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In rare cases, victims may be contacted about an ongoing investigation of their case or charges that have been filed. Federal and state victim rights laws require that victims be notified of any court events, and of the order of restitution if convicted (in most cases).  Other rights may also incur that should be shared by those offices upon contact.

Civil Cases

If you believe the fraud perpetrator has assets, you may be able to recover losses through a civil lawsuit. Contact your state or local Bar Association for the names of attorneys who specialize in this area of law to determine if your case is appropriate for civil action. This normally would only apply for known perpetrators within the U.S.

Criminal Convictions

Restitution is an order by the sentencing judge, ordering a convicted defendant to pay identified victims for certain losses as a result of the crime. In many types of federal and state crimes, it is mandatory for a convicted defendant to be ordered to pay restitution. 

Unfortunately, as a practical matter, a convicted defendant who has no money or limited potential to make money may be unlikely to ever make meaningful restitution in a federal or local prosecution, particularly in fraud cases with many victims. 

In some cases, law enforcement authorities overseas who have enough leads may apprehend the scammers and seize property purchased using the money taken from many victims. There have been instances where law enforcement has been able to sell the property and allocate proceeds to victims and/or their families back in the U.S. However, in most cases, the federal and state prosecutors work to ensure that any assets owned by a sentenced defendant, can be considered for payment of court-ordered restitution. A federal order of restitution is enforceable for twenty years, from the time a criminal judgment requiring restitution is filed (plus the time incarcerated).  

We would like to acknowledge the Los Angeles Scam Working Group and Bet Tzedek, whose research informed this article.

Sadly, there are many cases where older adults do not (or cannot) realize they are ensconced in a scam. If you believe your family member is in that situation, there are a few avenues you can explore.

First, contact the person’s financial planner or estate attorney (if they have one). Victims may be more likely to listen to advice from their planner, attorney, or financial advisor than from a family member, especially if they have worked together for many years. These professionals may also help in reporting the crime and helping with tax issues that result from the fraud.

As a last effort to combat continued victimization, a conservatorship over the estate may be necessary. A conservatorship over the estate reassigns control over a victim’s finances. A conservator is appointed by a judge for the benefit of someone who has become incapacitated.  A judge is the only authority who can make the determination that an older or other vulnerable adult ,or “conservatee,” is no longer competent to handle his/her financial affairs. (Note that some states use the term “adult guardianship” in reference to conservatorships.)

Courts have broad discretion when determining who should be appointed as a conservator.  Although they generally choose a spouse, adult child, or other close family member to serve in this important capacity, the choice still belongs to the court. A court-appointed conservator of the estate manages the client’s finances, locates and takes control of the assets, collects income due, pays bills, invests the client’s money, and protects the assets. An independent professional, such as an attorney or accountant, may instead be appointed, depending on the circumstances.

Advantages of conservatorship:

• Court supervision over the conservator is required to make vitally important decisions, which provides for greater protection for the conservatee.
• A legal conservatorship provides protection against breaches of fiduciary duty or mismanagement of funds. Some states require conservators to file an inventory listing all the conservatee’s property with the court. The conservator must then continue to provide the court with accounts that reflect all transactions involving the conservatee’s assets.

Disadvantages of conservatorship:

• The costs can be upward of $1500, depending on complexity and if a bond is needed. 
• The time required for processing a conservatorship petition is typically between 2-3 months, though emergency or ‘temporary’ conservatorships may be considered in dire situations that require an expedited process.
• A conservatorship usually does not end until the conservatee dies. The conservator may be in charge of the conservatee’s financial affairs for a very long time (or at least until the court determines the conservatorship is no longer necessary). 
• Conservatorship proceedings are a matter of public record, which means the assets of the conservatee may also be made public.

Note: A declaration of capacity may not be necessary in situations when circumstances show that the proposed conservatee cannot manage his or her finances or is a victim of undue influence.

We would like to acknowledge the Los Angeles Scam Working Group and Bet Tzedek, whose research informed this article.

Conduct a thorough review of the state of your family member’s finances:

• Review bank accounts, insurance policies, investments, and annuities for changes in account ownership or beneficiaries. Rather than taking money while a senior is alive, some sophisticated scammers may try to switch beneficiaries or account ownership so that assets will legally transfer to them upon the senior’s death.
• Review any wills, trusts, and powers of attorney. Watch for changes that may have been made under undue influence.
• Sign your family member up for a credit-monitoring service, which will send alerts out for activity that shows up on credit reports. Note that this monitoring will not tell you when someone has withdrawn money from the account.

Federal agencies can help victims of identity theft. They also provide useful information about reporting a fraud what steps to take if your identity is stolen, and what your rights are as a victim of identity theft. See:

• Identity Theft Resource Center:  https://www.idtheftcenter.org/, 1-888-400-5530 (English and Spanish)
• Federal Trade Commission:  https://www.identitytheft.gov

Fraud Alerts and Credit Freezes

Fraud victims have the option of placing a temporary fraud alert on their credit report. 

Fraud alerts ensure that creditors contact a person before any new accounts are opened in his/her name, or when changes are made to his/her existing accounts. Only people who have had their identity stolen, or who suspect it may have been stolen, may place fraud alerts.

To create a temporary Fraud Alert, contact one of the three major credit bureaus:

• Equifax: http://www.equifax.com; 800-525-6285 
• Experian: http://www.experian.com; 888-397-3742 
• TransUnion: http://www.transunion.com; 800-680-7289

The credit bureau you contact will place alerts with the other two credit bureaus. After placing an alert, a victim is entitled to ask for a free copy of credit reports from all three major credit bureaus.

Fraud alerts are mainly effective in preventing new credit accounts from being opened in a victim’s name. They are not likely to stop thieves from using a victim’s existing accounts or from opening new accounts, especially those for which credit is not checked. Furthermore, businesses can still check a victim’s credit report when a fraud alert is in place.

There are two types of fraud alerts:

• Initial Fraud Alert. If you’re concerned about potential identity theft, this fraud alert will protect a potential victim’s credit from unverified access for at least 90 days. You may want to place a fraud alert on behalf of a victim if their wallet, Social Security card, or other personal, financial, or account information was lost or stolen. In many scams, victims provide personal identifying information such as Social Security numbers, date of birth, bank account numbers, credit card numbers, etc.—often from the mistaken belief that the scam perpetrator is legitimate—in hopes of winning a lottery, assisting a ‘romantic partner’, or helping a loved one they believe may have been hurt or arrested overseas. Victims of such scams are vulnerable to being victimized through other scams i. Such scams often include identity theft, including the filing of tax refunds impersonating the victim. Taking steps to protect one’s credit and financial identity can be critical.
• Extended Fraud Alert. An extended fraud alert will protect the credit of an identity theft victim for up to seven years.

Credit Freezes prevent potential creditors and other third parties from accessing a victim’s credit report, unless a victim lifts the freeze or already has a relationship with the company. Some consumers use credit freezes because they feel this option provides more protection.

We would like to acknowledge the Los Angeles Scam Working Group and Bet Tzedek, whose research informed this article.

The intent for many criminal enterprises is to steal as much as possible from a vulnerable adult. This leads some older adults to borrow money from family and friends, maximize credit cards, obtain second mortgages, or ‘cash in’ securities and other assets. Scams can also include the theft of personal identifying information to enable future crimes.

In many cases, a victim may be ‘judgment proof,’ meaning their assets and income are so depleted that they would be unable to pay on a civil judgment against them. Fraud victims who are under pressure from creditors should consult with an attorney who specializes in consumer issues or elder/estate protection, or contact a legal aid agency if income and assets are too limited to hire a lawyer. An attorney can help draft a ‘judgment proof’ letter notifying a victim’s creditors that the person was a victim of one or more financial crimes/scams, and proving that the crimes were reported to the police as well as the FTC and the FBI via IC3.gov. The letter can also document that the victim does not have the income or assets to pay their debts.  If cognitive impairment was diagnosed, that may also be included in the notification, depending on privacy laws and the permission of the victim.

Non-profit consumer credit counseling centers can provide assistance in contacting creditors, renegotiating credit card and other debt, and providing financial counseling on options, including bankruptcy. Some bankruptcy counselors also provide credit counseling and debtor education. Furthermore, debtor assistance programs may be available from the state bankruptcy court.

Government programs can help refinance mortgages, which may be helpful in managing debt incurred by the crime. See www.makinghomeaffordable.gov.

Finally, bankruptcy itself may be a reasonable option to consider. Be sure to obtain legal advice if you plan to explore bankruptcy. Following are a few bankruptcy counseling and court resources:

Bankruptcy counseling and court resources:

• U.S. Bankruptcy Court list – http://www.uscourts.gov/services-forms/bankruptcy/credit-counseling-and-debtor-education-courses
• US Dept. Justice list – https://www.justice.gov/ust/list-credit-counseling-agencies-approved-pursuant-11-usc-111

We would like to acknowledge the Los Angeles Scam Working Group and Bet Tzedek, whose research informed this article.

Victims can be considered liable for serious tax consequences for money stolen by financial predators. In such cases, victims and their family members are encouraged to consult with a tax professional or the IRS about if, when, and how such losses may be deducted as a loss. When doing so, it is helpful to have documentation proving the fraud has been reported, such as  police reports, as well as reports sent to the Federal Trade Commission (FTC), the Federal Bureau of Investigation’s (FBI) Internet Crime Complaint Center via IC3.gov, the IRS, and state tax authority.

The IRS has an independent Taxpayer Advocate Service (TAS) to inform taxpayers of their legal rights and assist with resolving complicated tax issues. Contacting them may help provide a tax relief remedy for victims, especially if 401K accounts were accessed or other taxes owed as a direct result of the crime.

TAS phone number (for general questions): 1-877-777-4778

TAS Online (for identifying local offices): https://taxpayeradvocate.irs.gov/ 

We would like to acknowledge the Los Angeles Scam Working Group and Bet Tzedek, whose research informed this article.

Once criminals have stolen funds from a vulnerable adult, they may try to enlist their victim in a form of money laundering, which is illegal and potentially dangerous. It’s important to educate adults about money mule patterns and behaviors so they can recognize the signs and keep themselves safe.

Predators may enlist victims to launder money, electronic equipment, gift cards and other items in many situations. Common tactics / schemes include:

• Work at home schemes – Victims answer an ad, mailing, or email offering the opportunity to work at home; they are then hired as a ‘reshipper’ or secret shopper.
• Romance schemes – Victims are asked to help a new romantic partner they meet online by opening a bank account in the person’s name, which is then used to transfer money. The victim may also be asked to send their own money to alleviate their supposed ‘romantic interest’ with business or personal hardships.
• Lottery schemes – Victims are asked to help scammers transfer money after they have “won” money in a sweepstakes or lottery.

Clearly, most victims do not realize they are being used in these situations, as they believe they are helping their phone or internet friend. Some victims are even asked to travel overseas to meet their contact. They may be arrested for helping to smuggle drugs or money across borders, or even kidnapped and their family extorted for money to gain their return. 

Victims used as money mules are often part of a larger scheme designed to extract money from an organization and/or other people. Unwitting money mules are increasingly used to open bank accounts and enable the transfer of funds that they don’t realize actually belong to other victims. Victims may also become mules by following the directions of a scammer to forward money that is mailed or sent to them by another victim (or by the scammer).

To learn more, see:

• US Computer Emergency Readiness Team – Understanding and Protecting Yourself Against Money Mule Schemes
• FBI – Don’t Be A Mule, Money Mule Awareness
• Better Business Bureau – Fall in Love – Go to Jail: Report on How Some Romance Fraud Victims Become Money Mules

We would like to acknowledge the Los Angeles Scam Working Group and Bet Tzedek, whose research informed this article.