[Senate Hearing 112-716]
[From the U.S. Government Printing Office]


                                                        S. Hrg. 112-716
 
     AMERICA'S INVISIBLE EPIDEMIC: PREVENTING ELDER FINANCIAL ABUSE 

=======================================================================

                                HEARING

                               BEFORE THE

                       SPECIAL COMMITTEE ON AGING

                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS


                             SECOND SESSION

                               __________

                             WASHINGTON, DC

                               __________

                           NOVEMBER 15, 2012

                               __________

                           Serial No. 112-24

         Printed for the use of the Special Committee on Aging


         Available via the World Wide Web: http://www.fdsys.gov

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                       SPECIAL COMMITTEE ON AGING

                     HERB KOHL, Wisconsin, Chairman

RON WYDEN, Oregon                    BOB CORKER, Tennessee
BILL NELSON, Florida                 SUSAN COLLINS, Maine
BOB CASEY, Pennsylvania              ORRIN HATCH, Utah
CLAIRE McCASKILL, Missouri           MARK KIRK III, Illinois
SHELDON WHITEHOUSE, Rhode Island     DEAN HELLER, Nevada
MARK UDALL, Colorado                 JERRY MORAN, Kansas
MICHAEL BENNET, Colorado             RONALD H. JOHNSON, Wisconsin
KIRSTEN GILLIBRAND, New York         RICHARD SHELBY, Alabama
JOE MANCHIN III, West Virginia       LINDSEY GRAHAM, South Carolina
RICHARD BLUMENTHAL, Connecticut      SAXBY CHAMBLISS, Georgia
                              ----------                              
                 Chad Metzler, Majority Staff Director
             Michael Bassett, Ranking Member Staff Director



                               CONTENTS

                              ----------                              

                                                                   Page

Opening Statement of Senator Herb Kohl...........................     1
Statement of Senator Bob Corker..................................     2
Statement of Senator Bill Nelson.................................     2

                           PANEL OF WITNESSES

Frank Abagnale, Author and Consultant, Abagnale & Associates, 
  Washington, DC.................................................     3
Kay Brown, Director, Education, Workforce and Income Security, 
  U.S. Government Accountability Office, Washington, DC..........     5
Hubert ``Skip'' Humphrey III, Assistant Director, Office of Older 
  Americans, Consumer Financial Protection Bureau, Washington, DC     7
Paul Smocer, President, Bits, Financial Services Roundtable, 
  Washington, DC.................................................     8
Paul Greenwood, Deputy District Attorney, Head of Elder Abuse 
  Unit, Family Protection Service, San Diego, CA.................    10

                                APPENDIX
                   Witness Statements for the Record

Frank Abagnale, Author and Consultant, Abagnale & Associates, 
  Washington, DC.................................................    28
Kay Brown, Director, Education, Workforce and Income Security, 
  Government Accountability Office, Washington, DC...............    34
Hubert ``Skip'' Humphrey III, Assistant Director, Office of Older 
  Americans, Consumer Financial Protection Bureau, Washington, DC    42
Paul Smocer, President, BITS, Financial Services Roundtable, 
  Washington, DC.................................................    46
Paul Greenwood, Deputy District Attorney, Head of Elder Abuse 
  Unit, Family Protection Division, San Diego, CA................    57

      Additional Information by Witnesses Submitted for the Record

Questions submitted by Senator Wyden for Mr. Abagnale............    64
Questions submitted by Senator Wyden for Mr. Humphrey............    65
GAO Report: Elder Justice: National Strategy Needed to 
  Effectively Combat Elder Financial Exploitation................    66

             Additional Statements Submitted for the Record

Senator Bernie Sanders (I-VT)....................................   146
Financial Industry Regulatory Authority, Washington, DC..........   148
Elaine Roberts Musser, Attorney at Law, Davis, CA................   156
U.S. Postal Inspection Service, Washington, DC...................   165
University of Cincinnati, Center for Aging with Dignity, 
  Cincinnati, OH.................................................   168


     AMERICA'S INVISIBLE EPIDEMIC: PREVENTING ELDER FINANCIAL ABUSE

                              ----------                              


                      THURSDAY, NOVEMBER 15, 2012

                                       U.S. Senate,
                                Special Committee on Aging,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 2:00 p.m. in Room 
SD-562, Dirksen Senate Office Building, Hon. Herb Kohl, 
Chairman of the Committee, presiding.
    Present: Senators Kohl [presiding], Wyden, Nelson, Casey, 
Whitehouse, Blumenthal, and Corker.

        OPENING STATEMENT OF SENATOR HERB KOHL, CHAIRMAN

    The Chairman. Good afternoon. We appreciate very much your 
presence at this hearing.
    Today we will be talking about ways to prevent a growing 
national crisis, elder financial abuse. From the opportunistic 
thief working as a home care aide, to the shady telemarketer 
who befriends a lonely senior on the phone to take advantage of 
him through a sweepstakes scam, the stories this Committee has 
heard are alarming.
    Seniors are being victimized every day, and the problem is 
getting worse. According to the Investor Protection Trust, one 
out of every five older Americans has already been duped by a 
financial scam. And while the costs associated with elder 
financial abuse are estimated to be $2.9 billion every year, 
financial abuse often does go unrecognized because victims are 
too afraid or embarrassed to report the crime to authorities.
    The reality is, many of us may know an older adult who is 
at risk, or who has been a victim of elder financial abuse. It 
might be a family member, a neighbor, or a friend. In fact, 
someday it might indeed be each and every one of us. But there 
is hope. Today we will highlight new elder financial abuse 
prevention programs being implemented across the Federal, 
state, and private sectors. In addition, we will address ways 
that older Americans can take steps to protect themselves, as 
well as their assets.
    We will start today's hearing with Mr. Frank Abagnale, who 
earned a Hollywood-worthy reputation for conning unsuspecting 
victims. He has come here to share tips for preventing identity 
theft and protecting against financial fraud.
    We will then review the findings of a Government 
Accountability Office report which describes what the Federal 
Government can do to help states combat financial exploitation.
    We will also hear testimony from the Consumer Financial 
Protection Bureau, a member of the new Elder Justice 
Coordinating Council.
    Finally, our panelists from the Financial Services 
Roundtable and the San Diego County District Attorney's Office 
will share their knowledge of prevention activities taking 
place in private banking institutions and at the state level.
    Over the years, I've seen our nation take great strides to 
combat elder financial abuse, from the passage of the Elder 
Justice Act to the creation of a background check system for 
nursing home employees. It is time to build on our efforts to 
remedy this invisible epidemic and break the cycle of stigma 
attached to this terrible crime.
    We thank you all for being here, and I'd like to hear now 
from Senator Corker.

                STATEMENT OF SENATOR BOB CORKER

    Senator Corker. Thank you, Mr. Chairman, for bringing this 
hearing today and for all of these witnesses for showing up. I 
do look forward to your testimony, and I appreciate you 
highlighting this issue that affects so many people.
    And I've been told not to make any big deal about the fact 
that this is your last hearing, so I won't do that, but thank 
you so much----
    [Laughter.]
    Thank you so much for your tremendous leadership and for 
being such a pleasure for me and our staff to work with.
    The Chairman. Thank you, Senator Corker.
    Senator Nelson.

                STATEMENT OF SENATOR BILL NELSON

    Senator Nelson. Mr. Chairman, I will make a big deal.
    We obviously are going to miss you, and you have brought 
great distinguished service to the United States Senate. No one 
ever had to question your integrity or your word, and you have 
offered that kind of public service not only in leadership 
roles in the Appropriations Committee, but here as well.
    Even going back to the Good Book in ancient scriptures, it 
teaches us that two parts of society that we particularly want 
to take care of are the young and the old. And so as our 
government has developed over the years, that's one of the 
great responsibilities of our American Government, is to make 
sure that the young and the old are protected, and what better 
subject than the subject of this hearing to underscore that.
    And then, if that were not enough, under the Chairman's 
leadership, he has already passed the Elder Justice Act, which 
was put in as a part of the Affordable Care Act, coordinating 
the efforts of the Federal Government with the states' senior 
centers, law enforcement organizations, community groups and 
social services to prevent the physical, emotional, and 
financial abuse of senators--of seniors.
    I keep replacing ``senator'' with ``senior'' so that when I 
am introduced as the senior senator of Florida, they often get 
it mixed up----
    [Laughter.]
    And they say ``we're welcoming the senior citizen of 
Florida.''
    [Laughter.]
    And the End Abuse in Later Life Act, which enhances direct 
services for victims of domestic violence and sexual assault, 
which are 50 years of age or older, and that was included in 
the Senate-passed reauthorization of the Violence Against Women 
Act, another one of your initiatives, Mr. Chairman.
    And the Elder Abuse Victims Act, which has been introduced 
to ensure Federal, state and local law enforcement agencies are 
working together with adult protective services to combat elder 
abuse.
    So, Mr. Chairman, your legacy is indelibly etched into not 
only this committee but the law of this country, and for that 
we are exceptionally grateful.
    The Chairman. We thank you so much.
    Senator Nelson. And if, in a few minutes, I may be excused, 
we have the acting director of the CIA coming on a number of 
topics that happen to be of currency, and with your permission, 
at that appropriate time, I will slip out.
    The Chairman. Thank you so much, Senator Nelson, for being 
here.
    And now we'll introduce our witnesses. Our first witness 
today will be Frank Abagnale. Mr. Abagnale was made famous by 
the real-life depiction of his years as a con artist in the 
best-selling book ``Catch Me If You Can,'' which was also made 
into a film directed by Steven Spielberg.
    Next we'll be hearing from Kay Brown, the Director of the 
Education Workforce and Income Security Team at the U.S. 
Government Accountability Office, where she focuses on 
improving government performance in delivering benefits and 
services to lower-income and vulnerable populations.
    Third, we'll be hearing from Hubert ``Skip'' Humphrey, III, 
the Assistant Director of the Office of Older Americans at the 
Consumer Financial Protection Bureau. Mr. Humphrey has spent 
much of his professional life working to protect consumers.
    And then we'll hear from Paul Smocer, who is the President 
of BITS, the Technology Policy Division of the Financial 
Services Roundtable. Previously, Mr. Smocer led BITS work in 
promoting safety and soundness of financial institutions 
through best practices and successful strategies.
    Finally, the committee will hear from Paul Greenwood, 
Deputy District Attorney for San Diego County. Mr. Greenwood is 
head of the Elder Abuse Prosecution Unit and has been involved 
in the prosecution of over 200 felony elder abuse cases.
    We thank you all for being here and, Frank, we'll start 
with you.

STATEMENT OF FRANK ABAGNALE, AUTHOR AND CONSULTANT, ABAGNALE & 
                   ASSOCIATES, WASHINGTON, DC

    Mr. Abagnale. Chairman Kohl and Ranking Member Corker, 
members of the Committee, I am honored to be invited to testify 
before you today on the seriousness of identity theft and 
financial fraud against the elderly, and the need for 
education.
    I am Frank Abagnale, subject of the book, movie and 
Broadway musical ``Catch Me If You Can.'' I have a unique 
perspective, having committed fraud as a teenager some 40 years 
ago and having spent the last 36 years of my life teaching at 
the FBI Academy and field offices of the Federal Bureau of 
Investigation. In my 36-year career, I have conducted over 
3,000 lectures and written four books on these subjects. For 
the past 36 years, I have worked to try to prevent fraud, 
forgery, embezzlement, identity theft and other white collar 
crimes.
    One serious issue we face is financial fraud against the 
elderly. This can be perpetrated by family members, financial 
advisers, home healthcare providers, friends, scam artists, and 
others. As I'm sure you are all aware, in 2010 the Consumer 
Financial Protection Board estimated $2.9 billion was stolen 
from financially exploited elders, and the instances of 
financial theft from seniors grew 12 percent from 2008 to 2010.
    This is probably a low estimate because many times the 
elderly are too embarrassed to admit that they have been 
defrauded, and therefore it goes unreported. Their families may 
not even be told.
    Last year, white collar crime in America reached $900 
billion. Medicare fraud alone was estimated conservatively at 
$179 billion. The IRS paid out over $5 billion in fraudulent 
tax refunds filed by individuals using stolen Social Security 
numbers.
    I make my home in Charleston, South Carolina. Last month, 
3.5 million Social Security numbers and over 300,000 credit and 
debit card numbers were stolen from the South Carolina 
Department of Tax Revenue by criminals who hacked into the 
state's computer system. It is believed that they not only 
stole Social Security numbers and credit card information, but 
also the entire return of each person who filed a South 
Carolina tax return. This means the criminals have the Social 
Security number of the dependents, the home address, bank 
account numbers, and copies of the W-2.
    What is truly amazing to an individual like me is that what 
I did 40 years ago as a teenager is 4,000 times easier to do 
today due to technology. Unfortunately, technology breeds 
crime, always has and always will. There will always be 
individuals who will use technology in a negative, self-serving 
way.
    I have always believed that the government should take the 
lead in education to combat this horrendous crime. However, 
sometimes it seems the government makes it easier for 
individuals to commit these crimes. For example, the Centers 
for Medicare and Medicaid Services uses Social Security numbers 
as part of the Medicare number. This means that anyone who sees 
the Medicare number can determine the Social Security number.
    In a hospital or medical setting, a worker would have 
complete access to a senior's Social Security number, home 
address, date of birth, possibly credit card numbers, bank 
account, and other information. This threat of identity theft 
of seniors will not be alleviated until the Social Security 
number is removed from the Medicare card.
    The elderly are hungry for information but do not know 
about legitimate resources where they can turn for help. 
Numerous companies on television and radio, as well as talk 
show hosts, promote and market solutions which may or may not 
actually work. This is an example of the victim going for help 
but being victimized again by those companies that are claiming 
to help them.
    Throughout my career, I have always believed that education 
is the best prevention. If you educate and explain to people 
their risks, in most cases they are smart enough to take that 
information and reduce their risks. I believe education is the 
only approach to help eliminate elder fraud. Education is not 
only important for our seniors, but it also helps bring 
awareness to all citizens so they can recognize the signs of 
fraud and know how to protect themselves.
    I believe that one of the most powerful tools at the 
government's disposal is creative public service announcements 
that point out the most common scams and explain how to avoid 
becoming a victim. I recommend the government sponsor public 
service announcements, mailing stuffers and educational 
materials so that individuals can learn to protect themselves 
and their loved ones.
    Protecting one's identity is an individual's 
responsibility. If a person ages to the point that they cannot 
take care of their personal issues, then their family and 
friends should help take responsibility. Everyone has to be 
educated. Government regulation is not the answer.
    I recommend the following to seniors to protect their 
identity: review your credit report semi-annually; reconcile 
your bank accounts in a timely manner; be suspicious of calls, 
e-mails or letters asking for personal information; don't give 
out your Social Security number--just because a form contains a 
space for your Social Security number doesn't mean you have to 
provide it; invest in a micro-cut shredder.
    Finally, I believe that punishment for fraud and identity 
theft and recovery of stolen funds are so rare, prevention is 
the only viable course of action. Thank you.
    The Chairman. Thank you, Mr. Abagnale.
    Mr. Abagnale. Thank you, sir.
    [The prepared statement of Frank Abagnale appears in the 
Appendix on page 28.]
    The Chairman. Ms. Brown.

  STATEMENT OF KAY BROWN, DIRECTOR, EDUCATION, WORKFORCE AND 
    INCOME SECURITY, U.S. GOVERNMENT ACCOUNTABILITY OFFICE, 
                         WASHINGTON, DC

    Ms. Brown. Chairman Kohl, Ranking Member Corker, and 
Members of the Committee, thank you for inviting me here today 
to talk about our work on elder financial exploitation. My 
remarks are based on a year-long GAO study that was released 
today.
    As we all know, financial exploitation can undermine the 
dignity, health and independence of older adults. Of course, 
states are primarily responsible for protecting their older 
residents, and in our work we found states and local 
jurisdictions that were actively striving to do so. But the 
problem is large and likely growing, and states need help. Both 
the Older Americans Act and the Elder Justice Act have 
established a rule for the Federal Government in combating this 
problem, and for this report we looked at the efforts of seven 
Federal agencies in four states.
    Today I will cover three key areas where we identified a 
need for additional Federal attention: first, improving 
safeguards; second, promoting collaboration across systems; and 
third, increasing public awareness.
    First on safeguards. Additional safeguards are needed to 
protect older adults from exploitation by those they trust, 
such as in-home caregivers and financial advisors. For example, 
financial advisors can recommend unsuitable or fraudulent 
investments, or they can use questionable tactics to market 
financial products to older adults.
    The Securities and Exchange Commission has published 
educational materials on this, and the Consumer Financial 
Protection Bureau is studying ways to improve financial 
literacy in this population. However, much more remains to be 
done.
    Also, we have previously identified the need to improve the 
process for background checks and oversight of court-appointed 
guardians.
    Next is collaboration across systems. Elder financial 
exploitation is a multi-faceted problem. It cuts across the 
social services, criminal justice, and consumer protection 
systems. Collaboration between social services and criminal 
justice agencies can improve outcomes, but it can also be very 
difficult to achieve and sustain because the two systems have 
very different cultures and missions.
    The Administration on Aging and the Department of Justice 
offer grants that require or encourage collaboration, but more 
information is needed on how to build these multidisciplinary 
teams.
    Interstate and international mass-marketing schemes also 
pose a challenge. They often target older adults and are 
particularly difficult for state and local law enforcement 
authorities to investigate and prosecute. Local officials would 
like more complete information on the best contacts within the 
Department of Justice to ask for assistance or to refer cases.
    Banks can be important partners with local social services 
and law enforcement agencies. They are well positioned to 
recognize, report and provide evidence on elder financial 
exploitation. However, local officials told us that banks 
generally under-report potential cases, in part because the 
staff may not be aware of telltale signs, or some may 
misunderstand or be concerned about Federal privacy laws.
    Some states require training for bank employees on how to 
recognize these crimes, and the Administration on Aging is 
considering collaborating with a large national bank to develop 
a training curriculum.
    Lastly, on public awareness, the best way to fight this 
problem is through prevention. Older adults and the public in 
general need more information about what constitutes financial 
exploitation and how to avoid it. However, local officials told 
us it's difficult for them to conduct public awareness 
campaigns given their scarce resources.
    Each of the Federal agencies we reviewed independently 
produces educational materials consistent with its own mission. 
However, these efforts could be more effective if they were 
part of a broader coordinated approach. The Federal Government 
is well positioned to develop such a coordinated, multi-faceted 
campaign.
    In conclusion, elder financial exploitation is a complex, 
nationwide problem. Combating it effectively requires a 
concerted, ongoing effort on the part of states and localities, 
as well as the support and leadership at the Federal level. The 
Federal agencies we reviewed are each taking steps to address 
this problem, but a more cohesive and clearly articulated 
national strategy is needed, and the recently formed Elder 
Justice Coordinating Council can be the vehicle for defining 
and implementing this strategy.
    This concludes my prepared statement. I'm happy to answer 
any questions you may have.
    [The prepared statement of Kay Brown appears in the 
Appendix on page 34.]
    The Chairman. Thank you, Ms. Brown.
    Mr. Humphrey.

STATEMENT OF HUBERT ``SKIP'' HUMPHREY III, ASSISTANT DIRECTOR, 
   OFFICE FOR OLDER AMERICANS, CONSUMER FINANCIAL PROTECTION 
                     BUREAU, WASHINGTON, DC

    Mr. Humphrey. Thank you very much, Chairman Kohl and 
Ranking Member Corker, to the other members of the Committee. 
Thank you for the opportunity to testify today on the Office 
for Older Americans at the Consumer Financial Protection Bureau 
and its work to address the devastating problem of elder 
financial exploitation.
    Mr. Chairman, I also want to thank you for your 
longstanding dedication and the important role that you've 
played in enhancing the well-being of our older citizens.
    For the past year, I have been privileged to lead the 
Office for Older Americans. Our statutory mandate covers two 
broad areas: first, protecting consumers age 62 and over in the 
financial marketplace; and secondly, in enhancing their later-
life economic security.
    In our first year, we've made preventing and detecting and 
redressing elder financial exploitation job number 1. In doing 
so, we have recognized that collaboration is critical on the 
local, state and national levels, and between public and 
private sectors.
    To jumpstart and foster these collaborative efforts, we 
have traveled throughout the country to meet state, local and 
tribal officials, including Attorneys General, financial 
regulators, Adult Protective Services administrators, 
commissioners on aging, chief justices, court administrators, 
and tribal elders. We have also engaged with non-profits, 
community organizations and industry groups to explore ways to 
help and to partner with them. For example, we participate in a 
working group with the Financial Services Roundtable to enhance 
the capacity of financial institutions to report suspected 
elder financial abuse.
    In addition, we have been actively engaged with our Federal 
partners. Last month, as was mentioned, was the inaugural 
meeting of the Elder Justice Coordinating Council, an 11-agency 
body convened to shine a light on the disastrous impact of 
financial exploitation and to catalyze the development of a 
prevention strategy.
    At the meeting, we heard some important themes from 
national experts. We heard that older Americans are victimized 
by a broad range of perpetrators; collaboration is critical; 
diminished capacity is truly the 800-pound gorilla in the room. 
We need more and better quality data, and we need a broad-scale 
public education campaign to raise the awareness of elder 
financial abuse and what to do about it.
    The CFPB already has initiatives underway that address 
issues flagged at the Council meeting. We are developing ``how-
to'' guides for agents under powers of attorney, guardians, 
trustees, Social Security representative payees, and VA 
fiduciaries. We are producing a guide to help senior housing, 
assisted living and skilled nursing facilities to identify and 
intervene in exploitation cases. Our Money Smart for Older 
Adults education program, in collaboration with the FDIC, will 
focus on preventing, recognizing and reporting elder financial 
exploitation.
    We are working with several states to create and sustain 
coalitions for community education, public awareness, enhanced 
response, and increased prosecution; and we're developing 
strategies for communicating to financial institutions that the 
Gramm-Leach-Bliley Act generally does not prohibit them from 
reporting suspected abuse to law enforcement and APS agencies.
    Congressional leadership and support is critical to 
implementing a multi-faceted solution to the serious problem of 
elder financial exploitation. We look forward to continued 
information sharing with members of Congress on this important 
topic and the CFPB's contributions.
    Thank you, Mr. Chairman and members of this Committee, for 
the opportunity to visit with you on this.
    [The prepared statement of Hubert ``Skip'' Humphrey III 
appears in the Appendix on page 42.]
    The Chairman. Thank you very much, Mr. Humphrey.
    Mr. Smocer.

 STATEMENT OF PAUL SMOCER, PRESIDENT, BITS, FINANCIAL SERVICES 
                   ROUNDTABLE, WASHINGTON, DC

    Mr. Smocer. Thank you, Chairman Kohl, Ranking Member 
Corker, and members of the Committee, for providing this 
opportunity for us to speak on the subject of financial 
exploitation of older Americans.
    My name is Paul Smocer, and I am the President of BITS, the 
Technology Policy Division of the Financial Services 
Roundtable.
    By 2030, the number of Americans aged 65 and older is 
projected to double to 71 million, roughly 20 percent of the 
U.S. population. With this increase in the number of older 
Americans, the threat of financial exploitation is only 
increasing.
    The Roundtable and its member companies are committed to 
encouraging their employees comply with high standards of 
conduct when providing financial advice to all customers, 
including older Americans and their families. Helping ensure a 
secure financial system and retirement for millions of 
Americans is central to the mission of the financial services 
industry.
    Since many older customers still prefer to conduct 
transactions in person, financial services employees can often 
detect changes in an older customer's behavior and have the 
opportunity to react appropriately in the event of potential 
exploitation. In identifying and reacting to cases of suspected 
abuse, it is essential for the institutions to work with Adult 
Protective Services and local law enforcement.
    To accomplish this, many institutions participate in both 
local and regional task forces composed of all of these groups. 
During these meetings, institutions will share trends, suspect 
information, and best practices. Through this active engagement 
and partnership, cases are able to be resolved more quickly.
    Institutions also file Suspicious Activity Reports to the 
Financial Crimes Enforcement Network.
    For decades, financial institutions have been at the 
forefront of fraud detection, utilizing sophisticated 
technology, modeling, training and education. These resources 
and techniques are employed in protecting older Americans. 
Using a variety of safeguards, financial institutions make 
every attempt to ensure the reliability and security of 
financial transactions, as well as to protect financial 
privacy.
    Education of all stakeholders is critical for preventing 
financial abuse. Many financial institutions have extensive 
programs to educate both employees and customers on detecting 
abuse against older Americans, and steps to secure accounts 
from the lure of fraudsters.
    Working closely with community organizations, financial 
institutions host panel discussions and community events to 
educate seniors and their caregivers about the risk of elder 
financial abuse. These efforts provide older Americans and 
their advocates educational resources to not only recognize 
financial elder abuse, but also to take proactive steps to 
protect oneself and one's assets.
    Working with our member institutions, the Roundtable's BITS 
organization released a white paper to help financial 
institutions and their customers identify and combat elder 
abuse. In addition, the Roundtable participated in its Seventh 
Annual World Elder Abuse Awareness Day this past June, 
providing speakers on the topic of elder financial abuse.
    Currently, the Roundtable and its members have committed 
resources to a working group focused on developing a structure 
for training financial institution staff on elder fraud trends 
and internal procedures for reacting to suspected elder 
financial abuse. The group will also work with financial 
institutions and, as Skip mentioned, in collaboration with 
groups like CFPB to develop broader, sector-wide, consumer-
facing awareness and education programs.
    In discussing this issue more generally, the group has 
identified a number of areas where impediments exist to 
improved prevention which require the assistance of Federal 
agencies to help resolve. We recently presented these 
impediments and recommendations for improvement to the Elder 
Justice Coordinating Council during its inaugural meeting.
    My written comments provide additional detail on these 
recommendations, but they cover a variety of areas including 
clarifying existing law related to fraud monitoring 
capabilities and responding to transaction requests involving 
suspected fraud; uniform reporting processes and protection for 
reporting parties; clarification and standardization of 
reporting requirements across various jurisdictions; and 
licensing of financial professionals serving the elder 
community.
    In closing, please accept my thanks for the opportunity to 
offer our thoughts to you today. We recognize the importance of 
this issue and look forward to continuing to work together with 
the Committee and the member agencies of the Elder Justice 
Coordinating Council on this important issue. Thank you.
    [The prepared statement of Paul Smocer appears in the 
Appendix on page 46.]
    The Chairman. Thank you, Mr. Smocer.
    Mr. Greenwood.

STATEMENT OF PAUL GREENWOOD, DEPUTY DISTRICT ATTORNEY, HEAD OF 
   ELDER ABUSE UNIT, FAMILY PROTECTION SERVICE, SAN DIEGO, CA

    Mr. Greenwood. Thank you, Chairman Kohl. Good afternoon to 
you. If I may be permitted to deviate from my written remarks, 
I feel like I'm sort of the closing argument prosecuting in 
front of the jury this afternoon. What has come across is very 
clear. The speakers have been talking about education and 
collaboration and making safeguards, and one thing that Skip 
Humphrey mentioned was increased prosecution.
    I am privileged to be able to be head of an elder abuse 
prosecution unit in our office in San Diego for the last 17 
years. It's been the most rewarding, challenging, and equally 
frustrating part of my 34-year career as a lawyer.
    But I'm also fortunate that, working in California, we have 
seen evidence of this collaboration in increased awareness over 
the last several years. For example--and I owe a great deal of 
thanks to Adult Protective Services, who really have taken the 
lead in California in so many initiatives. We developed what 
are called FAST teams, Financial Abuse Support Teams, that 
bring in several times a year members from the community--
professionals, bankers, lawyers, law enforcement, Adult 
Protective Services--to talk over these issues and to study 
trends and to learn from one another in how we can improve our 
collective response to these cases of financial elder abuse.
    We've seen popping up over the last five years forensic 
centers for elder abuse in California, and I have to pay 
tribute particularly to the one in Orange County led by the 
premier expert in this country, Dr. Laura Mosqueda, and it is a 
tremendous resource to be able to call up that center and ask 
for advice from a medical expert regarding a victim with 
dementia or Alzheimer's.
    And then thirdly, in 2007, California passed a law that 
required all bank tellers and credit union tellers to be 
mandated reporters of suspected financial exploitation. Because 
of that, we've seen a huge increase in the number of reports 
being cross-reported to law enforcement and Adult Protective 
Services.
    And then finally, Operation Guardian was a program 
initiated by the California Attorney General's Office which 
makes surprise visits, sometimes at dawn, to various nursing 
homes around California, and because of those surprise visits, 
many cases of financial exploitation have been discovered in 
these facilities where residents have been taken advantage of.
    But I also want to comment upon increased prosecution, 
because whilst these other initiatives are excellent, I believe 
the best form of prevention is to tell these crooks out there 
that if you do mess with elders and try to rip off an elder, a 
prosecutor somewhere is going to come after you and prosecute 
you to the fullest.
    It starts with the elected district attorney, and I'm so 
glad that I have a boss, Bonnie Dumanis, who has not only 
allowed me to come today, but it shows the importance that we 
place in our office on this crime of financial exploitation. 
But gradually we're seeing across the country more and more 
prosecutors understanding that not only are these crimes 
provable, but the juries get it, and there are many 
misconceptions out there about working with elderly victims. 
The biggest one I always hear is, well, they have failing 
memories. But that's not the case so often. So often now, 
victims are articulate, they are good historians.
    But in those cases where we have victims on the stand who 
demonstrate a lack of memory, that actually enhances the case 
for the jury because the jury gets to see exactly why the 
defendant targeted this elder for their diminished capacity or 
their forgetfulness.
    So what we are looking for is, across the whole of the 
states, more and more prosecutors to become emboldened to take 
on these cases. We want police departments throughout the 
country to develop specialized units. San Diego, fortunately, 
developed several years ago a police department where we have 
six detectives working nothing but elder abuse cases. Can you 
imagine the quality of these cases that come to my desk after 
several years? The detectives absolutely believe in the work 
they do. They bring me good cases, and we present these cases 
to judges and juries all the time, and in most cases we get 
convictions.
    So the message I have is let's collaborate. We need to talk 
more as prosecutors to Adult Protective Services. We need to 
give them more resources. We need to have police officers talk 
with Adult Protective Services and with prosecutors, get more 
education out there for elders, get more training for bank 
tellers and credit unions. But together, I think we can make a 
difference, particularly in the courtroom, and get more and 
more convictions, and get these predators behind bars. Thank 
you.
    [The prepared statement of Paul Greenwood appears in the 
Appendix on page 57.]
    The Chairman. Thank you.
    For each of you, we believe and heard that only a fraction 
of cases of elder financial fraud actually get reported. What 
can government do to encourage people to report cases of elder 
financial fraud?
    Mr. Abagnale.
    Mr. Abagnale. Well, sir, I have to first believe that I 
think that someone is going to take action, as you just heard 
the district attorney say that about prosecution. You know, 
crime has become, especially in the realm of fraud, 
overwhelming. Federal law enforcement agents are usually 
restricted from investigating crimes under $100,000 in face 
value. Most U.S. Attorneys won't prosecute cases under a 
quarter of a million dollars in face value. Consequently, 
criminals know that if they stay under these thresholds, they 
are most likely going to get away with it.
    And so it's very frustrating not only for the law 
enforcement side of it, but for individuals when they know who 
did it, they have all the evidence that they did it, but can't 
get anyone to act on it or do anything to bring these people to 
justice.
    So I think we have to do a better job of educating people 
how to protect themselves so that they don't become victims. 
Once you're a victim, you usually are never going to get your 
money back. So it would be much wiser not to become a victim to 
begin with. So this is why I'm a big believer in education.
    I do believe the government needs to fix some of the things 
like the Medicare card. As you know, there's a bill, S. 1551, 
which would turn the Medicare card into a smart card, which the 
military currently uses. We have 20 million of those cards 
currently in use. Not one has been counterfeited. So I would 
like to see the government at least do a pilot program to bring 
the Social Security number off the Medicare card, which will 
eliminate it finally from all of the identification documents 
the government has, and come to a smart card that will help 
protect as well.
    So it's a little bit of that, more enforcement and, of 
course, a great deal of education.
    The Chairman. You say that less than $250,000 will not be 
prosecuted?
    Mr. Abagnale. Most U.S. Attorneys, because of the volume of 
fraud and crime, they take the highest dollar priority crimes, 
the person who has stolen $7 million, $8 million, $20 million, 
and go after those individuals and prosecute those cases. 
They're under-staffed, under-manpowered. They don't have the 
ability to prosecute a lot of those cases. Certainly, local law 
enforcement and district attorney's offices in counties and 
cities probably do a much better job and have set aside teams 
of people and attorneys to work on those cases.
    But again, it's very frustrating when you're a law 
enforcement person or you are the victim and you know what 
happened, you know who did it, you have all the evidence that 
there is, but you can't get anyone to act on that evidence.
    The Chairman. Thank you.
    Ms. Brown.
    Ms. Brown. I think I'd like to pick up on the public 
awareness theme. I think it's important both to help victims 
understand and try to avoid what may be happening to them, but 
also to help people around them better be able to identify what 
may be happening and feel the confidence to report it. So it's 
both seeing what's happening and then being able and willing to 
report it and knowing where to go.
    The Chairman. All right.
    Mr. Humphrey.
    Mr. Humphrey. Thank you, Mr. Chairman. You know, time and 
again I've had the opportunity to visit with senior groups, and 
I usually ask the question: How many of you have had something 
like elder financial exploitation, a scam, happen to you? All 
the hands go up, or they know somebody that has had that 
happen.
    And I say how many of you know of someone that's in your 
family? And some hands go up.
    Part of the challenge here is to get people to speak up and 
speak out and to encourage them to report it. What we have 
heard from the District Attorney is terribly important, that we 
encourage law enforcement to really begin working in this area.
    The educational part of this and the prevention part are 
terribly important. That's why we've partnered with the FDIC, 
with their Money Smart program. It's a well-known program that 
reaches out to a very broad range of the population and now 
will also focus on older Americans.
    The Chairman. Very good.
    Mr. Smocer.
    Mr. Smocer. By the time you're the fourth witness, you kind 
of have much of the same thing to say. But I think education is 
probably key. Obviously, we're trying to do improved education 
within the financial services community itself. So the tellers 
and kind of the folks at the front line that elders come in and 
speak to are more aware of not only the kinds of scams but how 
to react when they suspect that there is some scam or fraud 
situation going on.
    As Skip mentioned earlier, we've been working with CFPB and 
more broadly with the Elder Justice Coordinating Council around 
the issue of clarifying current law with regard to privacy, 
because that is a bit of a conundrum in some cases where bank 
employees are afraid they're going to violate the customer's 
privacy rights by somehow reporting a situation to someone 
else. So I think it is important that we clarify that.
    I think the consumer education is key, but I think Kay made 
a key point. As we think about this, I think one of the 
concerns we have is that in many cases the elder him or herself 
may not be at a level of capacity that they can actually 
understand the education. So education to caregivers, education 
to adult children of elderly parents I think is also critical.
    And then I think in terms of law enforcement, improved 
reporting around these cases and consolidation of some of the 
many databases that tend to exist today, this was an item that 
we brought up in front of EJCC, that a lot of the agencies 
individually are doing a relatively good job at capturing 
information, but having a consolidated kind of reporting 
mechanism so that, for example, as Frank mentioned, a 
prosecutor can see that he or she can actually make a case 
because when he looks at the fact that this fraudster is 
committing crimes against multiple individuals as opposed to 
looking at each case one off, I think would help build the 
interest of prosecutors and law enforcement.
    So I'll stop there and let Paul speak.
    The Chairman. Mr. Greenwood.
    Mr. Greenwood. Thank you. One of the most successful 
initiatives we were part of with Adult Protective Services was 
called Silence Isn't Golden. So we launched this campaign with 
posters and public service announcements, telling the public 
that the best thing we can do is not stay silent about this 
hidden crime. If you suspect that somebody in our family or in 
your street, in your neighborhood, in your church is a victim, 
you need to call this number, and we encourage people to do it 
because it's anonymous. They don't have to say who they are.
    Secondly, we had a very successful campaign called Protect 
Yourself and Your Wallet. We went around to various libraries, 
and we got a female 70-year-old black belt to do a 20-minute 
course on protecting the seniors when they're out in the 
streets and the shopping malls, and then I came along and did a 
15-minute Top Ten Tips on Financial Security, and that really 
seemed to help a lot.
    But thirdly, one thing I always try to convince seniors of 
is, look, we understand why you don't report, or your families 
don't report, because you're embarrassed. But there's also a 
fear involved, that seniors fear that if they report they're a 
victim, that somehow somebody is going to come and take control 
of their life and their finances. So we try to allay that fear 
and convince them, no, we're not concerned with your 
independence; we only want to go after the independence of the 
crook who is stealing from you. I think when that message gets 
across, and when there's a consumer confidence that if they do 
report, something will happen, then there's a difference.
    I agree with what Frank is saying. If the citizens out 
there think ``what's the point?'' because law enforcement and 
the prosecutors aren't going to do anything about it, we're 
going to fail.
    The Chairman. Very good.
    Senator Corker is next, but I would like just a couple of 
minutes because Senator Wyden has said he needs to leave. Would 
you like to ask a question?
    Senator Wyden. If that would be all right with Senator 
Corker. Mr. Chairman, Senator Corker has been here a long time. 
If he has just a couple of minutes worth, I'd certainly--
because he's been waiting a long time--let him ask.
    Senator Corker. It's okay.
    The Chairman. Go ahead, Senator.
    Senator Wyden. All right. Thank you. Thank you both. I also 
want to note that I guess there's been some kind of informal 
agreement, almost a gag order, that we're not allowed to go 
into Chairman Kohl's accomplishments.
    The Chairman. Correct.
    [Laughter.]
    Senator Wyden. But everybody knows that I never go along 
with these gag orders.
    [Laughter.]
    I only want to say that it's my intent to give a speech on 
the floor of the United States Senate when we get back to 
outline the accomplishments of Senator Kohl, this thoughtful, 
modest man, over the last years through this Committee, because 
it is an extraordinary record. I'm going to semi-respect the 
gag request for purposes of this afternoon, but I hope folks 
will stay tuned because we're going to talk on the floor of the 
United States Senate about the extraordinary record of Chairman 
Kohl, and I know Senator Corker very much agrees with this as 
well.
    I just wanted to ask a couple of quick questions.
    First, I think we all know, and it's something I've felt 
strongly about since the days when I was co-director of the 
Gray Panthers, that this history of stealing and ripping off 
seniors is a long one, and the bad guys, they're pretty savvy, 
and every generation seems to be savvier than the previous one.
    So what we're up against is constantly trying to stay out 
in front of them as they turn to new techniques, and I wanted 
to ask just a couple of questions because my colleagues are 
being so patient.
    The first I think I want to direct to Skip Humphrey, who 
has been doing wonderful work for seniors for lots of years, 
and we've worked together on a number of issues. My sense is a 
lot of the bad guys, a lot of the worst actors are now shifting 
to online exploitation of seniors. It's almost like they 
rattled those old windows, you all closed some of them, so they 
went to new ones.
    If you could, General Humphrey, give us a sense of what 
we're doing to beef up our efforts to deal with online 
exploitation of seniors, if you would.
    Mr. Humphrey. Thank you very much, Senator. First of all, 
of course, we're working as closely as we can with our 
colleagues at other Federal agencies, and with state and local 
efforts in this area. But one of the things that is happening 
as the baby boomers shift and as another generation comes 
forward is that more and more people are comfortable using the 
Internet. Therefore they become more vulnerable, in a sense, to 
that kind of exploitation.
    One of the things is to just help citizens understand what 
the protections are. The first thing to understand, the most 
basic, is if it sounds too good to be true, it probably is. No 
matter whether it's on the Internet or whether it's coming 
through the door or in the mail or any other thing. It's just 
to understand that if something really sounds like something 
positive, you yourself are probably the best defense.
    Secondly, of course, as was indicated, this whole issue of 
personal I.D. is very, very important. Our efforts will be 
looking towards that as it relates to financial transactions, 
and certainly there's a broader range as was indicated by the 
testimony here.
    The third area that I would suggest is that we are going to 
be going online with these how-to guides for fiduciaries. Many 
times people are identified in power of attorney documents as 
agents, and they don't know the first thing about what they're 
supposed to do, or what the risks are with regard to the 
resources that they are supposed to manage for another person. 
So having those guides available to educate people can be very 
important, particularly as it relates to the congregate care 
facilities and those who manage the congregate care facilities.
    So those are just some of the things that we're working on 
within the framework of the new Internet age.
    Senator Wyden. Good.
    A question for you, Mr. Abagnale, and I want to give credit 
where credit is due. The Medicare card legislation, which I am 
the Democratic sponsor of, is really the work of Senator Kirk, 
Senator Kirk of Illinois. He could not be here today, but I 
think he's come up with a logical bipartisan approach, and 
we're going to do everything we can to advance his bill.
    My question to you on that legislation is what are the 
consequences of not doing it? What are the consequences of not 
having, for every Medicare beneficiary in the country, a way to 
make sure that their name and their full Social Security number 
is there to see and it is, in effect, something that can't be 
ripped off and stolen the way it is?
    Mr. Abagnale. Well, as I mentioned earlier, I think that 
the Medicare card with the Social Security number followed by a 
letter is just an open invitation for criminals. They know that 
if they see the card----
    Senator Wyden. It's the status quo.
    Mr. Abagnale. Right, as it is today. When you present the 
card at a doctor's office, unfortunately I think that many 
people believe that doctors' offices close up their files at 
night. Most doctors' offices just have straight file cabinets 
that do not lock down at night. Consequently, there are people 
who tell the janitorial service, ``if you take a Post `Em and 
write down the person's name, address, date of birth off the 
copy of their Medicare card that the doctor made, and their 
Social Security number, I'll give you $100. So if you give me 
one Post `Em, $100. You give me five Post `Ems, $500.'' 
Obviously, it's very enticing to people.
    So as it is now, what I'd like to see, as we have done in 
many states, we've taken the Social Security number off the 
driver's license. We have started to remove it from college 
campuses, from identification cards. I would like it if we 
removed it from our military cards for identification. The one 
final place that we have left that we have not removed it is on 
the Medicare card.
    So I think it would be extremely wise for the government to 
close that final loophole, and that will go a great long 
distance to protecting people from having their identity 
stolen.
    Senator Wyden. Thank you. I'm going to submit two questions 
for the record because Senator Corker has been so kind in terms 
of giving me this time. One will be a question for you, Mr. 
Abagnale, on the question of opening up the Medicare database. 
I think you know Senator Grassley and I believe that if you're 
ever going to really get a better handle on this relatively 
small number of physicians in particular who are exploiting the 
program, you've got to get access to that database. I'll submit 
it for the record.
    And for you, General Humphrey, I'm going to ask you a 
question about the question of living facilities and looking at 
ways to better control those who somehow find a way to exploit 
the residence. This also touches on an issue Chairman Kohl and 
Senator Corker know about, and that's the question of these 
pension poachers for veterans.
    So I will, just in the interest of time, submit that to 
you, General Humphrey; one for you, Mr. Abagnale.
    Senator Wyden. And to my friend Bob Corker, thank you for 
giving me the time.
    Everybody stay tuned when on the floor we can list the gag 
order and we can talk about Chairman Kohl and go through his 
record the way I think it ought to be appropriately discussed. 
Thank you.
    The Chairman. Thank you, Senator Wyden.
    Senator Corker.
    Senator Corker. Thank you, Mr. Chairman, and thank each of 
you for your testimony. This is a great way to round out this 
year and start next year hopefully with a focus on this.
    But, Mr. Abagnale, I was interested in you talking about 
technology and that it's 4,000 times easier to do something 
today than it was 40 years ago, or whatever the number was. In 
that same light, I would suppose there are, through technology, 
all kinds of ways today to also detect that, and I wonder if 
you might--in other words, it's easier with technology to 
commit fraud, but I assume there are also ways of detecting 
that.
    I wonder if you might talk about some of the breakthroughs 
that exist there from the standpoint of using technology to 
keep this from happening in the first place.
    Mr. Abagnale. Yes, sir. Let me clarify what I mean by that. 
Forty years ago, for me to forge a check, I needed a Heidelberg 
printing press. The press cost a million dollars 40 years ago. 
It was 90 feet long, 18 feet high. It required three journeyman 
printers to operate it. So as they showed in the movie, I built 
scaffolding on the side of the press to eliminate the two other 
printers. I had to learn to do color separations, negative 
plates typesetting. I used chemicals.
    Today, one simply opens a laptop, picks a victim out of 
corporate America, Delta Airlines, catches their logo, puts it 
on a diagram of a check in full color, and in 15 minutes has 
created a beautiful Delta Airlines check.
    Forty years ago, I wouldn't know where Delta Airlines 
banked. I wouldn't know who the authorized signer of Delta 
Airlines checks was, and I certainly wouldn't know their bank 
account number. But because we live in a too-much information 
world today, all I have to do is call Delta Airlines corporate 
office and ask to speak to someone in their accounts 
receivables and say that I would like to pay a statement, but I 
would prefer to wire them the funds, and they would give me 
wiring instructions, which means that they would tell me where 
they bank, on what street, what city, routing number, account 
number, and all the information I need. I would hang up and 
call back and ask for corporate communications today and ask 
for a copy of the company's annual report, and they would send 
it out to me, but on page 3 would be the signature of the 
Chairman of the Board, the CEO, the CFO, the Treasurer, the 
Comptroller, and with white glossy paper with camera-ready ink, 
I'd just scan it and put it on a check.
    So the technology has made it a lot easier, and social 
engineering has just changed. It's gone from a telephone now to 
a computer. It's the same thing, seeking information from 
individuals.
    So I think we have technology just like the Smart Card, and 
technology that the government has come up with for our new 
currency since 1996 to make it much more secure. We've seen a 
great decrease in the replication of our currency. We have the 
technology to be able to prevent some of these things. Of 
course, these things cost money. They take time and research. 
But you only fight technology with technology. So you always 
have to be one step ahead. So you look at the problem and you 
come up with a solution. You can't sit on the solution. You 
have to then be working on the next solution forward.
    But certainly American know-how and American technology can 
prevent a great deal of these things from occurring. We just 
have to continue to work on it.
    Senator Corker. And does it appear that the enforcement 
agencies that care about these things or are doing those things 
to stay one step ahead?
    Mr. Abagnale. I'm certain that they are. What concerns me 
is you rob a bank today and you get $7,500 or the most the 
teller might have in their teller window, $4,500, and you might 
go to jail for 20 years when they catch you. You rob a car, you 
take it across the state line. Both the car and the bank were 
insured. They got their money back, if they didn't get their 
money back from the thief.
    But when you go out and you steal someone's life savings, 
you take their pension, you take their entire retirement, their 
entire future, they have to go live in poverty because of that 
crime. It is ridiculous that that person walks away with a slap 
on their hand or ends up with 18 months in a prison. That's 
just absurd.
    I think we have to see it for what it is. It is a very 
serious and devastating crime and should be looked upon that 
way by law enforcement and the prosecutors who prosecute the 
crime, and the judges who render those sentences to those 
criminals. They are much more devastating than the guy who 
might rob the bank or steal the car.
    Senator Corker. And to whoever wants to answer this, what 
is the order of magnitude of crimes against elderly citizens 
that are committed by those that are familiar to them, that are 
relatives or friends, and that that is perpetrated by people 
totally unknown to them and from the outside? What would be the 
percentages of each?
    Mr. Humphrey. Senator, my best understanding is that over 
5% of adults aged 60 and over are victims of financial 
mistreatment by a family member. It's a very significant 
number, and it's----
    Senator Corker. Five percent is by people who are familiar 
with the----
    Mr. Humphrey. That are familiar, absolutely. I will give 
you an example from a conversation that I had in your state, 
Senator, with a group of elderly folks who were helping one 
another deal with some of these problems. I asked, well, how 
are we going to get people to report them? That is a challenge 
because it's an individual that they know, and probably a 
member of their family. They don't want to report them to law 
enforcement, and personally the person reporting is embarrassed 
that it's happening. I said, well, how would you see this 
happening in your family?
    This woman said--she nailed it right on the head. She said, 
Skip, I've got seven kids. I love every one of them, but I only 
trust three.
    [Laughter.]
    Mr. Humphrey. In a sense, she was making a judgment on who 
was to be the person that she might look to.
    Part of the effort here needs to be that education of 
helping people understand that they need to make wise choices 
with regard to those who are going to be their caregivers, 
formal or informal. The other part is just as we have heard, to 
have the government structure to be able and ready to take on 
that responsibility once a report is made. Part of the 
challenge here is to find out where and how best to get that 
reporting.
    Another example, if I could just take a moment, Senator, 
was an opportunity when I was visiting with tribal elders. One 
of the ways they come to grips with this within the framework 
of a family is the Navajo Nation has developed the concept of a 
peace council. It brings together individuals within the tribal 
community, and law enforcement to work together to develop the 
resolution of the problem, to stop the theft, and at the same 
time to work through a way in which to deal with the abuse that 
is taking place.
    So we're looking at a wide variety of approaches of how to 
come to grips with this, including making sure that there is 
the opportunity to report directly to law enforcement.
    Mr. Greenwood. Senator, if I could just also add, part of 
the problem is that we don't really know the answer to your 
question because so many cases are unreported, and therefore 
undetected. And the cases that we know of that come to my 
office, I would say the majority of physical abuse cases are 
committed by someone who is close to them. The majority of 
financial abuse cases are committed not by a family member, 
although some are, but by someone who has got into their life, 
a caregiver, an unlicensed contractor, a professional advisor, 
somebody who has built up this relationship of trust with the 
victim.
    But then there's this whole myriad of unknown predators out 
there online who serve behind anonymity, overseas, who are 
conning their victims. The victims are wiring the money, but 
they never tell us because they're too embarrassed. So we 
really don't have a good handle on this.
    Senator Corker. Mr. Smocer, I'm not much of a buyer, but I 
sometimes end up with a credit card, and I hadn't been in for a 
while, and it's frustrating as heck to be standing there at the 
teller and the person with an American Express gets on the 
phone. I mean, it's a major pain. I'm sure most people have 
witnessed that before.
    And I guess, as you look at some of these transactions that 
would occur in financial institutions where maybe something 
large is happening that's unusual in a senior's account, you 
would think that there'd be some hurdle that people would have 
to go through for money just to, all of a sudden, $100,000 or 
whatever the number is, to go out of someone's pension.
    I'm just wondering why there aren't mechanisms like that 
that are employed in many other areas to keep that kind of 
thing from occurring.
    Mr. Smocer. Well, first, there are mechanisms, and the 
example you gave of the credit card situation is an example of 
a mechanism. You're in a strange town, you've never used a card 
there before, that's why the clerk ends up asking you to get on 
the phone to identify yourself. So there are the same kinds of 
monitoring systems and, to answer your other question, the use 
of technology to try to prevent fraud have been getting more 
and more sophisticated as time goes on.
    Now, one of the things that we talked to the Elder Justice 
Coordinating Council about is really two concerns that I think 
apply in this situation. Number one, there is a concern, and we 
asked for clarity around the question of--because some 
institutions have the question can we really divide out the 
elder population from the rest of our consumer population and 
treat it in a slightly different way.
    Some are concerned of how that deals with age 
discrimination laws, because in theory you're not to 
discriminate in any way against the elderly, but in a way that 
you want to positively carve them out, is that okay to do, 
because there we could add some additional monitoring. It might 
be lower dollar threshold limits on transactions involving the 
accounts of the elderly. It might be more follow-up when, for 
example, there's a change of address associated with an elder's 
account, that suddenly you want to verify with the elder that, 
in fact, they're the one who caused the change, it's not some 
fraudulent situation that's occurring.
    The other thing they talk about which is a bit of a 
conundrum is that ultimately and legally, the account is the 
elder's account. So in many cases, even when a suspicion of 
fraud is there, the question of can you legally stop this 
person from doing with their legally own money what they choose 
to do. One of the recommendations that we came up with and 
talked to the Council about was the ability to actually put 
temporary holds on a transaction. I'm sure Paul would 
particularly mention that in some of these situations where 
elders want to come in and wire money overseas because there's 
a scam involving--one of them being the purchase of a bride, as 
an example. Once that money is wired, it's virtually impossible 
to get it back, but it is the customer's money.
    Ultimately, no matter how much you want to try and convince 
them that maybe this is something they shouldn't do, you 
contact APS, by the time the customer wants the transaction 
executed, it may be too late. So having a way in a suspicious 
situation to be able to say, ``Yes, Mr. Smith, we'll go ahead 
and do that'', but hold on the transaction for a couple of 
days'' until we can get APS or law enforcement involved would 
be helpful.
    Senator Corker. There's just one other question, Mr. 
Abagnale. You mentioned the car theft issue and going across 
state lines, doing a couple of things, and you're right, people 
end up having insurance, they get their money back. Are you 
alluding to the fact that there should be a different sentence, 
if you will, for these types of crimes than exist right now? 
What were you trying to get at there?
    Mr. Abagnale. I was trying to say that, unfortunately, 
white collar crime in America, whether it be someone on Wall 
Street or it be somebody who is stealing from the elderly or 
someone stealing identities, are looked upon as a crime where 
there's really no victim, nobody was physically hurt, and 
consequently a lot of times it's not treated very seriously. I 
think that's a big mistake because I think they are extremely 
hurt when someone has lost their life savings and their pension 
from those crimes.
    So I think we have to look at white collar crime as an 
extremely fast-growing crime. I mean, fraud in this country has 
become overwhelming, almost impossible to enforce any longer. 
And consequently, I think punishment for these types of crimes 
has to be more severe.
    It is interesting that I committed these crimes 40 years 
ago, writing bad checks. I was a teenager, or when I was caught 
I was under 21 years old. A Federal judge in Atlanta sentenced 
me to prison for 12 years. I served four of those 12 years, 
having already served a year over in Europe when the Federal 
authorities returned me to the United States. That would have 
been considered a harsh punishment back then.
    But the truth is had they caught me today for the same 
thing I had done 40 years ago, I probably would end up with 
community service or probation, or probably 18 months in a 
Federal prison. So I, having served the time, know that those 
types of crimes where people's money is taken from them, people 
need to be punished for those crimes and need to be sent to 
prison for those crimes and not be treated as if there was no 
victim or it was a harmless crime.
    Senator Corker. Most of those sentencing laws, are they 
state or are they Federal?
    Mr. Abagnale. Most of them now don't--whether Federal or 
state, there are no determined laws that says a judge has to 
sentence someone for a certain amount of time to jail. It's 
usually up to the judge's discretion for the crime. So if the 
judge looks at it as somebody wasn't physically hurt, nobody 
was really beat up or taken advantage of physically, the judge 
may tend to give it a lenient sentence.
    I do go out and speak to U.S. Federal judges at their 
annual meetings and some of their semi-annual meetings, and in 
the Q&A I always bring up the importance of looking at these 
crimes in a different light, that they are very serious crimes, 
and I think that in America we are slowly starting to see, 
because of the Madoffs of the world, and because of the Enrons 
and WorldComms and Tycos and Arthur Andersons and all the 
things we've gone through over the last 10 years, I think that 
people are starting to realize that these types of crimes are 
very serious, both on the law enforcement side, on the 
prosecution side and even as American consumers we're starting 
to realize that these are devastating crimes and people need to 
be brought to justice and they need to be punished for those 
crimes.
    Senator Corker. Did you want to say something, Skip?
    Mr. Humphrey. Senator, I would just say that I'm aware that 
there are some states that do have enhanced penalties for the 
kind of theft that we're talking about against older Americans. 
There are some states that have that. There are also some 
states that provide for an accelerated process in their 
prosecution through docket control. So there are some 
mechanisms out there, and part of the effort that we want to do 
is to bring some of these interesting ideas and practices to a 
place where others can understand what the practice is and how 
effective it's been. So that's one of the things that we're 
looking at.
    Senator Corker. Well, thank each of you for your testimony. 
It's been really interesting, and I hope something good comes 
out of this. Mr. Abagnale, I'm glad you're on our team now.
    [Laughter.]
    Thank you very much. Thank you, Mr. Chairman, for a great 
hearing.
    The Chairman. Thank you so much, Senator Corker. Mr. 
Smocer, what percentage of your banks are currently making an 
effort to train their tellers to determine whether or not 
something fraudulent is taking place?
    Mr. Smocer. I don't know if I have an exact number for you. 
But I will tell you, with the working group that we formed, 
virtually all of our banking members. So almost 50 out of the 
50 we have are members of that group who are working to 
improve--either they have a program now or improve a program 
that they have now. So across the whole industry, I wouldn't be 
able to answer that question for you. But I know this is a very 
important topic to them.
    The Chairman. So you would suggest that there should be 
some training in the case of every teller?
    Mr. Smocer. Yes, I frankly think so, and part of what we're 
attempting to do, the group that we have is not only members of 
the Roundtable, but we've invited the other banking trade 
associations and credit union trade associations to have their 
members involved, and the group also includes a lot of folks 
from the agencies as well. For example, we've got CFPB involved 
and other agencies, because what we're trying to do is really 
build a broad sector-wide program, so something that any bank 
or any credit union can use as the base for their training 
program.
    And it is two-fold. It is not only just--well, it's almost 
three-fold. It's internal in the sense of employees, so 
employees who are the tellers and the front-end personnel who 
customers typically come in to see. It's also internal in the 
sense that we're trying to do work with the fraud investigation 
and fraud detection folks to make sure that, particularly on 
the investigative side, that internally they can build better 
cases to be able to hand off to prosecutors.
    I think one of the things that we recognize as an industry 
is that while Frank is very correct, trying to get in many 
cases law enforcement or a prosecutor, whether it's local or 
Federal, to take a case, they often have, because of their 
workloads, they often have thresholds, and below a certain 
amount it's hard to convince them to take an interest in the 
case.
    But we also know that if internally the financial 
institution can help build the case for them and put a lot of 
the material together and hand it over, then that typically 
incents them to take some action while we're there.
    And then the other component besides the internal side is, 
as I mentioned earlier, trying to help build this broader 
consumer education piece too, and use the banks to help build 
it, and use the banks to help distribute it and distribute the 
kind of material that others have talked about here.
    The Chairman. Mr. Greenwood, I see you pondering this 
question, the training of the bank tellers.
    Mr. Greenwood. It's key Senator. That's why when we saw the 
change in the law, making bank and credit union tellers 
mandated reporters, we saw a huge increase in the number of 
reports, because unfortunately a lot of banks and credit unions 
in other states are fearful of making that call to Adult 
Protective Services for fear that they will get retribution 
from their customer or their member. So even if a state doesn't 
want to make it mandatory, at least they should make it 
permissive and give the banks and the financial institutions 
the protection that they need to encourage them to make these 
calls.
    It also creates a responsibility on the part of Adult 
Protective Services, on law enforcement and prosecutors to 
reach out to these financial institutions. So we try to do 
that. In fact, in California we try to recognize good 
stewardship by banks and credit unions so that if they have 
actually intervened and thwarted a crime or have enabled us to 
prosecute, we want to give that bank teller due recognition and 
make sure that it's well known throughout the industry.
    The Chairman. You mentioned that financial institutions in 
California are mandated reporters.
    Mr. Greenwood. Correct.
    The Chairman. So how has this changed banks' behavior with 
regard to preventing and reporting financial scams against 
seniors?
    Mr. Greenwood. Well, initially what changed was the fact 
that because the law came into place, they gave those 
institutions a 15-month grace period to train their staff. So 
immediately we got awareness for the bank tellers and the 
credit union tellers, and that created in itself a lot of 
response by saying, wow, I didn't know these scams went on.
    For example, the grandma scam is huge all across the 
country, and we all know that one where the crook calls up and 
pretends to be the grandson, he's in jail and he needs $5,000 
bail money to get out of jail, and it's happening all the time. 
Well, the victim goes to the bank or the credit union to 
withdraw the money in cash so they can then go to Moneygram to 
wire it.
    It's amazing, until this law came into place, how few bank 
tellers and credit union tellers knew of the existence of this 
scam. So now they do, and as a result the training and the 
awareness in the banks and the credit unions has really 
improved the response.
    I think it's also helped encourage the bank tellers and the 
credit union tellers to know that if they do make the report, 
Adult Protective Services is going to cross-report to a trained 
detective in San Diego who will bring it to a dedicated 
prosecutor in my office, who will then hopefully bring about a 
prosecution. And actually the bank tellers are very keen to 
come to court and testify because they can see the end result 
of their initial phone call, and it's very gratifying to an 
employee of a bank to know that what that call meant in the end 
was either to stop the damage or to actually catch the crook in 
their tracks and put them away, and that's indeed very 
rewarding to the financial institution.
    Mr. Smocer. And, Senator, if I would follow up, I think 
Paul made a good point. As we think about the training, there 
are really two key aspects. One is awareness around the types 
of scams that are going on, so the grandmother scam, I need to 
wire money out of the country because, as I mentioned earlier, 
I want to buy a bride scam, which is a common one as well.
    But it's also somewhat behavioral. So the teller 
recognizing that the customer comes in with a companion, and 
that the companion appears to be exerting undue influence on 
the customer, actions like trying to pull the customer aside to 
question whether, in fact, it's their decision that's going on 
here or whether they're being influenced by this individual. So 
it's a little bit of both. It's awareness of the kinds of scams 
that are going on, but it's also trying to understand the 
behaviors that are inhibited when some of these situations go 
on.
    But the one thing I would also add to it, and we brought 
this up at the Elder Justice Coordinating Council meeting, and 
Frank kind of mentioned it earlier in a way, as we implement 
some of these new technologies, some of those technologies have 
an effect that we didn't often think about. So one of the 
things we talked about at EJCC was the Social Security 
Administration moving to an all direct deposit model, so elders 
not getting checks anymore, physical checks.
    Those physical checks that they got in the past were often 
a trigger for them to go to the branch, to see the teller, to 
see the folks that have known them for years that they always 
banked with. Now they may still want to do that just because 
they want to get out, but there's less of an incentive for them 
to actually go into a branch anymore, for someone to physically 
see them on an ongoing basis and be able to recognize that 
something is askance here or there's a change of behavior that 
is causing a red flag to occur.
    That's not to suggest in any way that the training isn't 
critical, but things are changing as we move into a more 
electronic world. That face-to-face just doesn't exist quite as 
much anymore.
    The Chairman. How often do banks alert the police, and 
under what conditions?
    Mr. Smocer. I would say any time there's a suspicion that 
something is potentially fraudulent, certainly when it's 
recognized to be fraudulent. There are situations, obviously, 
as we talked about earlier, where there are privacy concerns 
that need to be clarified, and I think once we can clarify 
those privacy concerns, particularly if we can have a ``hold 
harmless'' kind of model put in place, which is I think what 
Paul alluded to with the California law, that just report it, 
even if it turns out that it's not fraud, which is a key 
concern, because what if I report this and it turns out it's 
not fraud? Am I going to get in trouble? Am I going to get my 
institution in trouble?
    Those kinds of ``hold harmless'' agreements would go very 
far, I think, to enhancing it, because honestly I couldn't 
probably give you an exact number, but I will tell you I have 
talked to and heard many, many scenarios where the bank tellers 
in particular--I mean, they're looking out for their customers. 
They know these folks. They've known them, in many cases, for 
years and years and years, and they want to do the right thing.
    The Chairman. So are you suggesting that if we had these 
``hold harmless'' laws across the country, we'd be in much 
better shape?
    Mr. Smocer. I think if we can clarify the privacy issue, 
and I think CFPB is working on that to some extent. But 
certainly I think that would--my personal opinion would be that 
would go a long, long way to enhancing the reporting.
    The Chairman. A long, long way.
    Mr. Smocer. Yes.
    The Chairman. Paul, do you think so?
    Mr. Greenwood. Well, I do, Senator, because until we had 
this law in place, as I said, I would have discussions with 
banks and credit unions all the time when I would see a crime 
report coming in where a bank teller did not make a report. I 
would call up the bank and say why didn't you? And the 
immediate response was we're just afraid to do that, we don't 
want to get sued. So I think if we provide the protection for 
the financial institutions, and the encouragement, then it will 
allow institutions to encourage their bank tellers to make that 
call.
    As my colleague has said, occasionally, 1 out of 100, it 
might be a wrong call. But no one is going to blame the teller 
for making that call. It's the silence which is the enemy.
    The Chairman. Okay.
    I'll ask you, Ms. Brown, what are the best practices you've 
found across the four states that you studied that work well 
for preventing and responding to elder financial abuse?
    Ms. Brown. Well, we've been hearing about many of them 
right here. I think one of the things that has really struck me 
is in this panel the types of best practices that we saw, like 
good training for bank employees, like being careful about 
background checks. Many of those kinds of things are things we 
saw in the states. But also I think what has really struck me 
today is that there are so many good ideas and so many 
interesting public awareness efforts with brochures that have 
really attractive and interesting titles.
    But what we see is that there are different areas of the 
country or jurisdictions that have a stronger commitment to 
this or a stronger interest, and that's one of the reasons why 
we recommended that the Elder Justice Coordinating Council 
develop a national strategy, because I think the kinds of best 
practices like developing brochures that really reach people, 
or doing training programs that reach relatives or bank 
employees are something that could be beneficial and would be 
helpful to be spread out throughout the country and not just in 
the spots where there's a much stronger commitment or interest 
in this.
    The Chairman. All right.
    Any other comments from members of the panel?
    Mr. Humphrey.
    Mr. Humphrey. Mr. Chairman, I would just like to add that 
part of the effort here, I think--and it's reflective of what 
has happened in California and elsewhere. We're in the process 
of developing upwards of four model prevention networks that 
are slightly different in each location. We want to try and 
develop these coordinated local networks between public, 
private, law enforcement, non-profit organizations, and state, 
local and Federal agencies to work locally on these efforts. 
Part of these efforts will be in the area of education and 
training and just getting people to know one another.
    What was so successful in California, one of our models, 
was just bringing this all together. But then again, it was 
also framed with a state law of reporting that encouraged that 
effort to take place.
    There's a lot of room for these programs to take place. 
There are different ways of doing it. That's the wonder of 
working in the states. You find different approaches. But the 
coordination and collaboration both at the Federal, state and 
local level is key, and that's why I think the Coordinating 
Council will have a very important role to play.
    The Chairman. Good.
    We thank you all for coming to speak to us here today.
    This is the last hearing of the Aging Committee for the 
112th Congress. We've been able to accomplish a lot, and we 
worked hard to save taxpayer dollars while protecting our 
seniors.
    There are many people that made our success possible. First 
I'd like to thank my Ranking Member, Senator Corker. He's been 
a delight to work with, and I appreciate his open manner and 
bipartisan nature, which I think has been obvious here today, 
as well as throughout the year. His staff, especially his staff 
director, Mike Bassett, have worked well with our side and for 
the people of his state, Tennessee.
    No senator accomplishes anything in this institution 
without staff, and I've had a great one over the years. They 
have always focused on doing the right thing for seniors and 
protecting our most vulnerable people in this country. Joy 
McGlaun, Sarah Levin and Anne Montgomery have been my 
preeminent experts on health care. Cara Goldstein and Joel 
Eskovitz have done a great job protecting seniors and their 
retirement savings. Jack Mitchell, my fearsome, fearless 
investigator, has done a great job uncovering malfeasance in 
the public and private sector. Ken Willis has been great 
ensuring that the work we do gets noticed. Patricia Hameister 
has made sure that all of these hearings go off without a 
hitch, and for that I'm grateful. I'm also grateful to Zac 
Tretow and Carissa Lewis, who make the people of Wisconsin feel 
welcome. And as for my staff director, Chad Metzler, who has 
been with me in various capacities for the past 16 years, he is 
indeed irrepressible and irreplaceable.
    So I thank all of them, and we thank you all for being here 
today, and we wish you well.
    [Whereupon, at 3:25 p.m., the hearing was adjourned.]



                                APPENDIX

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