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FBI Alerts Public to Growing Elder Fraud Epidemic as Billions in Savings are Stolen Annually

Washington — Elderly Americans are becoming increasingly susceptible to online and phone scams, resulting in billions of dollars in losses each year. Federal investigators are warning that scammers are evolving their tactics to deceive victims into handing over large sums of money. According to a recent AARP study, approximately $28.3 billion is lost to elder fraud scams annually. Out of that amount, 72% (over $20 billion) is taken by individuals known to the victims, such as family members, friends, or advisors. Many of these scams go unreported, prompting the FBI to urge individuals who encounter suspicious activity online to disengage and report it to law enforcement.

One victim, Rich Brune, a 75-year-old retiree from Virginia, fell for an online scam that cost him nearly $800,000. Scammers posing as Microsoft workers contacted him and claimed that his computer had been hacked and his financial accounts compromised. Over a five-month period, Brune was instructed to transfer most of his life savings into a cryptocurrency account that the scammers assured him was secure. However, they were actually stealing his money. After the funds disappeared, Brune was informed by the Internal Revenue Service that he owed approximately $200,000 in taxes because the stolen money had been withdrawn from his retirement accounts.

Brune stated that he will likely have to take out a reverse mortgage and will essentially be left penniless after paying off the IRS. The IRS cannot provide specific comments on individual taxpayer situations due to privacy laws but emphasized its ongoing efforts to warn taxpayers about scams. However, the federal tax code currently does not offer exceptions for individuals like Brune who unwittingly withdraw retirement funds as part of a scam.

Rebecca Keithly, a supervisory special agent in the FBI’s economic crimes unit, highlighted that older adults are losing the most money to scams. Last year, there was a 350% increase in cryptocurrency-related investment scams targeting older adults, marking the highest increase among all age demographics and scam types.

The FBI interviewed Brune regarding the fraud, and he sought assistance from his local congressman, Rep. Don Beyer of Virginia. Microsoft confirmed that the scammer who contacted Brune and posed as a Microsoft employee had no association with the company or its customer support team. Microsoft stated that it would never proactively contact individuals to request personal or financial information or provide unsolicited technical support. They emphasized that any communication must be initiated by the customer.

While Brune’s story is troubling, it is not unique to investigators who work on prosecuting elder fraud scammers and educating the public about online dangers. Known as “Phantom Hacker scams,” these scams begin with a tech support scam, where perpetrators inform victims that their accounts are at risk of being hacked. Next, an individual posing as a representative from a financial institution convinces the victim that their accounts have been hacked. This prompts the victims to transfer their money into separate “safe” accounts, which the scammers then drain, leaving the victims broke. The FBI warns the public to avoid unsolicited pop-ups, text messages, and emails, as well as downloading unknown software or granting remote access to personal computers.

Elder fraud schemes often originate from call centers in India and South Asia, requiring collaboration with international law enforcement agencies. In 2022, Indian officials conducted multiple raids on call centers and arrested individuals involved in elder fraud scams with the assistance of US investigators.

Amy Nofzinger, AARP director of fraud victim support, advises seniors to recognize that calls or texts requesting Social Security and Medicare numbers are always scams. Nofzinger recommends stopping and immediately contacting a trusted individual for help. AARP provides hundreds of volunteers who work with victims of elder fraud.

Reported crime rates targeting older Americans and the elderly have increased by 84% in 2022 compared to 2021, according to federal data. Investigators urge individuals to be cautious of unsolicited pop-ups, text messages, and emails, and to refrain from downloading unknown software or allowing remote access to their computers. The FBI emphasizes that the US government will never ask individuals to transfer money to a government-run account or a cryptocurrency exchange. Any requests to do so may indicate an attempted scam.

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