Scammed: Many in Cache Valley victimized, particularly the elderly

Matthew K. Jensen | Posted: HJnews.com - Sunday, September 26, 2010 12:30 am

Retirement would have been a breeze for a Cache Valley man who had a pension, savings and an impressive real estate portfolio, but swindlers left him with just a couple hundred bucks and the hope that he might one day actually win the Jamaican lottery.

Money experts agree that fraud comes in all shapes and sizes and targets people of various backgrounds and finance savvy. Yet bankers and financial crime experts say an alarming trend involving senior citizens and phony prize offers is on the rise.

The above victim, whose family has requested not be identified, was contacted by an individual who claimed to represent the lottery and that a cash prize had been won. But claiming the millions would require fees to cover handling and taxes.

Robert Atwood, a Logan attorney who represents the victim in ongoing bankruptcy hearings, said the man fell for the scam and sent numerous money transfers to people he believed were lottery officials.

To keep the victim hooked in the game, the masterminds behind the fraud sent him small checks for $25 or $30, claiming larger winnings were on the way. The victim cashed the checks but they would later bounce, and the bank withdrew the funds from the man's account.

The victim's son said his father was convinced the transactions were legitimate and that it was only a matter of time before the jackpot would show up in his mailbox.

"They worked on his head," said the son about the scammers. "It was like an addiction. He had all the classic behaviors like an alcoholic."

And the addiction got worse.

New offers showed up in the mail from other lotteries and false prize claims and the victim took the bait from each of them.

"Other entities found out he was an easy target," said Atwood. "Once someone gets targeted as a potential mark, there must be some networking going on because my client started getting hit from multiple directions."

According to the family, the man lost a total of $149,000 and transferred money to people he didn't know more than 130 times.

Atwood said the victim even borrowed from banks and opened nearly a dozen accounts to cover the expense of wiring money all over the world.

When family members intervened after suspecting their father was going broke, they canceled his phone service to stop the calls from the lotto men. But the scam artists were ahead of the curve and on two occasions shipped the victim a cell phone so they could maintain verbal contact with him.

Now, after more than three years and hundreds of phony transactions, the victim's family is left with nothing but a paper trail of Western Union and money transfer receipts.

Atwood said adult children should help warn their parents about lottery and check scams and offer help with finances in an increasingly connected world of money.

"Adult children need to discuss this problem with elderly parents," he said. "They need to warn them about it and offer to help with their finances."

Financial institutions are combating the problem as well, training staff to watch for suspicious checks and stories that sound too good to be true.

John Russell, chief financial and security officer for USU Charter Credit Union in Logan, said he's seen a slew of scam stories, each more interesting than the last.

"We've seen everybody. Rich, poor, old, young - no one is immune to it," he said. "It doesn't matter what your background is."

When a customer tries to cash or deposit a check, he explained, federal regulations require that funds be made available to the customer usually within one to five days. Once the funds are available, however, nothing guarantees the check is legitimate and if the victim has already sent the money overseas, he or she is responsible for paying it back to the financial institution where it was cashed.

Russell says credit unions are training employees to detect fake documents and help customers understand the risks of cashing risky checks.

"Our tellers are trained to try to deal with the situation especially when someone comes in with a large check," he said. "I think the consumer is getting pretty savvy about things to watch out for. However it's getting to the point where the scam artists are doing a lot better job at trying to get people to fall victim to their scams."

Mike Guthrie, vice president and branch manager at a Zions Bank office in Logan, says his office is seeing an increase in customers who to try to cash or deposit false checks.

"Zions Bank spends a lot of time and energy and money training our employees to identify these types of scams," he said. "There are a lot of people who are vulnerable, they're desperate and they want to believe so badly that they don't exercise as much caution as they might if they weren't needing it so bad.

"That's what makes this a tragedy. These people who can't afford to lose much of anything are becoming the victims of these scams."

Guthrie said both the bank and victim lose when people fall for check scams.

"You're responsible for the validity of the check," he said. "If the check comes back, the funds are withdrawn from your account."

Guthrie said some states will bring legal action against the scammer and the victim who deposited or cashed the check.

The son of the Jamaican lottery victim said the ordeal has changed his father. The man told his children he sometimes dreams at night that an award is waiting for him and all he needs to do is send a small fee to expedite its delivery.

Before the incident, he owned several homes that are now in foreclosure to help pay the thousands in accumulated loans and debts he collected to get his pot of gold.

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