As published in The Independent November 13, 2001

Editor's note: This article is the second in a two-part series examining financial abuse against elders in the community

By Dwana Simone Bain
Staff Reporter

Abuse cases throughout the county have decreased in every category except elder abuse, according to the San Mateo County Crime Report. Between 1997 and 2000, the number of elder and dependent adult abuse cases reported in the county increased from 336 to 882.
Financial abuse cases reported in the county nearly doubled -- from 74 cases in 1997 to 134 in 2000.
The report attributes the increase, in part, to increased awareness. But as recognition of the problem increases, so does advocacy on behalf of those victimized.
Pacifica-based non-profit ElderAngels specializes in helping victims of financial abuse.
ElderAngels' co-founders -- private investigators Ann Flaherty and Fay Faron -- have seen all sorts of scams and virtually all types of perpetrators.
People swindling family members takes place "all too often," Flaherty said, and they're usually the hardest cases to pursue. Often the victim doesn't want a relative going to jail, Flaherty said, and sometimes it's harder to persuade a jury about fault. Caregiver theft from the elderly has also skyrocketed in recent years, according to Flaherty.
Many older people want -- but can't afford -- home care. To save money, some hire unscreened caregivers under the table.
Then "the caregiver works their way into the heart of the elderly person," Flaherty said. If the victim trusts the perpetrator, "then they're halfway home"
Often someone will befriend an elderly person and invent a story -- for instance, that they need an operation.
Once the first "hit" is complete, a swindler often doesn't stop until the victim's funds are depleted, Flaherty said.
A typical hit ElderAngels sees is $80,000 to $100,000, Flaherty said. But the agency has worked on many cases with up to $1 million damages. The Elder Abuse and Dependent Adult Civil Protection Act is designed to protect the elderly from fraud and abuse.
The 1987 legislation recognized that the elderly need protection, and required law enforcement and other agencies to "take any actions necessary to protect the elder or dependent adult ..."
The legislation also enabled "interested persons to engage attorneys to take up the cause of abused elderly persons and dependent adults." Within the past several years, many police departments and district attorneys' offices have established specialized units to investigate elder abuse.
The San Mateo County District Attorney's Office prosecutes both physical and financial elder abuse.
The office doesn't statistically separate by type of elder abuse. But in the fiscal year from July 1, 2000 through June 30, 2001, the office filed 10 felony and 14 misdemeanor cases, not including cases still under review.
Whether cases are charged as misdemeanors or felonies depends on the amount embezzled. Misdemeanor cases are punishable by up to one year in county jail and a fine of around $1,000.
Felony cases are generally punishable by a state prison sentence of at least 16 months and up to three years.
Perpetrators can also be subject to civil litigation, where the claimant can sometimes recover double or triple damages. But victims are often reluctant to come forward without proof," Flaherty said. Faron and Flaherty determine if the suspect has told the victim the truth, by comparing the victim and suspect's stories against information uncovered through their own investigation.
ElderAngels collaborates with the victim or victim's family to compile evidence -- such as financial records -- crucial to the case. ElderAngels also works with the District Attorney's or Public Guardian's office, Flaherty said.
Charlene Silva is director of San Mateo County Aging and Adult Services, which over sees the county's Adult Protective Services Division and the Office of Public Guardian.
Adult Protective Services evaluates whether an elder's actions were "informed, or someone took advantage of them," Silva said.
Sometimes people simply make poor choices. "Everybody has the right to folly," Silva said. Even so, "we're probably going to investigate ... very aggressively."
If the victim was unduly influenced or incapacitated, Silva said, "We can take the necessary steps through the legal system, to get a judgment against the perpetrator."
A medical evaluation determines whether the victim is at risk because of becoming gravely disabled. "Those are the bases by which the Superior Court makes their decision about whether or not somebody should be conserved," Silva said. "We have roughly 800 individuals [conserved] at any one time."
Sometimes the county becomes conservator, sometimes private conservators also assume responsibility.
The county uses a two-pronged approach to resolving abuse complaints, Silva said. Some cases are referred directly to the district attorney. Others also go through Aging and Adult Services to ensure a victim receives proper care.

Fighting fiduciaries
San Bruno resident Donna Hughley said she found herself swindled out of the title to her home, after her nephew persuaded her to temporarily sign it over to him so he could take a loan on the property.
Hughley is suing not only her nephew, but also the lending company that facilitated the loan.
"The lender profited by extending this loan," said Hughley's lawyer, Donald Dowling. "Mrs. Hughley was unsure of what she was doing while she was at the lender's office. She expressed some reservations and they went ahead anyway."
Dowling said, "They ignored a situation that was presented to them and elected to simply close their eyes so they could profit from the transaction ... The lender knew that Mrs. Hughley was giving up title in this situation for no consideration."
Dowling seeks to recover the difference between existing loan and the money that they funded.
The Elder Abuse Act was recently strengthened to protect elders from such situations.
Burlingame attorney Niall McCarthy specializes in elder law for Cotchett, Pitre and Simon, a firm that has prosecuted financial institutions involved with defrauding the elderly.
In 1998, the firm won a $5 million settlement from the Commonwealth Life Insurance Co. in a class-action lawsuit. The firm represented 1,505 plaintiffs who purchased reverse mortgages from Commonwealth with excessive up-front fees and other unanticipated charges.
The settlement was reportedly the first time the Elder Abuse Act was used to battle a reverse mortgage scheme.
In a reverse mortgage, a lender makes monthly payments to a homeowner, with the homeowner's equity as collateral.
The equity repays the loan when the homeowner moves or sells the home, or dies.
Reverse mortgages can be attractive to seniors, who are often house-rich and cash-poor.
Unfortunately, some unscrupulous companies bury fees into such arrangements as to make huge profits at an elder's expense. McCarthy's firm is currently handling another class-action lawsuit involving reverse mortgages.
In 1998, the firm filed suit against Transamerica Corp., its subsidiary Homefirst Inc. and New York-based Metropolitan Life Insurance. The case has six named plaintiffs and more than 1,000 claimants. The suit was filed on behalf of all people who signed such a contract. One of the plaintiffs -- a woman named Teresita Zalbidea -- signed a reverse mortgage agreement with Transamerica in 1995.
Over three years, Zalbidea was paid $194,000. Charges to pay off the loan amounted to $509,000.
The defendants first motioned unsuccessfully to have the case transferred out of the county, McCarthy said, then motioned to compel arbitration.
Arbitration was denied, McCarthy said, because the arbitration clause in the signed contracts was so slanted in favor of Transamerica it couldn't be enforced.
The case is still "far from over," McCarthy said.
Cotchett, Pitre and Simon was also one of the first firms to successfully utilize the Elder Abuse Act against an individual. In that case, a young woman befriended an elderly man who'd recently lost his wife.
The woman embezzled more than $400,000 -- the victim's life savings. The man's public guardian retained the law firm to recover the money. The defendant agreed to repayment after the attorneys in the case gave opening statements.
What to do If someone has already been cheated, "You have the right to file a civil lawsuit," McCarthy said.
If a senior is ill or has died, proving the case can be difficult, McCarthy acknowledges. However, "In many situations you can recreate what happened by looking at the circumstances," he said.
To prevent victimization, McCarthy cautions senior citizens to bring in an advisor -- a family member, a lawyer or friend -- "To honestly evaluate whatever the product is that the senior is purchasing." Flaherty added it's crucial for older people to have a safety network of relatives or friends.
If a perpetrator sees an elderly person has no outside contact, Flaherty said, that person becomes easy prey.

Where to go for help
The San Mateo County Aging and Adult Services has a 24-hour seven-day-per-week hotline for elder abuse victims. Call (800) 675-TIES.
ElderAngels assists victims of financial elder abuse, pro bono or for a reduced fee, depending upon a victim's ability to pay.
Contact the agency at: (415) 284-1160 or e-mail elderangels@aol.com
Elder abuse can also be reported to local law enforcement.