FBI
A Hays man was arrested last week on fraud charges after an FBI search of his Hays home on June 26.
Last week, FBI agents arrested two men who allegedly targeted elderly individuals in a telemarketing scheme by purporting to represent companies who provided advertising and other services to current or former timeshare owners.
Michael Farole, 44, of West Los Angeles, and Christopher Lang, 42, a resident of Hays, were charged this week in a criminal complaint filed in U.S. District Court in Los Angeles with conspiracy to commit wire fraud. The defendants allegedly convinced victims to pay advance fees in return for services that involved selling or securing the sale or rental of their timeshares.
Hays Police Chief Don Scheibler said Hays police officers provided a support role in the FBI search of Lang's home on June 26.
After the victims paid initial fees for services that were never provided, Farole and Lang continued to contact the victims by phone, text and email in attempts to obtain additional fees.
The investigation revealed at least 370 elderly individuals lost over $4.5 million as a result of the fraud. The victims used funds from their social security income, investment and retirement accounts, as well as their savings, to pay the fraudulent companies.
Despite the recurring fees that each victim paid, often reaching the hundreds of thousands over several years, none received the timeshare-related services or proceeds promised.
Evidence obtained throughout the investigation indicates that the subjects used the proceeds from their scheme to enrich themselves and to pay for personal expenses and luxury items. Farole was ordered detained at his initial court appearance; Lang has a detention hearing set for next week.
The investigation of Farole and Lang is being conducted by the FBI’s Los Angeles Field Office, which received assistance from the FBI’s Kansas City Field Office. The case is being prosecuted by the United States Attorney’s Office in Los Angeles.
A criminal complaint contains allegations. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
FBI tries to increase fraud awareness
The FBI’s Los Angeles Field Office is raising public awareness about elder fraud schemes, which have increased in recent years, and is announcing charges against two men who were arrested June 28, 2023, for allegedly targeting elderly victims.
In 2022, adults over the age 60 reported 88,262 complaints to the FBI’s Internet Crime Complaint Center, with a total loss of $3.1 billion. This represents an 84% increase in losses as compared to losses reported in 2021. The average loss per victim was more than $35,000, and more than 5,000 victims lost over $100,000. California leads the nation in the number of elderly victims of fraud, and the collective amount of reported losses incurred in California was $624,509,520 in 2022.
Elder fraud is a form of older adult exploitation where a perpetrator misuses or steals financial assets, savings, income, or personal identifying information from an adult over the age 60, often without their direct knowledge or consent. Fraudsters often use deception to scam older adults by posing as a person in a position of trust (such as a government official) by claiming to have a romantic interest in the victim or by posing as a shrewd investor promising a financial payout.
In 2022, the FBI’s Internet Crime Complaint Center received almost 10,000 complaints from victims over the age of 60 involving the use of some type of cryptocurrency, such as Bitcoin, Ethereum, Litecoin, or Ripple. Losses incurred by these victims totaled over $1 billion. Cryptocurrency is becoming a preferred payment method for all types of scams.
Last year, William Webster, a former Director of the FBI and of the CIA, was a victim of elder fraud and worked with the FBI to make a public service announcement.
Recent arrests of those who allegedly targeted elderly victims
Additional Recent Cases Involving Allegations of Elder Fraud
- In April, a Burbank man, Jamal Nathan “Jimmy” Dawood, 52, was charged with allegedly embezzling $2.2 million in money and real estate from an elderly victim.
- In February, a Fresno hairstylist, Anthony David Flores, and an actress, Anna Rene Moore, were charged in an indictment for allegedly defrauding an elderly physician out of more than $2.7 million before his death and then attempting to defraud his estate out of an additional amount exceeding $20 million. Details can be found here: FloresMooreCharged
- In January, a former Orange County-based bank manager, Lana Pathos, 59, of Anaheim, pleaded guilty to a federal criminal charge of stealing $1.2 million in savings from elderly customers by using one the victims’ identities to fraudulently open a bank account, then impersonating the victim to transfer the stolen money to different bank accounts. Details can be found here: LanaPathosPlea
Common Elder Fraud Schemes
- Investment fraud: Examples of investment fraud include advance fee fraud, Ponzi schemes, pyramid schemes, and market manipulation fraud.
- Business email compromise/email account compromise: These sophisticated scams are carried out by fraudsters compromising email accounts through social engineering or computer intrusion techniques to conduct unauthorized transfer of funds.
- Confidence fraud/romance scams: An individual believes they are in a relationship and are tricked into sending money and/or personal and financial information to the perpetrator(s) or convinced to launder money to assist the perpetrator(s).
- Tech support fraud: Con artists posing as tech support agents use scare tactics to trick older adults into paying for unnecessary technical support services to fix non-existent technology issues or to renew fraudulent software or security subscriptions.
- Government impersonation: While government impersonation is not reported as often, millions of dollars are lost by the elderly to criminals impersonating government officials. The criminals often extort victims with threats of physical or financial harm to obtain personal information.
Tips to avoid victimization:
- Recognize scam attempts and end all communication with the perpetrator.
- Be cautious of unsolicited phone calls, mailings, and door-to-door services offers.
- Perpetrators create a sense of urgency to produce fear and lure victims into immediate action. Resist pressure to act quickly and call police if you feel you’re in danger.
- Protect your personal information and shred financial documents.
- Check your financial statements each month for suspicious activity.
- Ensure your computer’s anti-virus and security protections are up to date.
- Understand that con artists often pose as interested romantic partners online. Never send money to someone you don’t know personally.
- Always consult with a family member or friend you trust when in doubt.
You can also review the latest FBI report on elder fraud.
The FBI is committed to protecting our seniors. If you believe you are a victim of fraud or know a senior who may be—regardless of monetary loss—immediately report the incident to the FBI by calling 1-800-CALL-FBI or by submitting a tip to the Internet Crime Complaint Center at ic3.gov.