Justice Department Announces Nationwide Elder Fraud Sweep Of More Than 250 Defendants

CHARLOTTE, N.C. – The Justice Department announced today the results of the largest coordinated sweep of elder fraud cases in history.   The cases involve more than 250 defendants from around the globe who victimized more than a million Americans, most of whom were elderly. 

According to the Justice Department’s announcement, the cases include criminal, civil, and forfeiture actions across more than 50 federal districts.  Of the defendants, 200 were charged criminally.  In each case, offenders engaged in financial schemes that targeted or largely affected seniors.  In total, the charged elder fraud schemes caused losses of more than half a billion dollars.  

In the Western District of North Carolina, combating the financial exploitation of the elderly is an important part of the U.S. Attorney’s Office broader emphasis on fraud targeting vulnerable populations. 

“Each year, millions of older Americans become victims of financial fraud.  The impact can be devastating both psychologically and financially.  As part of the U.S. Attorney’s Office’s commitment to protecting vulnerable populations, we are enhancing our efforts to educate the elderly about investment fraud schemes and consumer scams to protect them from financial exploitation.  We will also investigate and prosecute financial predators who unabashedly steal from older Americans causing irreparable financial harm,” said U.S. Attorney R. Andrew Murray.

“The Justice Department and its partners are taking unprecedented, coordinated action to protect elderly Americans from financial threats, both foreign and domestic,” said Attorney General Sessions.  “Today’s actions send a clear message:  we will hold perpetrators of elder fraud schemes accountable wherever they are.  When criminals steal the hard-earned life savings of older Americans, we will respond with all the tools at the Department’s disposal – criminal prosecutions to punish offenders, civil injunctions to shut the schemes down, and asset forfeiture to take back ill-gotten gains.  Today is only the beginning.  I have directed Department prosecutors to coordinate with both domestic law enforcement partners and foreign counterparts to stop these criminals from exploiting our seniors.”

The actions announced today charged a variety of fraud schemes, ranging from mass mailing, telemarketing and investment frauds to individual incidences of identity theft and theft by guardians.  A number of cases involved transnational criminal organizations that defrauded hundreds of thousands of elderly victims, while others involved a single relative or fiduciary who took advantage of an individual victim.  The schemes charged in these cases caused losses to more than a million victims.

Federal Prosecutions by the U.S. Attorney’s Office

Alan Peter Darcy, 80, of Murphy, N.C., was sentenced on Thursday, February 15, 2018, to 108 months in prison on wire fraud charges, in connection with an investment fraud scheme that defrauded multiple victims, some of whom were elderly, of more than $800,000.  In addition to the prison term, Darcy was ordered to serve three years under court supervision and to pay restitution in the amount of $740,028.43.  According to court records and the sentencing hearing, between February 2012 to June 2016, Darcy carried out the fraud scheme by inducing his victims to invest in a variety of bogus financial instruments and products.  Darcy did so by claiming that he had access to, and multiple successes with, specialized opportunities for obtaining private banking instruments and engaging in lucrative trading opportunities not available to the general public.

Court documents state that Darcy also induced victims to part with their money by lying about how the victims’ money would be used or invested, and about when and how Darcy and his businesses would be compensated.  Instead of holding the victims’ money in escrow or in trust accounts for the victims as he had promised, Darcy deposited the money into bank accounts he controlled and spent more than $400,000 of the victims’ money to fund his personal lifestyle, including personal expenditures such as entertainment, travel and the purchase of a used Jaguar automobile. 

Public Education

“Education is an important component of our efforts to protect our seniors from suffering financial devastation in the hands scammers.  Knowing about the different types of financial investment schemes, what to look out for, what questions to ask, and what to do if contacted by fraudsters is key to avoid getting ripped off by unscrupulous individuals trying to gain access to older Americans’ nest eggs.”

In making today’s announcement, U.S. Attorney Murray cautioned all Americans to look out for scams targeting the elderly, including:

• “Lottery phone scams,” in which callers convince seniors that a large fee or taxes must be paid before one can receive lottery winnings;
• “Grandparent scams,” which convince seniors that their grandchildren have been arrested and need bail money;
• “Romance scams,” which lull victims to believe that their online paramour needs funds for a U.S. visit or some other purpose;
• “IRS imposter schemes,” which defraud victims by posing as IRS agents and claiming that victims owe back taxes;
• “Guardianship schemes,” which siphon seniors’ financial resources into the bank accounts of deceitful relatives or guardians.

The U.S. Attorney’s Office has conducted educational seminars for elderly investors on avoiding investment fraud schemes and safeguarding savings from potential fraudsters. 

The seminars cover a broad range of topics, including the most common types of investment fraud scams targeting the elderly, red flags to watch out if approached by someone touting an investment opportunity, tips on how to avoid becoming the victim of an investment scheme, and who to contact to report a suspicious investment offer or if you have been the victim of an investment scam.

Elder fraud complaints may be filed with the FTC at www.ftccomplaintassistant.gov or at 877-FTC-HELP.  The Department of Justice provides a variety of resources relating to elder fraud victimization through its Office of Victims of Crime, which can be reached at www.ovc.gov.