Safeguarding Seniors: How to Protect the Elderly from Financial Exploitation

A few years ago, I ran into an old friend. He was single at the time and I asked him how his dating life was going.  He was upbeat, as there were a couple of long-distance relationships that seemed to be blossoming.  As he started going into detail, he mentioned that one of his potential paramours had gotten him involved with a new cryptocurrency trade. A bit concerned, I asked if what he was investing in was legitimate and if the woman he was communicating with was even real.

He assured me that he’d done much due diligence.  He’d asked her what she was doing or eating, and the friend was always speedy in replying. He’d tested the cryptocurrency brokerage multiple times with various amounts to verify it was a legitimate platform and that he was able to deposit and withdraw money without issue. Everything looked on the up and up.

A few months later, I ran into him again.  He told me that the whole thing had been a scam, and he had lost quite a bit of money. The cryptocurrency platform ended up being fake. Because he was able to transfer small amounts back and forth, he eventually decided to put a large sum for investment. That’s when his assets disappeared and his friend stopped communicating with him.

Hearing his story prompted me to do more research, for I found it hard to believe that my intelligent and cautious friend could have been defrauded so easily.  I discovered that this type of scam, known as pig-butchering, was more common than I’d realized.  These scams in many cases originate within boiler rooms where fraudsters armed with detailed scripts play the long game to hook their victim.  My friend was defrauded more than 5 years ago, and since then pig-butchering scams have received national attention, with articles in major newspapers and news broadcasts warning consumers of the danger. 

Pig-butchering and other types of scams, such as romance scams, investment scams, or technical support scams, will often target the elderly or vulnerable adults, who are more susceptible to these types of scams because of age or cognitive decline. The FBI, through its Internet Crime Complaint Center (IC3) database, reported that the total losses for complainants over 60 reached $3.4 billion just within 2023 alone.  That year saw over 101,000 elderly victims file complaints with the center. And certainly, these numbers are sure to be higher, as they include only those complaints that were reported to the database. 

Sadly, an even cursory glance at the IC3 statistics over the last few years shows that the elderly community is being targeted at a higher rate. Between 2018-2023, the number of reported victims over 60 rose from 60,000 to 101,000 and the reported dollar amounts rose from just over $500,000 to $3.4 billion. 

What is Financial Exploitation?

With financial exploitation on the rise, banks and other financial institutions need to be aware of the potential signs and understand their fiduciary duty to protect and report. Crime and fraud will continue to increase, but our institutions and employees have the ability to stop the illegal flow of money to these fraudsters.

Financial exploitation of the elderly is defined in Title 8. Public Welfare and Charitable Institutions. § 342 as, “The improper use of an adult’s funds, property or resources by another individual including, but not limited to, fraud, false pretenses, embezzlement, conspiracy, forgery, falsifying records, coercion, property transfers or denying them access to their wealth.”

The code also further states that financial exploitation includes, but is not limited to, 

b) A person who recklessly uses or exerts control over the personal services or the property of:

(1) an endangered adult; or

(2) a dependent;

for the person’s own profit or advantage or for the profit or advantage of another person, but not for the profit or advantage of a person described in subdivision (1) or (2), commits exploitation of a dependent or an endangered adult, a Class A misdemeanor. However, the offense is a Level 6 felony if the person has a prior unrelated conviction under this section.

(c) A person in a position of trust who recklessly engages in self-dealing with the property of:

(1) an endangered adult; or

(2) a dependent;

commits exploitation of a dependent or an endangered adult, a Class A misdemeanor. However, the offense is a Level 6 felony if the person has a prior unrelated conviction under this section.

From law enforcement’s perspective, however, financial exploitation is given a broader, more easy-to-understand definition. The Elder Justice Initiative by the US Department Department of Justice defines financial exploitation as falling into two types: 

Financial fraud: Defined as financial crimes committed by someone unknown by the victim.

Financial abuse: Defined as financial crimes committed by a perpetrator known by the victim. This might be a friend, family, or trusted loved one.

Banks and financial institutions serve as a frontline defense against elder financial exploitation, but despite their safeguards, financial abuse can seep through due to a number of constraints. By understanding the signs and why they matter, we can collectively take steps to prevent elder financial abuse and ensure older adults live with the security and respect they deserve. 

A Superstar’s Story of Financial Abuse

One example of financial abuse recently in the news is the story of baseball superstar Shohei Ohtani and his interpreter and translator Ippei Mizuhara. Ippei first met Shohei in 2013, many years before Shohei became a two-way MVP in the major leagues. At the time, Ippei was interpreting for the Hokkaido Nippon-Ham Fighters, where Shohei started his career. The two became fast friends and when Ohtani moved to the US to further his career with the Los Angeles Angels, Mizuhara was also hired by the Angels to assist him. Ohtani and Mizuhara were so close that Mizuhara would be seen outside of traditional interpreting situations, such as catching Ohtani’s warm-up pitches.

With this close association, Mizuhara began to abuse Ohtani’s trust. When Ohtani went to open a new bank account in the United States in 2018 after signing with the Angels, Mizuhara was there to translate for his friend. In fact, all of Shohei’s salary was deposited into that account, but Shohei’s financial advisors and bookkeepers did not have access to the account and did not receive any statements. Between 2021 and January 2024, according to court affidavits, Ippei started using the account for his gain. He impersonated Shohei, transferred as much as $16 million to an illegal sports bookie, and even used the account to buy sports memorabilia. Shohei, who is famous for being an ascetic who focuses solely on baseball, was aware of none of this until the FBI began an investigation into the illegal bookie’s operations and a reporter started asking questions.

In fact, Shohei only started to suspect something was going on after Ippei answered the reporter’s questions for him in English.  Ippei’s statement to an ESPN reporter, who asked about Shohei’s potential involvement in the sports gambling scandal, was merely that Shohei was paying off Mizuhara’s debts as a friend. Following the press conference, Shohei confronted Ippei and that was when the fraud began to be discovered.

Ippei plead guilty to fraud charges in June 2024 and admitted to stealing almost $17 million from Shohei.  Ippei Mizuhara faces a maximum sentence of 33 years, with sentencing scheduled for December 20, 2024.

Although Shohei is in his prime and not considered an elderly adult, he would certainly be considered a vulnerable adult due to his lack of command of the English language. I cite this story because the circumstances between Shohei Ohtani and Ippei Mizuhara include many telltale signs of financial abuse that financial professionals can draw upon as a reference. These include:

1. A new “best friend” accompanying the vulnerable adult to the bank and being involved with the transaction
2. The best friend suddenly conducting financial transactions on behalf of the vulnerable person without proper documentation
3. Signs of suspicious signatures, impersonation, or forgery
4. Uncharacteristic attempts to wire large sums of money
5. Unusual activity, including large, frequent, or unexplained withdrawals
6. Withdrawals that the vulnerable adult is unable to explain
7. Bank statements inaccessible by the vulnerable adult

Many of these signs may have been caught by the financial institutions involved. And in actuality, there were times when Ippei failed in his impersonation attempts to transfer money for a “car loan”, and the bank froze the online transactions.  

Despite these obstacles, Ippei was successful in continuing the fraud for many years. The takeaway from all of this is that financial professionals must be on the lookout for patterns in transactions or signs that something could be amiss.  The American Bankers Association has provided a helpful reference for potential signs of elder financial abuse.  Many of the signs on the list were present in Ippei’s ongoing fraud.  

Guidelines to Reporting

If you suspect financial exploitation of an older adult, it’s crucial to report it promptly to ensure the victim’s safety and prevent further harm. You can start by contacting the National Adult Protective Services Association (NAPSA) in your state, which investigates cases of elder abuse, including financial exploitation. 

Many NAPSA agencies have hotlines or online reporting options. Additionally, you can notify local law enforcement if you believe a crime has been committed, such as theft or fraud, especially if the elder is in immediate danger. 

Financial institutions should also be alerted if there are signs of unauthorized transactions or suspicious account activity, as they can freeze accounts and investigate further. For fraud and scams, the Federal Trade Commission (FTC) allows you to file complaints online, and you can also reach out to state securities regulators if the abuse involves financial advisors or other licensed professionals. 

Advocacy organizations like the National Center on Elder Abuse (NCEA) can offer resources and help you navigate the reporting process. Lastly, attorneys specializing in elder law can assist with legal action to recover assets and revoke fraudulent documents. 

By staying vigilant, educating ourselves on the signs of financial abuse, and taking proactive steps, we can all contribute to safeguarding seniors and ensuring they live with dignity, security, and respect.

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