FRAUD PREVENTION FOR SENIORS

V A N E S S A O LT M A N N , M B A , C P A , C G A , C F I

WHAT IS FRAUD?Fraud is a lie or misrepresentation

that is committed with the purpose of depriving you of something of value

FRAUD AND SCAMS IN THE NEWS

• Vancouver Chinese seniors targeted in scam

• Stealing from mom and dad: Why power-of-attorney abuse against seniors is soaring—and so easy to get away with (July, 2011. Maclean’s)

• Elderly BC fraudster sentenced to 8 years (April, 2010. CBC News. Fraudster Judith Lynn Slobbe)

• VISA scam – Prince George (Video)

THE FRAUD TRIANGLE

Offenders are motivated and able to commit fraud when these three elements are present…

PressureRationalization

Opportunity

THE FRAUD TRIANGLE

OPPORTUNITY

• Red Flags: Power of Attorney with no check on spending by the person holding POA, house is mortgage free and does not have title insurance, valuables are accessible in house, house needs repairs, senior has disposable income, senior gives to charity.

PERCEIVED NEED / PRESSURE (usually a financial need)

• Red Flags: shortage of money, living beyond income, substance or gambling addiction, extra-marital affairs, divorce … (can you think of others?)

RATIONALIZATION

A mental process in which the fraudster justifies his/her actions internally.

• Red Flags: signs of resentment, evasiveness, failure to be accountable for actions.

Red flags are signs that something MAY be wrong. A red flag is not proof, but it is a sign you should take reasonable measures to protect yourself from

possible financial abuse.

CASE – JUDITH SLOBBE Richmond News, Mar 17, 2010

“Slobbe has a history of fraud going back nearly four decades and spanning two continents. She has prior convictions in Australia, where she once lived. She also has several convictions in Canada.”

CBC News, April 22, 2010 – Sentencing. Includes VIDEO

“Judge Ron Fratkin [called Slobbe} a conniving and pathological liar who preyed on the elderly and the sick to support her own lavish lifestyle.

Oct 19, 2012. CBC News Parole Board, Judith Slobbe Parole Hearing.

Predators have no need for rationalization – all they need is opportunity

I TRUSTED HER … I TRUSTED HIM

This is one of the most common comments made by victims of fraud.

Judith Slobbe’s victims trusted her.

Trust is not a control

Trust … but verify

An honest person should have no reason to refuse to explain or verify that things have been done right

Trust is not a control

TELEPHONE FRAUD – CASE

•A True Story – Scam•The Scam - Genisis•Dreams Beyond Thirty presents "SCAM", a film about telephone fraud.

LOTTERIES, SWEEPSTAKES AND CONTESTS

Source – The Little Black Book of Scams, Competition Bureau Canada

CASE –PONZI SCHEMERashida Samji, Notary Public (Arvindbhai Patel AKA Arvin Patel, Coast Capital)• Man says he lost millions of dollars by trusting Rashida Samji – BC

Securities Commission Hearing (Nov 15, 2013 – CBC News Video)• Coast Capital Named in Ponzi Suit – Civil Suit. (Nov 15, 2013 –

CBC News Video)

Background• Vancouver Ponzi Scheme: Rashida Samji Arrested (Huffington Post,

updated Nov 13. Samji released on bail)• Prominent Vancouver businesswoman charged for alleged $17M Po

nzi scheme (Nov 13, 2013, Financial Post. Fraud stretches back to 2003. Links to two other Ponzi schemes)• B.C. judge certifies class-action lawsuit over alleged Ponzi scheme

(Sep 11, 2013. The Vancouver Sun. Defendants named include Samji, Patel, RBC, TD, Coast Capital, Vancouver City Savings, Worldsource Financial Management Inc.

PONZI SCHEMES – RED FLAGS

Common Elements of a Ponzi or Investment Scam

• High Rates of Return

• No Risk

• Act Now!

• Insider Information

• Tax Free

BBBVancouverIsland ScamWATCH Episode 10: Ponzi & Pyramid Schemes (Video)

PONZI SCHEME – VANCOUVER ISLAND

Nanaimo man jailed 6 years for Ponzi scheme, victims across Island

. (Nanaimo Daily News, March 6, 2013. Michael David Chodorowski, $2.5M defrauded, sentenced to 6 years)

PONZIS AND PYRAMID SCHEMES

Source – The Little Black Book of Scams, Competition Bureau Canada

MONEY TRANSFER SCHEMES

Nigerian Scam (419 fraud) AKA Advance Fee Fraud1. “Help me transfer this money out of the country and I’ll give you a

share.”2. “Just send me your bank details and I’ll transfer the money to you

…” 3. A few days later (you’re checking your account daily…) your

contact calls/emails you … “The bank says we have to pay a fee/tax to do the transfer. If you can wire the fee to me, I’ll pay the fee and they’ll release the money to your account.”

4. … and so it goes on.

Overpayment scams5. Fraudster makes a purchase and prepays by check (often from out

of Canada). 6. The check arrives, but it’s an overpayment. 7. Fraudster says, “Keep the check, just send me the overpayment.” 8. Some weeks later, the bank advises victim that the check has

bounced.

MONEY TRANSFER SCHEMES

Source – The Little Black Book of Scams, Competition Bureau Canada

GRANDPARENT SCAM/ EMERGENCY SCAMS• Canadian Bankers Association –Grandparent Scam advice

(Video)

• Canadian Bankers Association – Fraud Resources

GRANDPARENT SCAM

OTHER KINDS OF FRAUD

• Internet Scams

• Health and Medical scams

• Dating and romance scams

• Charity scams

• Job and employment scams

• Service scams

RESOURCES• BBBVancouverIsland ScamWATCH

Listings of BBB YouTube Videos, Alerts, and Resources

• FINANCIAL ABUSE: Protecting British Columbia’s Seniors. SeniorsBC. Linked Document Includes Listings of BC resources including • Public Guardian and Trustee of BC• BC Centre for Ender Advocacy & Support – Seniors Abuse &

Information Line (SAIL)• VictimLinkBC• BC Securities Commission

• The Canadian Anti-Fraud Centre

• Competition Bureau• The Little Black Book of SCAMS (some excerpts from this book

have been reproduced under the terms of Industry Canada’s Permission to Reproduce)

V. G. Oltmann, MBA, CPA, CGA, CFIEmail: Vanessa@Oltmann.caWeb: TheFraudChronicles.comTwitter: @Fighting_Fraud