Seniors in care are vulnerable to financial exploitation, theft, and scams. Here are some red flags to look for.
A version of this article first appeared on the Workman Forensics Blog and is republished with permission of the authors.
As loved ones age and begin to need extra care, they can sometimes fall prey to financial exploitation, sometimes at the hands of outside scammers. But all too often, it’s an insider — a trusted caregiver, or even a family member — who exploits the situation and helps themselves to assets that do not belong to them. “It’s so easy for someone in physical or cognitive decline to fall victim,” says Amy Peterson, VP Senior Trust Officer at City National Bank in Nashville, who spoke to Pursuit last year about protecting seniors from scammers. “And once a life savings is blown, those assets are usually never recovered.”
If you suspect that someone is taking advantage of an elderly family member — or even if you just have a bad gut feeling about a caregiver — there are ways to peek behind the financial curtain and look for evidence to support or refute your hunch.
One of the first things to consider is the risk category of the person who is watching your relative or loved one. Make no assumptions. Even if the person is a romantic partner, a sibling, or a family friend, ask yourself whether they are at high risk for committing fraud.
Has the person struggled with their finances? Have they recently gone through some sort of significant life change (such as a divorce, business failure, or job loss) that might put additional financial pressure on them? Do they have a bankruptcy or foreclosure in their past? Money trouble is no guarantee that someone will steal, but it does warrant a closer look — especially if the opportunity to steal also exists.
As any fraud investigator knows, opportunity is the second leg of the fraud triangle. If the person you suspect is under financial pressure and has an opportunity to steal — i.e., access to bank accounts or credit cards — it’s time to dig deeper and look for suspicious activity in your loved one’s financial records.
Step 1: Review Bank Statements
One of the first places to look for clues, if you have access, is the bank statements. If the caregiver, trustee, or scammer has control over the bank accounts, they may use them to cover the estate’s expenses. But it’s also an opportunity to embezzle funds — and cover tracks.
Whenever we review bank statements at Workman Forensics, we use a program called MoneyThumb that converts them into Excel format and makes it much easier to visualize the data. While this is a useful step for professionals analyzing a large volume of transactions, anyone can look for similar issues by simply reviewing the statements manually. Just access your online bank statements and scroll through the transactions, looking at every deposit item link and check item link.
The top items to look for as you are scrolling include the following:
- Cash withdrawals
- Transfers to bank accounts you do not recognize
- Wire transfers to bank accounts or for expenses you do not recognize
- Credit card payments
- If they don’t have a credit card, why are there credit card payments?
- If they have a credit card, make sure all of the payments listed on their bank statement are being paid on known credit cards.
- If there is a payment listed, but you can’t find it on the known credit card statements, this is a red flag, and you should consider the recommendations in step 2.
- Two house payments or multiple utility bills
- This is a very common way people steal from estates. Unless your loved one owns multiple homes or commercial properties, there should only be expenses for one current home. Watch for duplicates.
Step 2: Review Credit Card Statements
If the estate uses credit cards, access the online statements and start reviewing transactions. Before deciding whether or not a charge is “bad,” consider the lifestyle of the card users, and base your decision on whether or not a charge aligns with their lifestyle.
With this lens, look for sudden charges that strike you as abnormal.
Step 3: Find Corroborating Information
If you notices anything suspicious after steps one or two, challenge yourself to find another source of information that may confirm or deny your suspicions.
For example, if you find a transfer to a bank account that you didn’t know existed, contact the bank and obtain a copy of the statements. If you find that this account was being used to pay a medical bill, that’s less suspicious than if the bank tells you they can’t provide the statements because the account is not in the name of your estate.
If the latter is true, this is corroborating information.
Takeaway:
If someone is stealing from your loved one’s estate, it’s so important to catch the theft early. It’s much easier to prevent theft than remedy it — so vigilance is key.
To learn more about data sleuthing in an estate, watch Minisode 15: Understanding Data Sleuthing in an Estate.
About the authors:
Leah Wietholter is the CEO of Workman Forensics in Tulsa, Oklahoma. She discovered a talent for forensic accounting as an FBI employee, then worked as a Senior Certified Fraud Examiner at a public accounting firm. She opened Workman Forensics to help clients hone their sleuthing skills and follow patterns to find money. With 13 years of experience and 100 cases under her belt, Wietholter has testified about financial details in state and federal courts.
She hosts industry experts on The Investigation Game Podcast to discuss all things related to investigation.
Alycia Watt has two degrees in communications and radio, television, and film from California State University of Fullerton. Her experience in reporting and corporate PR led her to her current position at Workman Forensics, where she produces (and occasionally hosts) The Investigation Game Podcast and directs social media platforms and advertisements.