A18 Thursday, July 16, 2009
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Economy &Business
It’s Time to Take Notice and Help Stop Scam Artists From Fleecing the Elderly
THE COLOR OF MONEY
MICHELLE SINGLETARY
F
raud is bad enough, but when you have family members or caregivers who are financially abusing their elderly relatives or patients, that’s downright despicable. And yet, in most of the cases of elder financial abuse, the perpetrators are not strangers. Family, friends, neighbors and caregivers are the culprits in 55 percent of the cases, according to a report, “Broken Trust: Elders, Family, and Finances,” released by the MetLife Mature Market Institute. The report was produced in conjunction with the National Committee for the Prevention of Elder Abuse and Virginia Tech. Law enforcement and securities regulators say the recession is pushing more people to steal from well-off seniors.
“There is definitely more fraud than there has been,” said Fred Joseph, Colorado securities commissioner and president of the North American Securities Administrators Association (NASAA). “Elder financial abuse is becoming the crime of the 21st century as the growing senior
population is increasingly targeted.”
The annual financial loss by victims of elder financial abuse is estimated to be at least $2.6 billion, according to the report. The typical victim of elder abuse is a woman over 75 who lives alone.
It’s not surprising that the more health issues seniors have, the more likely they will be victimized. As I searched media reports of abuse for just this year, I found numerous cases where family members and caregivers took advantage of seniors with dementia.
A nursing assistant from the state of Washington was charged with stealing more than $770,000 from the elderly woman she was caring for.
In a Florida case, a man called authorities to report his 80-year-old mother’s hairdresser had stolen her checks. The stylist was accused of taking $25,000 from the woman’s checking account. But get this: During the investigation, police charged the victim’s 52-year-old son — who
AIG Hastens Spinoff Of Life Insurance Unit
By Eileen Aj Connelly
Associated Press
NEW YORK, July 15 — Amer- ican International Group is speed- ing up plans to spin off its Amer- ican Life Insurance Co. unit as an independent public company, the company said Wednesday. The beleaguered insurance gi-
ant, now 80 percent owned by the U.S. government after receiving $182.5 billion in loans, said in March that it would spin off Alico, as the unit is called, and a second unit, American International As- surance, known as AIA Group. The United States was given a $25 billion preferred stake in the two units in June.
While planning to spin off Al- ico, AIG has also been in dis- cussions with MetLife over the possible sale of all or part of the unit. Those talks continue. A spokesman said AIG is simul- taneously moving forward with plans for an initial public offering for Alico. “We are determined to pursue an IPO path for this com- pany to get it out from under the AIG brand as quickly as we can,”
said spokesman David Monfried. AIG will be naming a board for the company and taking other necessary steps to move Alico toward independence. He could not say when an IPO might be scheduled. No further in- formation was filed with the Secu- rities and Exchange Commission as of late Wednesday. In June, AIG said it was placing Alico and AIA Group into special- purpose vehicles ahead of planned IPOs. As part of the plan, the Fed- eral Reserve Bank of New York re- ceived preferred interests in those SPVs. That move was in- tended to cut AIG’s outstanding debt owed on a credit facility with the Federal Reserve Bank of New York to $15 billion from $40 bil- lion.
AIG previously said it also plans to spin off AIU Holdings, its property and casualty insurance business.
The announcement came after the close of financial markets Wednesday. Shares of AIG fell 10 cents to close the regular session at $14.22, despite a broad market rally.
first alerted police — with fraudulently cashing $6,900 in checks from his mentally incompetent mother. Last month in Virginia, a home health caregiver was sentenced to six months in jail for taking $15,000 from an 85-year-old woman suffering from dementia. The victim was bedridden. The financial abuse of seniors has become so prevalent that the NASAA and the National Adult Protective Services Association recently united to develop tips and strategies to protect them. “A silent crime is taking its toll on America — silent because so many of these cases go
unreported,” said Kathleen Quinn, executive director of the protective services association. “This announcement is the first step in a partnership we hope will grow to close the gap on elder abuse.” Following are some red-flag
warnings the NASAA will be providing to adult protective services workers to help them spot and stop potential elder financial abuse:
K Is the senior receiving information about or being asked to invest in unregistered securities or start-up companies? (You’ll have to do some research to find this out.) Securities fraud can be detected by checking with your state securities regulator. Contact information is available at www.
nasaa.org.
K Is the investment high-risk or possibly speculative, involving such things as oil and gas exploration, new or untested technologies, rare metals, or currency trading? K Has the senior been asked to sign blank paperwork or to give discretionary authority over her accounts to an adviser? K Is the senior complaining that his investment adviser won’t give him his account statements or documentation? K Has the senior made out a check directly to the adviser or broker for the purchase of an investment? There’s information on NASAA’s Web site that will assist you in helping seniors avoid these problems. Go to www.nasaa.org and search for “Senior Investor
Resource Center.” To report elder abuse you can contact an adult protective services office at www. apsnetwork.org or through the National Center on Elder Abuse at
www.ncea.aoa.gov or
800-677-1116.
“This type of crime just sets me off,” Joseph said. “You get victims who are in their 70s and 80s being taken for their life savings. What do they do? They can’t earn it back.” If you suspect a senior is being financially exploited, report it — even if the suspected scoundrel is a family member.
K By mail: Readers can write to Michelle Singletary at The Washington Post, 1150 15th St. NW, Washington, D.C. 20071.
K By e-mail: singletarym@
washpost.com.
Comments and questions are welcome, but because of the volume of mail, personal responses are not always possible. Please note that comments or questions may be used in a future column, with the writer’s name, unless a specific request to do otherwise is indicated.
FINANCIAL ABUSE OF SENIOR CITIZENS TAKES MANY FORMS
Elder financial abuse can happen in a number of ways, according to the National Committee for the Prevention of Elder Abuse: K Forging an older person’s signature. K Getting a senior to sign a deed, will, or power of attorney through deception, coercion, or undue influence. K Using the elder person’s property or possessions without permission. K Promising lifelong care in exchange for money or property and not following through on the promise. K Making charges against victims’ credit cards without authorization. K Confidence crimes (“cons”) in which victims are scammed by gaining their trust.
— Michelle Singletary
The Washington Post
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and even got charms to decorate the tops. This year, the shoes are forgotten. “They were their go-to,” Fisher said, “and now they’re just really interested in flip-flops.”
The story of Crocs mirrors the country’s tale of economic expan- sion and contraction. At the height of the real estate market, in 2006, the company sold shares to the public, raising more than $200 million in the biggest stock offering in shoe history. It ramped up manufacturing to keep up with demand, only to then find that shoppers were snapping their wallets shut. Rachel Weingarten, a trend and
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following among landlubbers as well. Gardeners touted their sta- bility, runners enjoyed their light feel, and the chairman of the com- pany’s board wore them with his
“The industry was taken by surprise by the severity of the downturn. It affected us more than most.”
Crocs chief executive
John Duerden
tuxedo.
The company used money from its public stock offering to diver- sify and acquire new businesses, such as Jibbitz, which makes charms designed to fit Crocs’ ven- tilating holes, and Fury Hockey, which used Croslite to make sports gear. It built manufactur- ing plants in Mexico and China, operated distribution centers in the Netherlands and Japan, and forged into the global market- place. More than half of Crocs were sold outside the United States.
Then, chief executive John Duerden wrote in an e-mail: “the industry was taken by surprise by the severity of the downturn. It af- fected us more than most because the brand had been gearing up for a continuation of the extraordi- nary growth in the prior years.” But the shoes were hitting a saturation point; the problem with a nearly indestructible prod- uct is that shoppers rarely need to
BY CHARLIE NEIBERGALL — ASSOCIATED PRESS
As the economy boomed, Crocs became a huge seller. But now cash-strapped consumers have decided they don’t need a second pair.
Waterproof. Smell-Proof. Recession-Proof?
replace it. A foray into Croslite clothing in
2007 fell flat and was quickly scaled back. The company liqui- dated Fury Hockey last year. “They had added a huge amount of infrastructure to meet this demand going forward,” said Jeff Mintz, an analyst with Wed- bush. “Demand fell off, and they had way too much capacity and way too much supply of product.” Who needs a second pair of Crocs in a recession, particularly when the first pair is holding up just fine?
The company swung from a profit of $168.2 million in fiscal year 2007 to a loss of $185.1 mil- lion last year. In its annual report, Crocs said that an independent auditor expressed concerns about “conditions that raise substantial doubt about our ability to contin- ue.” Its stock price has plummet- ed 76 percent. Five months ago, the company announced that it was replacing chief executive Ron Snyder, who went to college with the com- pany’s founders, with Duerden, an industry veteran who ran a consulting firm focused on brand renewal. Duerden believes there is life yet in Crocs and plans to market them to caterers, medical workers and people with foot problems. Actor George Clooney has promised to work with the company, Duerden told analysts. Maybe he could wear a red pair. “The bottom line is, people talk about Crocs,” he said at a confer- ence with analysts. “They either love them or hate them, but it’s in the vernacular.”
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