exploiting the victim circulated around the county but no proof was ever found,” the warrant states.

In a separate search warrant affidavit unsealed this week, investigators noted the suspect was “continuing to take (her) money in rumored amounts of $40,000 to $50,000.” But an investigator from Adult Protection Services who was asked to look at the case and “after concluding his investigation ... he believed the exploitation of (her) funds had, in fact, occurred.”

That case remained under investigation and detectives continued to review bank records.

Sanpete County Sheriff’s deputy Derek Taysom said it’s also a good idea for family members of elderly residents to establish a plan so they can check on their loved one’s finances every once in awhile, including their bank accounts, to make sure there’s no unusual activity.

In the case of the Sanpete County resident who believed he’d won cash prizes, starting in June of 2018 “he had been in contact with a company or companies that claimed to be American Sweepstakes Co. They told him that he had won an award of over a million dollars on at least two separate occasions,” according to a warrant affidavit. “He was told, to make the payouts, he would need to cover a portion of the taxes for the total pay off, one being $8 million and the other being $3 million.”

When interviewed by a sheriff’s detective in December, the investigator noted in the warrant that the man “had a hard time explaining what had transpired with the people who were in contact with him. Some aspects of his recall were very sharp and detailed and in others, he struggled.”

The man told police he obtained cashier’s checks or money orders for various amounts ranging from $6,200 to $13,720 and “would then send them to different addresses and different people around the country. Many of these were sent to Costa Rica, which he tried to explain why he was told to send it there but he was unable to explain why and I was unable to understand him,” the warrant states.

The man further told police “he had depleted a $54,000 savings account, an IRA (Individual Retirement Account) containing about $13,000 as well as $3,000 he had in his checking account.

“He said he had obtained a home mortgage loan against the equity in his house ... to help pay the bills on some of the things these frauds had effected. He went on to say, when (his bank) tried to stop him from doing what he was doing” he opened another account at a different bank, the warrant continued.

The detective investigating the case discovered tens of thousands of dollars had been transferred to people in Costa Rica, New Jersey and California, according to the warrant.

Taysom said while other agencies, including the FBI and Utah Attorney General’s Office, are now involved in helping with the case, the odds of catching those responsible is low and it will be a challenge to get the man's money back.

He cautioned others not to fall victim to similar scams by remembering the old adage, “If it’s too good to be true, it probably is.”

And if a person doesn't remember entering a sweepstakes, then they likely have not won anything, Taysom said. Even if they did win, he said the sweepstakes company would just take taxes out of the winnings rather than making someone send money.

Taysom encouraged families to research the types of scams that are out there that target senior citizens, and then talked to their loved ones about them.