Forensic Accountants: Guardians Against Elder Fraud
Elder financial abuse has emerged as a pressing concern, with senior citizens increasingly falling prey to financial exploitation, often by those closest to them. In an alarming report, it was disclosed that seniors lost over $3.4 billion to elder fraud in 2023, marking an 11% increase from the previous year. These figures only scratch the surface, with some sources like the Better Business Bureau estimating losses to top $36 billion when including unreported cases.
Forensic accountants are stepping up to safeguard our elders, offering a beacon of hope amidst these daunting statistics. Karen Webber, a forensic accountant with the Bonadio Group in New York, is among those championing this cause. By collaborating with government agencies and law enforcement, Webber and her team conduct thorough investigations to trace and uncover financial malfeasance.
“Our role often begins with a call to action, either from Adult Protective Services or law enforcement, highlighting the crucial need for expertise in financial exploitation,” Webber explains. Their methodical approach entails the meticulous analysis of banking, credit card, brokerage, and real estate documents, piecing together the financial activities of elder individuals to unveil any discrepancies.
The challenge, as Webber notes, is not only in identifying where the money has gone but also in recognizing what’s missing – a rent income that’s no longer deposited or the proceeds from a house sale that mysteriously vanish. This level of scrutiny requires an astute understanding of financial patterns and the ability to notice the absence of expected transactions.
The 2020 Netflix movie “I Care A Lot” highlighted the disturbing reality of guardianship fraud, demonstrating the extent to which seniors can be victimized. “It’s the perfect crime in a cottage industry,” Webber remarks, emphasizing the sophisticated and often hidden nature of these financial crimes. As a forensic accountant, Webber has been pivotal in cases involving estate litigation and guardianship abuse, providing expert testimony that adds gravitas and clarity to complex financial narratives.
Through her work, Webber has encountered both shocking thefts and subtler forms of exploitation, where seniors suffer not from the loss of money alone but from the degradation of their dignity and quality of life. The impact of financial abuse extends far beyond the immediate financial loss, leading to long-term health consequences, increased dependency on government assistance, and emotional distress.
Compounding this issue is the limited resource allocation for Adult Protective Services compared to Child Protective Services, rooted in a societal misperception that adults, due to their age, require less support. Webber stresses that the shame and embarrassment felt by victims often deter them from seeking help, especially when the perpetrator is a family member. This, coupled with the natural decline in financial decision-making ability as one ages, leaves seniors particularly vulnerable to exploitation.
For accountants interested in contributing to this field, Webber recommends pursuing specific training materials available through professional organizations. Such education not only enhances one’s understanding of elder financial abuse but also equips individuals with the tools needed to combat it effectively.
The advent of technology holds promise in aiding the detection and prevention of elder fraud. Webber herself has been involved in developing software aimed at empowering government agencies with forensic accounting capabilities, reducing the need for external consultation.
Despite these advancements, the need for skilled forensic accountants remains paramount. “Technology can streamline the process, but the human element is irreplaceable,” concludes Webber. The fight against elder financial exploitation is multifaceted, requiring a blend of expertise, compassion, and innovation to protect some of society’s most vulnerable members.
