Meet The Faces of Fraud

Americans over age 50 are the prime targets of crooks who want to steal what they’ve accumulated over a lifetime.

The FBI lists several reasons why this is true. First, older Americans usually have more money, invested in their homes and retirement savings. They also grew up in a more trusting time. They have specific health needs that can be exploited by con artists. Plus, when older people are scammed, they are often too embarrassed to report the crime.

As a result, scammers stole tens of billions of dollars last year from older Americans and the programs that serve them. Medicare fraud alone is estimated at $60 billion annually. In July of this year, 412 people were busted by federal investigators in health care fraud schemes that netted $1.3 billion.

So who are these thieves? Too often they are people who gained a victim’s trust by having seemingly solid credentials as social workers, doctors, lawyers and financial advisers. They are masters at manipulating an older person’s desire for a secure financial future. Sometimes they prey on their target’s emotions by masquerading as a friend or a love interest.

We’ve put together a rogue’s gallery of people who befriended or pretended to serve older Americans and then stole from them and the programs they count on. These people have all been convicted and are either in prison, heading there or on the run.

For more information on how to avoid being conned, see Scam Alert writer Sid Kirchheimer’s report about the characteristics that thieves look for in their victims.

1. Disability Scam

Lawyer pillages federal funds

He dubbed himself Mr. Social Security in a series of cheesy TV ads. But older Americans with a stake in that program would probably call him a few other names after learning the details of the scam he ran, which bilked the government out of piles of cash.

The appropriately named Eric C. Conn, a Kentucky lawyer, admitted to ripping off taxpayers for nearly $600 million in a scam that targeted Social Security Disability Insurance (SSDI). Then he went on the run. Before he vanished, he had wired large sums of money to overseas banks, the FBI said.

The scheme was depressingly simple to execute. Conn would use flashy ads, including one with a music video featuring girls he labeled “Conn’s Hotties,” to attract customers. He impressed clients by paying $500,000 to install a 19-foot statue of Abraham Lincoln near his offices in rural Stanville, Ky.

During an eight-year period, thousands of ineligible people were enrolled in SSDI, according to court documents. The clients were sent to dishonest doctors, prosecutors said, including clinical psychologist Alfred Bradley Adkins, also indicted in the scheme. There they received phony disability evaluations. Then the applicants had claims approved by Administrative Law Judge David Daugherty — who was charged with taking bribes to rubber-stamp the paperwork.

“The defendants are charged with designing an intricate scheme to fraudulently induce payment of $600 million in federal disability and health care benefits,” said Assistant Attorney General Leslie R. Caldwell.

Daugherty was sentenced to four years in prison for taking over $600,000 in bribes. Adkins was found guilty and is awaiting sentencing. Conn’s cut was estimated at over $23 million, according to federal prosecutors. He pleaded guilty to theft of government money and paying bribes and was facing a 12-year sentence. But he vanished soon after his sentencing. Authorities believe he is overseas.

2. A ‘Custom’ Con

Death didn’t stop the stealing

It was called A Better Choice, a company providing custom in-home services to help older people with chores and their finances.

But hiring the group turned out to be the worst possible choice for at least 12 people, who were bilked out of their life savings by the company and a prominent lawyer.

The crooks targeted older people who appeared to have lots of money but no immediate family available to look after them. The prospective clients were offered an array of help, from taking care of personal business to managing legal and financial matters.

Once on the inside, the scammers would forge power of attorney or trick people into signing it over. Then the bank accounts of the victims were drained. At least $2.7 million was stolen, law enforcement officials say.

“By stealing the life savings of elderly clients who had no family to look out for them, these defendants placed themselves among the lowest con artists,” said New Jersey Attorney General Christopher Porrino.

Five people have pleaded guilty or been found guilty in the case, including attorney Barbara Lieberman; Jan Van Holt, who owned A Better Choice; and Van Holt’s sister, Sondra Steen. The others were Susan Hamlett, who worked for the company, and a former county social worker named William Price, who helped find and defraud the victims.

Van Holt used the stolen funds to buy two Mercedes-Benz automobiles and a condo in Florida, among other things, according to legal documents. Lieberman used some of her ill-gotten gains to pay off her six-figure credit card bills.

Among the victims was a 94-year-old woman who was swindled out of her home through a reverse mortgage signed without her knowledge. She was forced into a nursing home, where she died. Lieberman stole more than $600,000 from a woman in her 90s from an account that she opened in her own name as well as the victim’s. When the woman died at age 95, Lieberman drafted a will naming herself as the executor, and continued to steal from the estate.

The thieves will all spend time in prison. Van Holt drew a 12-year sentence. Lieberman was given 10 years in prison, as was Steen. Hamlett was sentenced to three years in prison, and William Price will spend five years behind bars.

3. Stealing Dreams

Homes lost to flamboyant crook

Sammy Araya wrapped himself in the trappings of a successful businessman — a leased California mansion, several expensive vehicles and a racehorse. He even produced and starred in a television show that ran online called MakeItRain.TV, which showed him flashing stacks of cash and his luxury cars. But Araya, 42, built the illusion of success by cheating hundreds of people, many of them older, out of money they thought was being used to save their houses, according to federal prosecutors. People who had turned to Araya and his fellow fraudsters for help when struggling to pay their mortgages lost thousands of dollars — and their homes.

“Today justice was served to scam artists who preyed upon hundreds of desperate homeowners, taking money in exchange for empty promises,” said Christy Goldsmith Romero, special inspector for the federal government’s Troubled Asset Relief Program.

Typical of his victims was Barbara Barkley, 68, of Chesapeake, Va. Barkley lost her house and her savings to Araya’s group and is now renting from a relative in North Carolina. As she told the Washington Post, “I literally lost everything because of these people, and it is breaking my heart.”

The scam that ensnared Barkley and others targeted people across the country when they needed help paying their mortgages during the housing crisis. The group run by Araya ran ads saying that people could get “mortgage modifications” through a program set up by the Obama administration to help those facing foreclosure.

People were told that if they sent a cash “reinstatement” fee and a “trial payment” that the money would be used to fend off bank creditors. Hundreds fell for the scheme, in part because the ads used language out of the real federal program and had the feel of authenticity. “These defendants preyed upon innocent homeowners when they were at their most vulnerable,” said Leslie DeMarco, an agent with the Federal Housing Finance Agency.

By the time Araya and accomplices Michael Henderson and Jen Seko were arrested, they had stolen at least $11 million, authorities said. And for many homeowners, by the time they figured out that the money being sent was not going to pay their growing debt, it was impossible to save their property.

Araya and the others were convicted by a federal jury earlier this year. In July, he was sentenced to 20 years in prison.

4. NYC Poor Robbed

Crooks used cash for luxuries

It is a noble calling to help care for some of New York City’s poorest older residents. But one couple given that responsibility instead stole nearly $1 million in city tax funds to subsidize their own lavish lifestyle.