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The Truth About Frauds and Scams

Last update on: May 29 2020

The Wall Street Journal had a good series of articles recently about financial frauds and particularly how the elderly are targets for them. (Subscription might be required for some or all of these articles.) This article explains the extent to which the elderly are the targets of most frauds and make up most of the victims. This article explains two widespread scams directed at the elderly: work-at-home frauds and gold-related scams.

The most important article is about why so few frauds are prosecuted. Law enforcement has limited resources, and frauds don’t receive top priority. In fact, it appears that law enforcement at most levels won’t even investigate unless the fraud triggers some minimum dollar thresholds. The story says that a loss won’t be investigated by the FBI unless an individual’s loss exceeds $100,000, among other thresholds, though the amounts vary around the country. That’s why a number of con artists aren’t even afraid to commit their scams.

For example, there’s a group in Oregon (that uses a Henderson, Nevada mailing address) that calls itself Associated Publishers Network and Publishers Exchange, among other names. It obtains mailing lists of publications using false pretenses and then sends phony renewal notices to the subscribers. It claims to be a third party that is authorized to collect renewals on behalf of the publishers. But this is false. It simply pockets the money and doesn’t forward any of it or the subscription information to the publishers. Because the individual losses are small, law enforcement doesn’t do anything despite numerous complaints. The perpetrators of this scheme live well and operate openly on the fruits of their scams.

The FBI declined to comment on that case, but federal officials confirmed that federal agencies set guidelines about the size of cases they investigate. Amounts depend on the region and are typically set by the U.S. attorneys who prosecute the cases. FBI officials say $100,000 for an individual loss, and $1 million for an overall fraud, are typical limits, although cases involving smaller amounts may be pursued if there are special circumstances.

The FBI declined to provide statistics on the percentage of fraud cases that lead to arrests and said none of its headquarters officials were available to discuss the question.

The guidelines’ purpose is to focus efforts on crimes affecting the largest numbers of people and the largest amounts of money. That can be frustrating for the many victims who can’t find anyone to investigate their crimes. Local authorities also often decline to investigate because of high costs and because the perpetrator may not be locally based.

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