Saturday, September 24, 2016

At 85 he foiled a financial scam; other seniors aren't so lucky

At 85 he foiled a financial scam; other seniors aren't so lucky

Editor's note: This Shark observes that the "mastermen" of financial scammers, The Probate Court of Cook County, has immunity from being "foiled". Law enforcement has been advised of almost all  legal infractions of the court's criminal financial enterprise and yet nothing is done to punish the perps.  Lucius Verenus, Schoolmaster,

Eleanor & Stanley Podolski, Jr.
MARYLAND HEIGHTS • Coded locks on the retirement center doors speak to the challenges confronting patients and their caretakers. The security is supposed to keep people such as Stanley Podolski Jr. in, not out.

He landed here after wandering off from less-secure facilities. Podolski, 88, has dementia. Still, he remembers growing up in north St. Louis. Being a butcher there, then a loan officer at Pulaski Bank when it was on Cass Avenue.

He remembers being involved with St. Stanislaus Kostka Church, an independent Catholic congregation with Polish roots.

But he needed prompting to remember how he foiled a crime a few years ago that victimizes more folks like him every year. Somebody tried to rob part of his precious nest egg.

It wasn’t done with a mask and gun. Rather, blame fell to a woman he liked dealing with who sat at a desk off to the side of the teller windows at Regions Bank, 11920 New Halls Ferry Road, in Florissant.

Podolski invested $25,000 in certificates of deposit there in 2013 with the help of Kathryn Ann Smith, now 66, a bank associate, according to a police report that laid out what happened next.

When Podolski’s certificates matured, police records say Smith suggested that he put the cash in a money market account, which he did.

Six months passed.

Then Podolski wanted the cash in the money market account to be invested in a new batch of certificates of deposit. Smith was to complete the necessary forms. Podolski received a letter in the mail — without Regions Bank letterhead — detailing the five different CD accounts.

When Podolski checked his balances one day, there were discrepancies. With the help of his son, a former auditor and bank board member, they found monthly withdrawals they didn’t know about from the former money market account worth at least $22,000.

He had been the victim of a type of abuse that can be a tricky arena because it’s often laced with shame, diminishing mental health, stressed family dynamics and hopelessness.

Experts say financial exploitation of the elderly typically involves a person in a position of trust: anyone from a caregiver to a longtime hairdresser. There’s also the garden variety of scam artists who befriend seniors by telephone, online or in person.

And it’s a crime that will be a threat for a long time, with about 10,000 people turning 65 every day nationwide. Pockets of St. Louis County in particular, which saw tremendous growth following World War II, are ripe territory for financial abuse of older adults.

There are systems in place to help, but with limited effectiveness.

A Missouri law passed last year, for example, gives financial firms greater authority to step in if they have cause to believe a senior is being exploited.

The state, meanwhile, has seen a spike in calls to its elder abuse hotline.

In 2015, there were 27,595 calls to the hotline, of which 5,497 were about finances. In 2012, there were 23,693 calls, including 4,174 regarding finances, a fourth of which are typically substantiated.

“We are worried that elder abuse is underreported, not just in Missouri, but nationally,” said Celesta Hartgraves, director of the state’s Division of Senior and Disability Services.

She said more people will be abused as the number of older adults increases. She said seniors can be lonely. They tend to listen to scams. Some have greater financial resources yet suffer cognitive declines. They are often embarrassed to report being taken advantage of.

“Seniors are really attractive targets for that kind of fraud,” Hartgraves said.

Raising suspicions

Podolski’s case is unusual in that the victim got his money back just before dementia set in.

But that’s probably only because Stanley Podolski had a son — and a former bank auditor at that — as an advocate.

Even then, it took pushing for answers.

Podolski said in an interview that he had told the bank branch manager about his suspicions of missing money, but the manager initially suggested that it was Podolski, 85 at the time, who was probably mistaken. The manager described Smith, who had worked at the bank for years and was about to retire, as golden.

The more Podolski and his son pressed, the less the bank’s story held up. Surveillance tape didn’t place Podolski at the bank at the time of withdrawals. Signatures were off. And, amid Podolski’s chats with the manager, Smith walked off the job, never to return.

St. Louis County police found her at home, in the 10400 block of Durness Drive. Her elderly mother let them in and a detective explained the investigation. According to the police report, Smith said she had no idea what the detective was talking about. The detective, who didn’t believe her, showed her a withdrawal slip.

“That’s my handwriting, but that was for my mother’s money market,” Smith told police.

She clammed up and refused to say more without an attorney. Police arrested Smith on the spot. She was accused of forgery and financial exploitation of the elderly, charges to which she pleaded guilty.

“I caught her,” Podolski said from the retirement home.

Eleanor, his wife of 66 years, sat beside him, helped him navigate his history.

“She probably thought he wouldn’t remember,” Eleanor said about her husband being targeted.

Changing the law

In typical cases, seniors aren’t financially savvy enough to detect fraud, or don’t have children who hawkishly monitor their finances. There are seniors who have their savings drained and are too embarrassed to talk about it.

Financial institutions are aware of the risks but have been somewhat limited by what they can do if they suspect someone is taking advantage of a client. But the laws are changing.

Wells Fargo Advisors formed an elder abuse task force in recent years at its St. Louis headquarters to spot suspected abuse and poor judgment. The firm said it has worked with the attorney general’s office to get clients assistance and guardianship.

The task force looks for red flags, like when a 92-year-old client worth $8 million appeared confused and thought his accountant worked for the post office. It turned out no fraud was taking place, but Wells Fargo Advisors asked police to do a wellness check and filed a report with Adult Protective Services for possible self-neglect. The man has since been moved to an assisted-living facility and his neighbor is in the process of being appointed guardian.

In another case, Wells Fargo Advisors intervened when a widower in his 60s formed an online relationship with someone he believed to be a 37-year-old woman. He eventually sent her $26,000 when she asked for money to resolve a legal matter. The man’s daughter caught on but wasn’t authorized to make decisions on her father’s account.

Eventually, Wells Fargo Advisors contacted the attorney general’s office, and an investigator was assigned. The man is being assessed for guardianship.

Ron Long leads the task force, which was formalized in 2014.

“A lot of it was the numbers continued to grow,” Long said of suspicious cases. “The thought was to have a central place for financial advisers to call.”

He worked with lawmakers to create the Senior Savings Protection Act, which was enacted in Missouri in 2015. It allows broker-dealers to notify certain parties of potential financial exploitation.
They can also refuse disbursement of funds from a brokerage account for up to 10 days.

Wells Fargo Advisors has relied on the new law just once since it passed. The state has received six complaints and is working to train brokers on how to make use of the law.

Meanwhile, California-based Wells Fargo bank was recently slapped with a historic $185 million fine and more than 5,000 employees have been fired for opening accounts without client knowledge as a means to boost sales figures.

On a smaller scale, Kirkwood financial adviser Robert S. Beyer II, 45, was just convicted in federal court on charges stemming from promising investors 8 percent to 18 percent annual returns from Heroic Life Assurance Company, which had a foundation bankrolled by a fictitious wealthy South American named Jesus Cristobal. Officials said the victims, in their mid-50s and early 60s, lost about $300,000.

Saying sorry

Much of the responsibility to ferret out abuse remains in the awareness of seniors themselves and their caregivers.

After the incident at Regions Bank, Podolski’s son, Stanley Podolski III, took over control of his parents’ finances.

“I can’t believe that my dad was the only one” who was ripped off by Smith, he said.
He and his parents shook their heads at the sentencing.

“We couldn’t believe that she didn’t get any jail time,” said Eleanor Podolski.

Smith pleaded guilty and was sentenced to five years’ probation. If she fulfills the terms of probation, the forgery and exploitation of the elderly convictions will be wiped from the public record.

Ed Magee, spokesman for St. Louis County Prosecuting Attorney Robert McCulloch, said it was a matter of getting restitution or jail time.

“It was either or,” Magee said by email. “I am sure the victim wanted the money.”

Had a weapon been involved, he said, there would have been a 10-year minimum sentence for first-degree robbery. In this case, forgery and exploitation of the elderly didn’t have minimum sentences.
He said Smith, who lost her job, had no prior convictions.

“Her record will be clear after five years but will always be available to law enforcement and can be used in any future prosecution if needed,” Magee said.

In an interview, Smith took drags from a cigarette as she sat on her front porch, which had a large U.S. flag tacked up from Labor Day.

“It was stupid, really stupid, and I am paying for it,” said Smith, one of her six grown children sitting beside her.

Smith said she left studies in speech therapy years ago to raise a family. They lived in a Glasgow Village home that she stays in now.

She said she went to work at the bank in 1992 to help pay for private school for her children. First she was a teller, then a teller supervisor. She was a financial services rep when she got into trouble in 2013.

She said she didn’t know why she stole from Podolski.

“I just always figured I’d put it back, but it didn’t happen,” she said, though she said she paid back the money after being arrested.

An official from Regions Bank, based in Birmingham, Ala., was apologetic and said the case in Florissant spawned companywide changes. Those include security alerts and internal reviews whenever associates process transactions on inactive accounts.

“There is nothing we value more than the trust of our customers, and, unfortunately, in this case, one of our former associates violated both the trust of her customer and the trust we had in her as well,” bank spokesman Jeremy King said by email.

He said Regions Bank checked to see if other clients were targeted. “Thankfully, no additional cases were found.”

Smith didn’t want to comment about what the bank could do to decrease the risk of forgery.

But, she said, with the availability of online banking services by computer and cellphone, there’s no reason not to check your balances most days.

“Everybody should,” she said.

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At 85 he foiled a financial scam; other seniors aren't so lucky

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