Expert tells how to spot, prevent financial exploitation of vulnerable adults

Whatcom County case a prime example

THE COLUMBIAN (VANCOUVER, WASH.)February 14, 2014 

When an elderly woman who had lived frugally for years to save $500,000 suddenly couldn't make her rent after giving her son power of attorney, Bellingham police called Vancouver forensics accountant Tiffany Couch to track down what happened to the money.

Couch, owner of Acuity Forensics in Vancouver, Wash., has built her company on solving fraud cases for law enforcement, businesses and individual clients. On Thursday, Feb.13 she gave advice about how to spot and prevent financial exploitation of vulnerable adults without her help.

"The numbers always tell the story," Couch said.

She mostly works for clients who want to uncover fraud in their companies, but she has had an increasing number of clients related to personal financial exploitation, including of vulnerable adults and in divorce cases.

A number of external pressures, including unemployment, debt and other economic tolls, may give people an incentive to commit fraud.

"We can't control the pressures," Couch said. "The only thing we can do is limit an opportunity to commit fraud."

Fraudsters often rationalize their behavior, she said.

Two months after getting power of attorney, Kenneth Dwayne Rogers -- the son of the elderly woman whose savings vanished -- spent about $30,000 of her money to pay off a loan and credit cards. He also admitted to using her money to buy a home in Lynden, buy a car, send his daughter to Lynden Christian Schools, make home improvements and purchase other items.

That type of fraud is known as asset misappropriation. About 67 percent of fraud is asset misappropriation, according to the Association of Certified Fraud Examiners.

Rogers, who earned a six-figure salary at his job, told police that he felt entitled to his mother's money because he would have inherited it after his mother's death, Couch said.

In fact, the elderly woman had been saving the money for the long-term care of her other son, who had a developmental disability, Couch said.

Rogers pleaded guilty to 10 counts of third-degree theft in summer 2011 in Whatcom County Superior Court. As part of his sentence, he was required to pay all the money back, Couch said.

"Fraud never happens from anybody you don't like. Never," she said. "Every fraud case I know has been perpetuated by the last person the vulnerable adult or business thought would do that to them."

Couch said she uncovered Rogers' fraud by looking at the elderly woman's spending habits before she gave her son power of attorney. The woman was so frugal that she didn't heat her house and subsided on inexpensive foods, such as Spam and macaroni and cheese. In the first month her son received power of attorney, her spending immediately skyrocketed by tens of thousands of dollars, Couch said.

Other behaviors that may characterize a fraudster include pushing others away, obsessing over maintaining control and spending beyond their means, she said.

To prevent fraud of a vulnerable adult, a third party who isn't the one with power of attorney should monitor the vulnerable adult's finances by looking at bank statements, canceled checks, receipts and bills.

The third party, who could be another relative or friend, should look to see whether the vulnerable adult's bills have gone up, identify all of the vulnerable adult's revenue sources and if possible, talk to the vulnerable adult about his or her habits, she said. Is the vulnerable adult paying for two cable bills instead of one? Does the vulnerable adult actually use a cellphone if there is a bill for one? Do doctor's appointments match the dates when a caregiver marks down travel or medication expenses?

"There are all kinds of ways people can get money from people who don't know any better," Couch said.

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