Cyber Matters: Elder Fraud and Protecting Our Loved Ones from Phone, Mail, and In-Person Scams

Episode 17 September 21, 2023 00:31:08
Cyber Matters: Elder Fraud and Protecting Our Loved Ones from Phone, Mail, and In-Person Scams
Kassouf Podcast Network
Cyber Matters: Elder Fraud and Protecting Our Loved Ones from Phone, Mail, and In-Person Scams

Sep 21 2023 | 00:31:08

/

Hosted By

Tara Arrington

Show Notes

This is Cyber Matters, part of the Kassouf Podcast Network, with host Russ Dorsey, Principal and Chief Information Officer at Kassouf. Cyber Matters discusses issues that truly matter - to us, our clients, their families, and their businesses. 

In this episode, we welcome Lynn Shobe, retired Senior Special Agent with the Alabama State Bureau of Investigation. We talk about phone, mail, and in-person financial fraud, and why criminals still use these "old school" methods. 

Lynn, a Certified Fraud Examiner and Certified Financial Crime Investigator, has spent over half of his 40+ year career focusing on financial crime and fraud investigation. His focus on financial fraud has led him to a deep understanding of both the criminal and victim mindsets. 

In the first part of this two-part series, we discuss the characteristics of scams and some of the tactics used. We talk about victims’ mindsets, and why so many people, especially the elderly, are fooled into handing over thousands of dollars, sometimes repeatedly. 

You can reach Lynn through his LinkedIn https://www.linkedin.com/in/lynn-shobe-cfe-cfci-71b89017/. 

According to the FBI IC3 report on Elder Fraud, criminals stole over $3 billion from our nation’s elderly in 2022 alone, costing the average victim $35,000. https://www.ic3.gov/Media/PDF/AnnualReport/2022_IC3ElderFraudReport.pdf. 

If you or someone you know has been a victim of elder fraud, involve local law enforcement immediately. In cases of significant monetary losses, ask your local law enforcement to involve the FBI immediately. 

And contact the National Elder Fraud Hotline: 833–FRAUD–11 or 833–372–8311. https://ovc.ojp.gov/program/stop-elder-fraud/providing-help-restoring-hope. 

 

View Full Transcript

Episode Transcript

[00:00:05] Speaker A: Hello, and welcome to another episode of Cyber Matters. Powered by the Kasuf Podcast Network. I'm your host, Russ Dorsey. I'm a principal and CIO at KSOF and Company here in Birmingham. And with this podcast, we talk about the cyber that matters to us and our clients and their families businesses. It's maybe less technical and more about how this technology benefits us and how we can make the most out of it, how businesses are using it, but also very much how we have to protect ourselves in this modern world with everything as fast changing as it is. I'm very excited today to have a guest, Lynn Schobe. I'm going to bring you on camera here. Lynn is currently with the Jefferson State Police. [00:00:48] Speaker B: Jefferson State Community College. [00:00:49] Speaker A: Jefferson State Community College Police. Today we're going to be talking about financial fraud and Scams specifically more the email and phone and in person type. And we'd say, well, why is that on a cyber show? Well, A, it needs to be done because this is still a huge problem. It's a huge problem affecting our families and our parents and aunts and uncles. But also there's a cyber component behind this because before they define the victim, they're still doing all of that, calling on the back end of social media and all of this data mining to find these targets. So that's kind of how we're getting it into our scope today of talking. But I think this is going to be a really nice departure into something or an important departure into something that we all need to be aware of. And that is one of the comments we made about if we're saying things over and over and over again, it's because the problem hasn't gone away, right? I mean, it continues to be a multi billion dollar a year problem. But your career into financial fraud investigation, I've got it written down over here, so I'll get it right. But you're a certified fraud examiner and also certified financial crime investigator. And just to quickly go through your career, starting about the time I know you were in the army, right? [00:02:05] Speaker B: Actually started before that. Last month, I hit my 49th anniversary in public law enforcement. I did eight years in local law enforcement in Tennessee and then five and a half in the army. At the end of that time frame, I was teaching at the Army Military Police School and was the chief of the Economic and Computer Crime Branch at the MP School when I met some people from the Treasury Department. And one day they called and said they want to recruit me away from the army. And so in 1987, I left active duty and went to work for the Treasury Department, initially for what was known as the IRS Inspection Service. And then in 1999, Congress moved that to Maine Treasury under the new name treasury Inspector General for Tax Administration. And that's where I was until retired from there in 2008 and then went to work for the state and retired as a senior special agent from the State Bureau of Investigation in 2019 when I joined the college system. [00:03:06] Speaker A: You keep using this word retired as if you're not working anymore. [00:03:11] Speaker B: But no, I'm blessed to be able to. I'm drawing three retirements and just doing this because I want to. [00:03:18] Speaker A: That is a great place to be. But working with the college system where you are now, you were telling me that you're doing, like, special projects, you get farmed out. For instance, you're at Marion Military Institute. You're helping stand up. [00:03:30] Speaker B: That's right. One of my responsibilities, to help stand up. Over the last two years, we've stood up eight new police departments in the two year college system. And so this is the third time I've been farmed out to be the interim chief of police at a different college while we're getting the infrastructure in place. [00:03:46] Speaker A: Yeah, that's paying it forward. And I can't thank you enough for your service in all these public sectors. It's very humbling to be here because I'm just a pedestrian civilian who's worked in the private sector, but to have that much impact and thank you for that. But along the way, you got really deep into financial crime investigation, but also the fraud aspect. You were telling me there's about a 1520 year stint there where you're really focused on that and that you continue to stay involved in that. And I've heard you speak through Infreguard, which is, I think, where we met, and you were on a couple of our financial fraud, the things we did through COVID to survive, where we're doing all this broadcasting. But what I liked about yours was one of them we really got into the psychology of the criminal mind, but also how you get into investigating and talking to people through that investigatory process when you're, I guess, is interrogating the right word or just yeah, if you're. [00:04:51] Speaker B: Talking to the bad guy. One of the things that just because of the nature of the work and where the bad guys were located, which was, in my situation, rarely in Alabama, my focus was mostly on the victim end. And so had a lot of opportunity to work with victims of financial fraud and learned a lot more about the victimology side of the house as opposed to working with the bad guys. Most of the time, the bad guys were somewhere else, and I was feeding information about the particular victim back to the case agents in another jurisdiction. [00:05:27] Speaker A: Yeah, the other aspect of that, I think, the next year you came back was then you were talking specifically about the elders fraud aspect of this, the phone and the postal mail scams. I mean, good old snail mail still very effective. So we're going to today talk in, I hope, of both areas. But in this first segment, I think if we look around what's common about scams. And again, I'll say on the onset, I'm blessed still that my parents are both very sharp. I talk about this to them as often as I can, and they pretty much shut me down that they're watching the show, they know about the stuff, about the time I get it out of my mouth. And my mom is very skeptical, of course. She's blaming my father for being the one that's going to get on the computer, but I'm still blessed to have pretty good conversations with them. But anybody can fall victim to this. There are several kinds of scams I want us to get into. There's the short term where they're casting the wide net, but then there are the ones where they really get their teeth into somebody and go for what I call the long con. I think pig butchering and these other terms are what's being used for that. But what do you find if we're getting this out to people, what do you find to be the common or most effective scams? I know there's going to be some general questions, but what do you see as the most common threat right now and what are you seeing? [00:07:00] Speaker B: Well, the one thing I want to remind everybody of is that a couple of my phrases I use over and over is never say never. And that what is old is new again. Because back in the day, probably all the scams were face to face. And then with the advent of the telephone or the mail, then people began to cheat people through the mail. And then with the advent of the telephone, with the different technology, and with the advent of computers and the internet. So if you get in the mindset that I will never be scammed in person because all scams are now on the internet, well, that's not the way that works either, or that scams no longer occur on the telephone. So every time you think you're dealing with a different level, then always remember that they're going to double back and use the more common things. So there are going to be some face to face things. One of the biggest indicators of a scam is there's going to be an overwhelming sense of urgency. Whatever it is that they want done, it must be done right now. If it's an investment opportunity, it must be done right now. If you're about to win a sweepstakes or a lottery, it must be done right now. If you want to avoid going to jail or running afoul of some sort of a criminal investigation, it must be done right now. You've got to go right now and get the money and transmit it in whatever fashion that they say. And even that goes back to whatever is new. Sometimes they would ask for currency, sometimes for cashier's checks, sometimes now they're very common that they will have the individual to go to where we would call an ATM for cryptocurrency and buy the cryptocurrency. And then, of course, the other individual has all the information. The bad guy has the information as to how to get the proceeds. How the money is transferred is going to go back and forth in terms of old ways, new ways, and whatever. But there's always going to be that overwhelming sense of urgency. Whatever it is, it's got to be done right now. If it's about an opportunity, another big indicator is going to be that it sounds too good to be true. So anything that sounds too good to be true probably is. So those are going to be two very big indicators. [00:09:37] Speaker A: And when you talk about in person, there's still caregivers, people that might have power of attorney for whatever reason. I know there's people that manage what the court appointed caregivers that are managing people while they're in retirement homes or whatever. What's the term I'm looking for for that? [00:09:57] Speaker B: Conservators. [00:09:57] Speaker A: Conservators. Thank you. So however the connection happens, be it technology, the phone, the mail, or this in person need to have this person in my life or in my parents life or whatever, then you've got this. Everything else, like you said, just becomes the old same old tricks. They're just finding a new way to deliver them. The things you see again in the cyber world. We look at again what we call the wide net, the phishing attacks versus the spear. I think coming out of India, the warranty scams where they're just calling up to say, hey, we're here to renew your Maytag warranty on your washer, and they're hoping to make a quick $200 and move on. Do you see more of that, or do you see I guess with what you're doing, you get involved, I guess when there's already been a criminal complaint, maybe somebody calls you in to consult. So you're seeing the ones that have turned into 50,000 $100,000 losses where they've really gotten into somebody's savings. So you see more of that. [00:11:04] Speaker B: I have seen a lot of that, as a matter of fact. So much so that I've sat in the homes of victims where something was reported to us that fell within the purview of my agency, only to find that the victim that I'm talking to has been victimized over and over and over and over with variations of other scams that would have not fallen in our purview. I'm just now getting there. I'm just now finding out about that. But they've lost tens of thousands of dollars over a period of time. And it has gotten so bad that on multiple occasions, while I'm sitting in the home of the victim trying to conduct an interview, the bad guys are calling while I'm sitting there interrupting my ability to conduct an interview because they're being scammed over and over and over. And one gentleman in particular called us up one day, and it was the first time they'd ever mentioned anything about the IRS as part of the scheme. And he thought that OD. So he called the actual IRS. They call me, I go out and I'm sitting talking with the man, and turns out that the call that he got that he called us about was the third he had gotten that day alone. And after he called us, he got two more and he sent money to the other two. And by the time I could get there on the same day, that was at least five different fraud schemes that he was being attacked by just in one day. And this has been going on for months. And he'd lost some untold amount of. [00:12:44] Speaker A: Money as far as our over 55, which we both are. I remember when I started getting the ARP cards a few years back. That was a good feeling. That puts us also on list because those are readily available list. And also the other thing, and I don't have the numbers, but our retired population holds the most wealth, obviously because of where they're at in life. So we're talking about individuals that even if they've had a pretty humble life, they worked at maybe a factory or maybe worked in a midland, they've still had hundreds of $1,000 in the bank because they've been able to save up over time. And this is their retirement. That's more money than a lot of small businesses have in their bank accounts week to week. But what is the psychology behind I guess we talk about the criminals. We know what motivates them and that they're obviously adept to this. But when we think about our parents this is a smart generation. I said before, this is a generation that won a couple of world war. They won a couple of at least one world war, got to the moon on slide rules. These are not people that you would think would just at this point in their life. But is it the trust factor? I know there's diminished capacity comes to play, but I think the trust factor because they will answer. They'll answer the phone. I refuse to answer the phone at home. My wife is to that point now she's got to know who's calling, even if it's to tell the guy off. She'll engage just to tell the guy to go pound sand and feel some gratification. I'm like, you shouldn't have even given him that moment with you. [00:14:24] Speaker B: Yeah, actually, if you answer the phone at all, it's probably an indicator that that's actually a working telephone and somebody might answer. And in some of the schemes, no matter, it's going to start as one thing and then if they feel confident that they've got you on the hook, then they're going to continue. And for a long time there, I can pretty much write the script. That is what's going to happen. The first set of calls are going to sound like this and then it's, oh well, something else has come up and now you need to send more money. And once you do that, well something else has come up. You got to send more money. And then ultimately it would switch off. And really the same set of bad guys, but not known to you that it's. The same set of bad guys are now going to call in what we call the recovery room schemes. And they're going to claim to be some sort of law enforcement entity or government agencies that's investigating the fact that you have been scammed and that sometimes they'll even tell you that we can see here that you sent money to so and so. And they'll know the dollar amounts and so that will bolster the confidence of the victim because this person knows so surely they are a real law enforcement entity. I've had them call, say they were from the Nevada State Attorney General's office, and they'd executed a search warrant on a telemarketing operation there. And they could see where he had sent money and they had recovered the supposed winnings and that they were going to get those out to him, but then immediately would turn back into so all you need to do now is send this amount of money to us. And it was always about more money, more money, more money. Even though they claimed to be somebody completely different investigating the bad guys. I've had them claim to be attorneys. They were filing class action lawsuits against a corrupt telemarketing organization and they were going to get you three times your money back, but you had to send legal fees. And then when we talk about the victims on the front end, like a little bit of diminished capacity. I had a coworker one time and that would sometimes talk about what people were saying. And so I said, well, did you have confidence in what they said? Well, yes. So where do you think the word con man came from? That's exactly what it is. So if they got a good enough spiel and you have confidence in what they're telling you and then they get you talked into doing it for whatever reason. And sometimes it's going to be about winnings, sometimes it's to avoid negative consequences, whatever it is, if they can talk a good game, get you started, then they're going to continue doing that. If you're victimized, we talked about the victimology thing for a moment. First of all, you're going to be in denial. You don't really want to admit that you've just been taken. And then it kind of turn into other things and you're going to hide the fact probably from other family members. A lot of older citizens are concerned about losing their independence, don't want their kids involved in their business. And so they'll kind of hide the fact that that's happened. And then I've seen it turn into almost like a gambling addiction. They've lost money regularly to multiple schemes, and the next one will call, and their mentality is, I've only got to hit once and then I'll stop. I can't tell you the number of victims I've worked with where that's the point that they've gotten to. If I just recoup all the money I've lost across the board with one of these and then I'll stop, and that's never going to happen. I've also had them get to the point where the same gentleman that I was telling you about, that we had five schemes on the same day, and he'd been cheated out of a lot of money over a period of several months. After we would work with him actually even had wired up, he would participate in the investigations. We recorded telephone conversations from his home with the bad guys. So he was heavily involved in the investigative process. And then he would call us up on the phone, hey, I just got a telephone call from an attorney in San Francisco. He's going to file this class action lawsuit against these corrupt telemarketers, going to give me three times my money back. But he said I got to send him $500 in legal fees. And then he would say, I'm giving you 1 hour to prove it's a scammer. I'm sending the money. I mean, almost angry at us. That's how I've seen them go from being taken, being in denial, then getting desperate enough that they will continue doing that, to only have to hit once, to actually being almost angry at the investigators. [00:19:20] Speaker A: There's an indignation over what's happened to them and that they're now. And I think that's something we all can get to that stage where now I'm aware of, but then you're just as susceptible to the next. We either victims ourselves because we're not being aware of things, which is the nature of life, or somebody we care about. So I'm going to assume that I'm smart enough to maybe protect myself. So what do I need to be looking for, for the people that I care about to be able to tell them? What would you tell me, say, Rush, you're not that smart. [00:19:57] Speaker B: Starting off first, we're talking about how the individuals can kind of protect themselves. It doesn't really matter if it's in person contact, because this may be like businesses like home repair, scams, things like that. People will approach you. Or it could be like an impersonation from a bank. We'll call it the bank examiner scam or pigeon drops, where somebody approach you in the parking lot, say, we found this money and we're going to be able to share in this money. But then in order for good faith, they'll say, okay, you need to put up money. In the meantime, the other two people in this thing are part of the scheme, and you're just the person that might get duped into doing that. And to show you how that can work, I had a good friend that was a police officer that was taken for $11,000 in one of those where he went to the bank and got money out, thinking that he was going to be able to partake in this other found money type situation. And through sleight of hand, whatever they gave him back was nothing more than newspaper clippings. [00:21:00] Speaker A: As a rule, there. I think it's pretty safe to say there's nothing that's going to come to you out of the universe that you should put money into expecting a return out of. Now if you go find an opportunity and you find it that way, you still got to be careful. [00:21:17] Speaker B: So depending on how again, if it's an in person thing, I caution people not to do business with anybody where they didn't initiate the contact. Somebody comes up to your house and say hey, we want to seal your driveway and you didn't call them, I'd be very skeptical about that and want to do business with those people. They just show up and want to fix your roof or clean your chimney or those kind of things. A lot of scams involved there where they want the money up front and not do the work or substandard work or even if it's on the telephone and it's some sort of an opportunity, be very skeptical about anything you did not initiate. Don't give them any of your identifying information. And one of the things that they're real big on now is they will automatically ask for a secondary method of contact, such as if they called your house, they now want your cell phone number. And then anytime somebody asks you to go to financial institution, withdraw money for any reason, and want you to stay on the line with them the whole time. Got an open line in the cell phone from the time you leave home, the time you go to the bank. They want the phone laid on the counter while you're talking to the teller. You get the money the whole way back home, a huge red flag. And so don't give them your secondary contact information and certainly don't go anywhere when somebody is asking you to keep them on an open line on the telephone. That can't be good. [00:22:45] Speaker A: Yeah, that falls back to that sense of urgency where it's got to be done right, which we already mentioned is. [00:22:50] Speaker B: Bigger and that way they can tell that you're actually doing it. I know back some of the cases that I'd worked, they would insist that you call FedEx and have FedEx come by the house and pick up the money that you're supposed to send them. And then the way they would follow up with you is they want you to give them the FedEx tracking numbers so they would know for a fact that you had done what it is that they're wanting to so. And it would be true if it was they want the overwhelming sense of urgency and don't deal with anybody that you didn't initiate the contact. [00:23:33] Speaker A: We can't just turn off our phones. I was hoping you say just turn off your phones, don't answer the door and life will be good. But they're going to find a way to get to you. [00:23:42] Speaker B: One way or the other they will. Even if you think you're savvy enough and you have a caller ID and you look at the caller ID and it looks like a residence local number and you answer it. And even if it's a legitimate company and I won't call company names but companies I do business with, I get a call from like somebody's house in the same town that I live in and when they answer it, it's a sales pitch from a company I do business with. And I'm going to have to assume for a moment that it was legitimately that company. But why is it showing up on my caller ID the way it does? The other thing is caller ID spoofing is so prevalent that they can actually make it show up if they want to say that there's warrant for your arrest for missing jury duty and you have to pay money now because of that because otherwise you're going to be arrested, which is a very common thing right now. It may actually show up on your caller ID that the call is coming from the sheriff's office by phone number and by name right on your caller ID or from a government agency it'll have the name of that government agency on. So if you're savvy enough to think you're screening those when I talk about impersonation investigations to law enforcement groups and when I teach in the police academy, the one thing I tell them is no particularly law enforcement officer is going to get the terminology wrong about his or her own agency. Everybody else might. News media is notorious for butchering the names of a government agency but that individual will not. So like a few months ago I get a phone call on my own personal cell phone and the person with a foreign accent starts the conversation. I'm from the Department of the Social Security Administration. It doesn't matter what he says after that. There is no such thing as the Department of the Social Security Administration. Just plain old Social Security administration. And at that moment that's an indicator know hang can't you get the terminology right? [00:25:39] Speaker A: Yeah. I think that's always a good tip we give our clients. The IRS is going to send you a registered letter or if you've gone far enough along with them and you're already in the process and they're just going to come to your door. Social Security is going to send you by mail. I don't know of any legitimate contact that happens by phone. The police will call if and we have had phone calls before. The FBI will call you if there's an ongoing situation and they're calling to alert you about something, but they're never going to ask for anything in return. They're not going to ask you to go. [00:26:15] Speaker B: That's right. [00:26:16] Speaker A: If it's a just for it to be admissible, they can't call you on the phone and say, hey, we got this criminal complaint on you. You got to go get money right now. [00:26:26] Speaker B: Right. They're not going to do that's. [00:26:27] Speaker A: Not how they're going to engage a warrant. Right. [00:26:29] Speaker B: Yeah. For a small crime, a police department might call you and say, I just won't let you know there is a warrant has been issued, something you may want to take care of, but there will never be a day that they're going to call and say, we're on our way to your house to execute a warrant. And the only way you can avoid that, no law enforcement agency is going to do it. 49 years, I've never heard of such a thing. That just does not happen. But people will be scared that that's going to happen. Now, occasionally they'll call the house of someone that's in law enforcement that wants to play along with them and they'll say, come on, but obviously there's nobody coming. But they'll want you to go out and buy green dot cards or itunes cards or something like that just to satisfy the thing. Right. [00:27:16] Speaker A: And then I think the other thing would be to involve if you're concerned about it, I do want to talk about how to engage law enforcement in the next segment. But relying on family is important just to say, hey, I've got this going on. And this kind of comes around to something is happening right now that we've heard about. They're calling it the kidnapping scams but it's also, hey grandma, I'm stranded in Florida at spring break. Scam that's right. Which they're using AI now to generate voices with some success. And the families, you almost have to prepare for that and know mom or dad or my know we're going to have a safe word or we're going to have a process for if you ever are in trouble. And I've had this conversation with my kids. If you ever are in trouble, here's the thing. We're going to agree in advance that we're going to do about getting you to a safe place and just have that conversation so that somebody isn't because even and I think Darren Mott, when he was on here, was talking about that actually happened to his mother, and she called him and he said, no, the son's right here. But had he not answered the phone and she had not been able to get that confirmation in the moment, she might have fallen prey to that. So we have to have some conversation because as technology gets more insidiously used. [00:28:36] Speaker B: Oh, yeah, the thing about the voice generation, that is a really scary thing because not long ago my mother called me or called and. Talked to my wife and of course she's been scammed before. We've talked about that in the past. But she actually got a call that purported to be from my son. And fortunately he did not know how my mother was referred to it's like if hey grandma, this, that or the other. Well, that's not the way she knew that she was mima. Okay. So she was able to pick up on the fact that they didn't quite have that part down. But these family member in distress like grandparents, cams, that's a very real thing. And people will send money because the caller will be like, hey Grandma, and grandma says, is that you, Timmy? Well, he didn't know to be Timmy yet, but now he does. He said yes. And then he says, okay, whatever you do, don't tell mom and dad. But here's what's going on. I've been involved in an accident or I'm in a jail in Mexico or whatever the case may be. And unfortunately, too many people send money in those kinds of things. [00:29:49] Speaker A: Yeah, they do. And I think the other thing is even we talked about the authority scams, but imagine you get a phone call from local politician or it's Nick Saban or it's somebody like that on the mean. I think this next election cycle you're going to see more use of AI to generate those kinds of things. But if there's a known voice in your area, somebody that's and people will fall prey to that. We're going to take kind of break here and reset and come back for our second segment. So let me get myself up here. Not that people want to see me, but it makes more sense. But we want to thank you for this part of the segment, Lynn, and your time. We'll be posting this and then follow up in a week or so with part two. So if you're listening now, I want you to come back for part two of this where we're going to talk a little bit more about the different types of fraud and maybe some more, I think, get a little bit deeper into some case studies. But also what to look for with your family and also what to do to engage law enforcement is what we'll get in the next segment. So for today, I'm Russ Dorsey, again your host of Cyber Matters, powered by the Kazoo Podcast Network. And we'll be back soon with part two.

Other Episodes

Episode 12

June 01, 2023 00:29:26
Episode Cover

ENCORE - Revenue Radio: Biologics

Kassouf Healthcare Solutions' Revenue Radio gives practice managers the tools you need to run a successful and profitable medical practice. Your host, Kassouf Healthcare...

Listen

Episode 1

May 26, 2022 00:14:41
Episode Cover

529 Day: How to maximize college savings and tax benefits

Kassouf Principal and Financial Planner Michelle Pike, CFP®, AEP® joins the Kassouf Podcast Network in honor of 529 Day, or National College Savings Day....

Listen

Episode 14

October 05, 2023 00:30:41
Episode Cover

Birmingham Medical News Podcast: Dr. Roger Smalligan of All of Us Research Program (NIH Sponsored)

For this episode, the Birmingham Medical News Podcast is coming to the Kassouf feed! We're excited to partner with BMN to help them produce...

Listen