MINORITIES AS TARGETS OF FINANCIAL CRIMES

Erin, McKenzie, Charlotte, & Kristi

WHO IS TARGETED?

American Indians, Alaska Natives, African Americans and Hispanics are more likely to be victims of fraud than non-hispanic whites.

Hispanics are more than twice as likely as whites to be victims of fraud

Older, less educated, and widowed, divorced, or single consumers were found to be most vulnerable to unfair business practices.

WHY ARE THEY TARGETED?

• Immigration scrutiny• Less educated• Poor financial

backgrounds• Inability to raise credit

levels• Elderly have significant

amount of money sitting in accounts

HOW ARE THEY TARGETED?

• Mortgage/Loan Fraud • Affinity Fraud• Welfare Fraud• Funeral and Cemetery Scams

MORTGAGE & LOAN FRAUD Subprime loan

Subprime lenders provide high-interest loans to borrowers with bad credit or no credit history---those who do not qualify for the prime market.

Minorities Targeted African Americans Hispanics Latin Americans

South Florida High subprime loans 2004-2007

MORTGAGE & LOAN FRAUD

Derek Harris National African

American Relationships Institute (NAARI) scam

Created All-American Home Assistance Services

AFFINITY FRAUD

http://www.youtube.com/watch?v=4uD5fvcXmso

Investment scams that target certain groups Religious/ethnic communities Elderly

Fraudsters pretend to be in the groups

Hard to detect this kind of fraud----close knit groups

“Ponzi” schemes

WELFARE FRAUD Welfare Facts:

12,800,000 Americans on Welfare

46,700,000 Americans on Food Stamps

5,600,000 Americans on Unemployment

$131.9 billion in annual government spending on Welfare

Perpetrators usually act in one of three ways:

Unreported income

Absent parent

Government Child Support

Geographic ineligibility Falsifying child’s abilities/disabilities Food Stamp Fraud Corporate Welfare

CEMETERY AND FUNERAL SCAMS

Common Funeral Schemes Owed debts Insistence of Caskets Commission charges Charges for services not

requested Extra charges

Geraldine Story Tips for avoiding funeral

and cemetery fraud

CONCLUSION• Economic status, rather than race provides

the basis for most financial crimes; some groups are more likely.

• Funeral Cemetery Fraud---elderly, those who may be sick

• Mortgage and Loan Fraud---African Americans, Hispanics, Latin-Americans

• Affinity Fraud---African Americans, Koreans, Armenians

• Certain financial crimes are more commonly associated with certain social classes.

• Welfare Fraud----poorer people, i.e. those on Welfare in the first place

• Dash and Grab---poorer people

• Skimming; cash siphoning----more stable, wealthier people

•

SOURCES http://www.welfareinfo.org/ http://www.statisticbrain.com/welfare-statistics / 24 Pepp. L. Rev. 1235 (1996-1997)

Welfare Fraud and the Fourth Amendment, Luna, Erik G. [ 56 pages, 1235 to 1290 ]

Welfare Law, Welfare Fraud, and the Moral Regulation of the “Never Deserving” Poor

http://www.sec.gov/investor/pubs/affinity.pdf http://www.bizjournals.com/southflorida/print-edition/2012/01/27/lender

s-targeted-minorities-with.html?page=all

http://www.courthousenews.com/2013/02/20/54999.htm http://money.cnn.com/2002/05/01/pf/banking/subprime / http://money.cnn.com/2007/08/10/news/funeral_home.fortune/ http://www.ncoa.org/enhance-economic-security/economic-security-Initi

ative/savvy-saving-seniors/top-10-scams-targeting.html http://www.abcactionnews.com/dpp/money/consumer/scams-that-comm

only-target-seniors--funeral-and-cemetery-fraud#ixzz2rWrzkAkN

http://www.ftc.gov/sentinel/reports/sentinelannual-reports/sentinel-cy2010.pdf.