Finances & Advice Be careful – be very careful

Be careful – be very careful


For baby boomers who are planning for retirement, about to retire or already retired, the anxiety about their financial security is real, and it sometimes lures them into risky behavior with their money.

Stories abound of people handing over thousands of dollars to purveyors of phony investment schemes. More tragically, there are the cases in which a family member gains control of an elderly relative’s assets – including the house – then spends all the cash, sells the house and evicts the helpless victim. And thousands of times each day, people get phone calls or letters or emails telling them they have won millions in a lottery, and all they have to do is wire money for fees and taxes to claim their prize, which doesn’t exist.

Judith M. Shaw, administrator of the Maine Office of Securities, whose office handles securities fraud in the state, said that in September, a new federal law takes effect that opens the door for even more deception and fraud.

Called the Jumpstart Our Business Startups Act, or JOBS Act, it will allow business startups to directly solicit investors, a practice that had been prohibited since 1933.

It is designed to make it possible for small businesses to raise money through direct solicitation using virtually any form of advertising. Under the new law, businesses may advertise investment opportunities and issue shares, though all potential investors must be financially “qualified” before being allowed to invest.

Many advocates for the elderly, as well as state securities regulators and law enforcement agencies, have strong misgivings about the JOBS Act. They know that a person intent on committing fraud will not be following the rules of any federal agency or law enforcement authority.

“I’m sure legitimate startups will do it responsibly,” Shaw said, “but scam artists will take advantage of it. It is another opportunity for scam artists to reach out and try to convince people to part with their hard-earned money.”

Shaw describes it this way: People have been saving and investing for retirement for years. The 2008 financial collapse in the world economy hit retirement portfolios hard. Suddenly, you’re on the verge of retirement and you don’t have the kind of money socked away you thought you would have. You see an advertisement on a web page or in the paper; it comes in the mail as a fancy flier; it arrives in your email inbox.

The pitch is familiar: Great company. Bright prospects. Low risk. Good returns. Invest now or lose out.

What could possibly go wrong?

That sort of scam occurred frequently enough even before the JOBS Act. Shaw cited the recent case of an 81-year-old Kennebunk retiree who invested $600,000 in a casino resort and spa development in Hungary. He was told that his return would be $1 million and that he would see that money in six months. The Connecticut man behind the fraud was found guilty of wire fraud and sentenced to 57 months in federal prison.

It has long been recognized that older people are particularly vulnerable to financial fraud. Recent research indicates that as we get older, we become less able to gauge financial risk. In a paper published in BMC Geriatrics, a peer-reviewed journal focusing on the health and health care of older people, researchers said their findings “may suggest that older persons, particularly those with lower cognitive abilities, could benefit from assistance in understanding risk/benefit ratios and considering all possible options (not just the safe choice) when making consequential decisions.”

Maine has the oldest population in the country. The state is rural and social isolation is as prevalent as its dirt roads. Baby boomers are tech savvy and the Internet is rife with fraudulent schemes, offers and enticements to make easy money. What that adds up to, Shaw said, is “a perfect storm for financial fraud.”

The best defense, says Shaw and others working on this front, is a unified network of law enforcement, health care and social service agencies watching out for their clients and communicating with the public at large about how vulnerable people are.

Shaw’s office, for instance, is working on a program to teach health-care professionals in Maine how to spot signs of financial fraud among patients. The framework for the program, Shaw said, comes from the Elder Investment Fraud and Financial Exploitation Prevention Program. Developed by Baylor College of Medicine, the program, according to its website, “educates health-care professionals to recognize when their older patients may be vulnerable to or victims of financial abuse, particularly those patients with mild cognitive impairment, and then to refer these at-risk patients to State Securities Regulators, local adult protective services professionals or for further medical screening.”

Joining Shaw in her efforts are local agencies on aging, law enforcement, the state’s system of legal services for the elderly, social service organizations and financial institutions.

“If we are going to combat this, it has to be at the community level,” Shaw said, adding, “It takes a village to raise a child. It takes a village to protect the elderly, as well.”

While Shaw and her team at the Office of Securities tackle securities fraud, Jaye Martin, executive director of Maine Legal Services for the Elderly, directs a team of lawyers who seek to recover in civil court what victims have lost to local scams, family members or others they mistakenly trusted with their assets.

Shaw and Martin co-chair the Maine Council on Elder Abuse Prevention, which has a website that links people to the myriad resources available in Maine. The council’s website is

“The thing we most frequently see is the taking of someone’s home,” Martin said.

A trusted adult member of a person’s family convinces them to sign over the house, take out a mortgage and give the family member the money or through power of attorney gain access to the victim’s assets.

Martin cites the case of an elderly Brooks man who deeded his lakefront home to his granddaughter, thinking the document granted him the right to live out the rest of his life in the house.

Instead, relatives swooped down and before long the man was served with an eviction notice. It took the courts to restore the home to its rightful owner.

Martin has a portfolio of stories and reports that document her agency’s successes, but what worries Martin and Shaw and other elderly advocates is the small number of cases that are brought to their attention.

Martin’s agency handles maybe 100 to 150 cases a year, she said, but national studies show that the reported incidents are between 13 and 15 percent of the total number of victims.

Martin and Shaw share the belief that a “multidisciplinary approach” is the best way to get at the problem “because there is so much complexity to it,” Martin said.

TRIAD is one attempt to apply that approach at the community level.

There are more than 600 TRIAD organizations in the country, according to the national association’s website. Each local organization includes law enforcement, local or regional elderly services agencies and volunteers from the elder community. Each TRIAD provides outreach, education and local resources to prevent financial abuse of older people.

“There are quite a number of TRIADS in Maine,” Martin said.

The Maine Association of TRIAD has a Facebook page but it does not indicate how many TRIADS there are in the state. The association describes itself as “an advisory board for the individual TRIAD chapters throughout the state.”

Some towns and counties include a TRIAD link on their websites.

A new organization has joined the effort in Maine to prevent financial abuse of older people. DASH is an acronym created by the recently formed Maine Fraud Prevention Alliance. The organization’s website,, lays out the simple steps anyone should take to protect themselves from scammers, thieves and other financial predators.

It began with an idea at Saco & Biddeford Savings Institution.

According to Heather Clark, assistant vice president and marketing officer at Saco & Biddeford Savings, the bank enlisted the help of a public relations firm to come up with a short, concise, easy-to-remember acronym that reminds people to be cautious.

DASH stands for: Delete unsolicited email and texts; Ask for permits from door-to-door sales people; Shred junk mail; Hang up unsolicited calls.

Clark described the website as something like an open-source project that is open to participation from any group, agency or financial institution that wants to put up links to its resources, information or educational materials.

“We want to prevent it (financial abuse) before it happens,” Clark said. “Our piece is just to remind people to think twice before doing something. If they see the magnet on the fridge that says DASH, it clicks with them.”

AARP of Maine recently joined the alliance, Clark said, and the Maine Bankers Association has been approached to join the effort, the idea being to get financial institutions in every part of the state involved.

“Even though our bank pretty much created it we want everybody to have access to it,” Clark said.

Rik O’Neal is a freelance writer and filmmaker who lives in Gorham.


For more information, see:

Maine Council on Elder Abuse Prevention

Maine Fraud Prevention Alliance

Office of Securities

Maine Legal Services for the Elderly

Judith M. Shaw, administrator of the Maine Office of Securities.


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