by Amritpal Kaur Sandhu-Longoria
Why would 76-year-old Larry Cook transfer over $3.6 million out of the country just before his death?
That
was tickling the mind of Janine Satterfield as she was mourning her
beloved uncle. A decorated veteran who served with the U.S. Navy as
commander for 24 years until 1992, he lived alone and had no children or
spouse.
Satterfield discovered this mystery
when she needed to find his Social Security number to bury her uncle. A
neighbor she asked to go into his home in Virginia for his documents
instead sent photos of international wire transfers he made in amounts
as large as $49,500, most of them to Thailand.
Through her uncle’s meticulous records,
Satterfield discovered he had become a victim of a scam that started in
October 2020 and continued until March 2021.
He died a month later.
After his death, his niece's looming thought: Why did the banks allow all of these large transfers to go through?
The lawsuit against Wells Fargo and Navy Federal Credit Union
Satterfield
filed a suit against Wells Fargo and the Navy Federal Credit Union,
claiming the institutions failed to protect her uncle from being
swindled out of $3.6 million.
Cook
made 75 international transfers to possible scammers abroad, and most of
the wires amounted to $49,500 each, according to the complaint filed in
Virginia. In total, he used Wells Fargo once to send $49,500 and the
Navy Federal Credit Union 74 times to send a total of $3,631,200.
According to the wire records, Cook wrote that the purpose of the
transfer was for a “loan repayment.”
According to the complaint, Cook’s credit union
reported him to adult protective services in mid-December but still
allowed 42 more international wires to process.
Satterfield
alleged in the complaint that both institutions acted in bad faith by
failing to investigate the suspicious wires and is suing both banks for
the money Cook lost in the scam – Wells Fargo for $49,500 and Navy
Federal Credit Union for $3,633,050, which includes $1,850 in wire
fees.
She also alleged Cook’s credit union was negligent for not stopping the
numerous wires and “undertook the duty” to protect him after the
voluntary report they made to Fairfax County Adult Protective Services
and should have taken internal steps to stop the wires. The credit union
continued processing the wires even after APS confirmed with them on
Jan. 28, 2021, that Cook needed services and was at risk of being
abused, neglected and exploited.
Though APS didn’t stop the wires, it asked the credit union to continue to monitor his accounts.
Cook
had suffered a stroke in 2019, according to the complaint, and when he
was discharged from rehabilitation, the staff there noted Cook had “poor
insight into his condition, lacked insight into his deficits,” and was
concerned about going back to work as a consultant for the Navy and
being cleared to drive. He had no family support.
Representatives
for Wells Fargo and the Navy Federal Credit Union did not comment
because of the pending litigation, but both gave USA TODAY prepared
statements.
“Our members are always our first
priority and we handle all member transactions with great care,” a Navy
Federal Credit Union spokesperson said.
“Wells
Fargo takes financial exploitation very seriously. We are committed to
helping our customers avoid fraud and scams through various resources,
including ongoing education efforts,” a Wells Fargo spokesperson said.
Court documents show the family's lawsuit was dismissed just this Monday.
According
to the APS reports presented to the court, Navy Federal Credit Union
warned Cook numerous times that he was a victim of a scam, but Cook
still wanted to continue with the wires. The APS reports state that Cook
refused to meet on several occasions, so they closed out their
investigation Feb. 1, 2021 and documented: "Needs Protective Services -
Refused.” Satterfield had argued that the credit union “undertook the
duty” to protect Cook after making a voluntary report to APS, but there
is no law in Virginia that recognizes that.
There's no word yet on what the family plans to do next.
According to The Financial Crimes Enforcement Network, a division of the U.S. Treasury Department, financial exploitation is the most common form of elder abuse but remains widely unreported. According to the Consumer Financial Protection Bureau, in 2020, financial institutions filed more than 62,000 reports involving elder financial exploitation worth $3.4 billion.
The scam
It started with a phishing email.
On
Oct. 5, 2020, Cook got an email that said his iPad and PlayStation from
Amazon were on the way, and if he had questions, he should call “Order
Help-Desk.”
The sender’s email address didn’t
appear to be associated with Amazon, but records show Cook contacted
the sender and had received a cancellation form, which gave vague
instructions for a refund that involved his bank.
The next day, he wired $49,500 to someone in Singapore through his Wells Fargo account.
Wire
records show he sent money to different people at different addresses
for the purpose of a “loan repayment.” The complaint doesn’t offer
additional details about the scammers.
Luckily,
Cook wasn’t the type of person to throw away anything. He knew how to
keep records – letters, invitations, tax records, bills and payments.
Satterfield gets emotional when she talks about
finding items that held sentimental value to her uncle − his Christmas
stocking, a Boy Scouts cap, buttons from his uniforms, and ribbons from
state fairs.
“He threw away nothing. It all mattered to him,” Satterfield said.
That very habit of record-keeping would lead Cook’s family to the folders that held documents for the international wires.
In
November 2020, Cook tried a second time to wire money through Wells
Fargo but was denied. According to the complaint, Wells Fargo didn’t
give a reason. But Cook instead wired the money from his Wells Fargo
account into his credit union account and sent the money abroad.
On Dec. 15, 2020, a credit union representative reported Cook to Fairfax
County Adult Protective Services, saying the transfers were “indicative
of possible elder financial exploitation.”
The representative reported that Cook had been
warned about being a victim of a scam but still wanted to proceed with
the transactions and appeared to be “mentally competent.”
According
to Satterfield’s complaint, Cook was a conservative spender, so sending
exorbitant amounts of money to foreign banks was out of the ordinary
for him.
“The act itself shows he wasn’t competent,” said Paula Williamson, Satterfield’s sister.
They
still don’t know who the scammers are, but bringing those people to
justice is important, too, Kimberley Ann Murphy, Satterfield’s lawyer,
said.
What is a bank's responsibility?
Naomi
Cahn, professor at University of Virginia School of Law and expert in
family law, estates, trusts and aging, said that before the move to
online banking, people went into banks often, which helped them develop a
relationship with their bank. In turn, it gave banks an opportunity to
observe changes in their customers.
But with Cook's age, should the bank have done more to protect him?
“Do
you want to make assumptions about everybody over a certain age? Should
bank tellers be assessing competence every time a customer comes in?”
Cahn asked.
Though it’s unknown what type of
relationship Cook had with each of his banks, he had been a customer at
both since the 1970s, according to the complaint.
And
though some states, like California, have mandatory reporting when they
suspect elder financial abuse, Virginia has voluntary reporting, Cahn
said.
“We all expect secrecy with our bank
accounts, and it’s protected,” she said. “But this is an exception to
secrecy with respect to bank accounts.”
In 2018, Congress passed the Senior Safe Act,
which provided financial institutions and employees who reported elder
financial exploitation with immunity from liability in any civil or
administrative proceeding. To qualify for immunity, a report should have
been made to a qualified agency like law enforcement, local adult
protective services, state financial regulatory agency, or the U.S.
Securities and Exchange Commission. And only financial institutions that
were either credit unions, depository institutions, investment
advisers, broker dealers, transfer agents or insurance companies
qualified for the immunity. In addition, only employees who were trained
on how to identify and report elder financial exploitation qualified
for immunity.
In 2022, Virginia also strengthened reporting laws,
more than a year after Cook’s death. The new rules allow financial
institution staff to delay or refuse to disburse and execute transfers
if they suspect exploitation.
While Cook’s
credit union filed the APS report and APS officials communicated with
the credit union, Cahn said questions remain on what happened after and
whether the bank or social service should have stopped the 42
international wires that continued until March 2021.
Murphy, Satterfield’s lawyer, said it’s a question they’ve been pondering, too.
“What
is a financial institution supposed to do? How are they protecting
their customers, how are they protecting themselves, and where is that
money actually going?” Murphy asked.
When USA
TODAY asked, Wells Fargo and Navy Federal Credit Union would not offer
further comment on their internal process in cases of suspected elder
fraud exploitation.
Murphy said scams come at a
high cost to an elderly person – especially one who is incapacitated –
who end up losing their life savings.
Satterfield said this scam her uncle fell for was
“beyond human judgment" and that legislative changes need to be in place
before another elderly victim is scammed.
"We're literally all one click away," Satterfield said.
Watching out for elder financial exploitation
Experiencing
an elderly loved one mentally declining can be hard for family members
and caregivers, so it's important to prepare ahead of time to prevent
financial exploitation by having a conversation about their finances
sooner rather than later.
The Consumer Financial Protection Bureau also has advice and tips on how people can prepare should they experience a decline in their capacity to manage their money:
- Organize important documents.
Organize information for bank and brokerage statements, mortgage and
credit information, insurance policies, pension or benefit summaries,
Social Security payment information, and contacts for doctors and
lawyers, and store them in a safe and easy accessible location.
- Designate a trusted contact person.
Add a trusted contact person to your brokerage account in case your
broker has trouble contacting you or believes you are being scammed. The
trusted contact person doesn't have access to the account holder's
money.
- Social Security Advance Designation. The Social Security Advance Designation allows people to designate up to three people to serve as a "representative payee" should there be a need.
- Create a durable financial power of attorney.
The durable power of attorney allows an agent, someone who has the
legal authority to make financial decisions if you become incapacitated.
It can be changed or canceled if you still have decision-making
capability.
- Ask for help. Involve a trusted friend, relative or professional in talks about your finances.
- Keep things updated. Be sure to keep accounts current and notify trusted contacts of any changes.
And
if you suspect elder financial exploitation, call your local police
department or sheriff to report it. If you suspect the financial abuse
is stemming from brokers or investment advisers, here is whom to call:
Full Article & Source:
An elderly man was scammed out of millions. Could the bank have done more to prevent fraud?
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