Nursing Home News

Grandparent scams are back in the news. On Tuesday, acting U.S. Attorney Bridget M. Brennan announced that two Tampa, Florida, men have been sentenced for targeting elderly consumers in northern Ohio. Officials say the men fleeced victims for a total of $383,932.

Like most other grandparent scams, this one had a cash component. Officials say the defendants would allegedly call senior citizens and pretend to be a relative or an attorney for a relative and claim that the family member had been arrested and needed money for bail.

Once the victim took the bait, officials said the scammers would arrange to collect the money through a purported “courier.” Of course, that person was just one of the perpetrators of the scam.

The scam that won’t go away

The grandparent scam isn’t easy to squash, particularly because it pulls on the heartstrings of someone who wants to come to the rescue of a family member. In a late 2019 report to Congress, the Federal Trade Commission (FTC) said it received 256,404 fraud complaints in 2018 from consumers who were at least 60 years old, accounting for nearly $400 million in losses.

The “bail money” version isn’t anything new, but there are always creative crooks who think they’ve found a new angle -- like COVID-19 -- that might fly under the radar.

Scammers are now turning to social media to fuel their schemes because there are countless people who bare their souls on platforms like Facebook. Fraudsters take all that information and then use it to build a scenario the victim might fall for.

Many people never take the time to review what kind of identity information they’re leaving open for others to glean on social media. Unfortunately, Facebook doesn’t put those settings out in front like it does with “About,” “Friends,” and “Add to Story,” but if you add “/settings” to the Facebook URL so that it reads “https://www.facebook.com/settings,” you’ll find everything you’re allowing others to access and view. Take a good look at that and ask yourself why anyone really needs that information, then turn it on or off.

If you want something simpler, the Electronic Frontier Foundation suggests using a one-click privacy setting to retroactively change all your past posts to be visible to your friends only. 

Know someone 60 or over or someone who’s been scammed?

If anyone knows someone aged 60 or older, make sure they know about the grandparent scheme. It might just help them avoid becoming a victim down the line.

If you know someone who has been a victim of financial fraud, help is standing by at the National Elder Fraud Hotline. You can reach it by dialing 1-833-FRAUD-11 (1-833-372-8311).

Reporting a scam can help authorities identify those who commit fraud, and reporting certain financial losses due to fraud as soon as possible can increase the likelihood of recovering losses. The fraud hotline is staffed seven days a week from 6:00 a.m. to 11:00 p.m. (EST). 

The U.S. Attorney’s Office for the District of Minnesota has filed charges against 60 defendants, charging them with operating a nationwide telemarketing fraud scheme that targeted elderly consumers.

Authorities say the alleged scam revolved around magazine sales and netted the operators an estimated $300 million. The defendants were indicted on charges of conspiracy, mail fraud, wire fraud, and violating the Senior Citizens Against Marketing Scams Act of 1994 (the “SCAMS Act”). 

“This case represents the largest elder fraud scheme in the nation,” said U.S. Attorney Erika MacDonald. “More than 150,000 elderly and vulnerable victims across the United States have been identified in what is essentially a criminal class action.” 

The FBI and other regional law enforcement agencies took part in the investigation. FBI Minneapolis Special Agent in Charge Michael Paul said the operation consisted of using telemarketers to pitch magazine subscriptions over a 20-year period.

Magazine sales

According to court documents, the defendants “devised and carried out a telemarketing scheme” to defraud more than 150,000 victim-consumers through fraudulent magazine sales companies.

The companies operated telemarketing call centers from which their employees allegedly made calls using deceptive sales scripts designed to defraud victim consumers by inducing them -- “through a series of lies and misrepresentations” -- into making large or repeat payments to the companies.

The indictments further allege that the defendants used a variety of fraudulent and misleading sales scripts in their operation. The telemarketers are accused of falsely claiming to be calling from the victim’s existing magazine subscription company about an existing magazine subscription package. 

Claimed they could reduce costs

The indictments claim the telemarketers often claimed to be able to reduce the monthly cost of an existing subscription. In reality, the U.S. Attorney’s Office says the company had no existing relationship with the victim and was actually fraudulently signing the victim up for expensive and entirely new magazine subscriptions.

The government says the effect was that a single consumer went from having one magazine subscription to, at times, more than a dozen, all with different fraudulent magazine companies, each “sold” under the auspices of “reducing” the consumer’s monthly rate.

“Unfortunately, we live in a world where fraudsters are willing to take advantage of seniors, who are often trusting and polite,” said MacDonald. “It’s my hope that this prosecution is a call for vigilance and caution.”

Illinois is considering legislation to mandate and enforce minimum staffing requirements at nursing homes operating within the state.

The measure, the Nursing Home Residents' Quality of Care Initiative (SB 1510, SA #1), is the state’s latest response to complaints about the care elderly residents are receiving. It’s not a new issue. In 2016, the governor of Illinois signed a law allowing families to install electronic monitoring systems in residents' rooms.

At the time, the Illinois Department of Public Health reported receiving approximately 19,000 complaints of abuse and neglect by long-term care facilities each year. The sponsors of the proposed law say the situation hasn’t improved.

"It has been both heartbreaking and motivating to me, through my work, to see how devastating it can be for an entire family when a loved one receives inadequate care in a nursing home," said Illinois State Sen. Jacqueline Collins, sponsor of the legislation.

Strict enforcement

Collins’ bill calls for strict enforcement of the state’s minimum staffing requirements, heightened  public transparency of nursing home violations, and enhanced safeguards regarding psychotropic medications and a resident's right to informed consent.

"This initiative sets forth some much- needed measures to ensure that no family has to see their loved one suffer unnecessarily in a place where they are supposed to be cared for," Collins said.

In 2015, 39 percent of Illinois nursing homes received a low-quality rating from the Centers for Medicaid and Medicare Services. An AARP survey taken this year found 84 percent of Illinois voters supported legislation increasing the quality of nursing home care.

"Residents of nursing homes are some of Illinois’ most frail whose care needs have unfortunately adjusted their life's path to need skilled nursing care 24 hours a day," said Ryan Gruenenfelder, director of Advocacy and Outreach for AARP Illinois. "Residents and their caregivers need to be able to trust nursing homes at a time when they are more vulnerable than they have ever been."

Public vs. private

A study last year by the University of Illinois at Chicago found differences in the care residents receive at publicly supported nursing homes and those in the for-profit category. The researchers found that residents of for-profit nursing homes were twice as likely to experience clinical signs of neglect compared with those in not-for-profit residencies.

“Those signs of neglect included severe dehydration in clients with feeding tubes which should have been managed, clients with stage three and four bed sores, broken catheters and feeding tubes, and clients whose medication for chronic conditions was not being managed properly,” according to the researchers.

While Illinois has had its well-publicized issues with nursing homes, it may well be a national problem. In 2017, the state of Maryland sued a company operating five nursing homes within the state. Regulators claimed that about 1,000 residents were discharged into inadequate care so their places could be taken with higher-paying residents on Medicaid.

With nearly 1.5 million Americans residing in nursing homes, residents receiving the proper care should be the primary concern.

However, a new study conducted by researchers at the University of Illinois at Chicago compared the experiences of residents at for-profit nursing homes compared with those in not-for-profit nursing homes, and according to lead researcher Lee Friedman, the differences were significant.

The researchers found that those in for-profit nursing homes were twice as likely to experience clinical signs of neglect compared with those in not-for-profit residencies. As nearly 70 percent of nursing homes operate as for-profit businesses, this study proves to be wide-reaching.

“We saw more -- and more serious -- diagnoses among residents of for-profit facilities that were consistent with severe clinical signs of neglect, including severe dehydration in clients with feeding tubes which should have been managed, clients with stage three and four bed sores, broken catheters and feeding tubes, and clients whose medication for chronic conditions was not being managed properly,” said Friedman.

A call for better care

When looking at the ways many residents’ needs aren’t tended to at some for-profit nursing homes, Friedman and his team worked to develop a scale that they could use to put numbers to the various conditions associated with clinical neglect. Using the Clinical Signs of Neglect Scale (CSNS), the researchers were able to quantify over two dozen conditions that range in severity.

With the scale in place, the researchers evaluated the medical records of over 1,100 patients who had visited one of five major Chicago hospitals between 2007 and 2011. All patients were aged 60 and older and were treated for issues associated with neglectful care.

The biggest discrepancy between the patients was where they had received the poor quality of care. Friedman and his colleagues found that those in for-profit facilities were more likely to have severe medical issues because of neglect when compared to those in not-for-profit residencies or those living in private homes or with family members.

Friedman believes this is because of the dynamic between employees in many for-profit institutions. He noted that the residents end up suffering because of the way the money is distributed at many of these institutions -- the higher ups get bigger paychecks, while the staff that cares for the residents are often underpaid. According to Friedman, this can lead to “low morale” among staff members, though the biggest burden ends up on the residents.

To help correct these issues, Friedman is calling for better care at these facilities, starting with more accountability and higher-quality training.

“More oversight of these facilities, both for-profit and not-for-profit, needs to occur together with improved screening and reporting of suspected cases of neglect by all parties,” said Friedman. “There needs to be better staffing and training for enforcing these measures.”

Scammers love to prey on older victims. They often have money and they're usually very trusting. Easy pickings for the bad guys. There are three scams that seniors and their families need to be especially aware of.

The first is the grandparent scam, which has become extremely widespread over the last five years. A young sounding scammer calls an elderly person, calls them “grandpa” or “grandma,” and hopes the victim will give them a name.

After that, the scammer pretends to be a grandchild in distress, usually in a minor scrape with the law. The scammer pleads with the victim not to call the parents, but instead to wire money to pay a fire or post bail.

Michigan Attorney General Bill Schuette says in one case, Michigan grandparents wired $3,000 to someone they thought was their grandson after he called and claimed he was caught fishing without a license in Canada and needed to pay a $3,000 fine.

They sent an additional $30,000 after the phony grandchild called back to say that alcohol and drugs were found in his boat and he needed $30,000 to post bond to get out of a Canadian jail.

419 email scam

A second danger scam for senior is the 419 email scam. It's been around almost as long as the internet.

Named for a section of the Nigerian penal code dealing with fraud, this scam targets generous and goodhearted individuals, with a scammer pretending to someone who needs help – and money – to come to the United States.

In the past the scammer pretended to need assistance moving a large amount of money, promising the victim a cut. These days, the scammers are more likely to appeal to their victims' goodness.

Police in Marion, Ohio say a 73-year old woman there was bilked out of $150,000 by a scammer who was “desperate” to travel from Egypt to the U.S.

"Hacked" account

Meanwhile, police in Palm Beach County, Florida say several elderly residents have received calls from someone pretending to be an employee of a bank. The victim is told their debit or credit card account has been hacked and that the bank will send someone to their house to pick up the compromised card.

While the scammer has the victim on the phone, he tries to learn to card's PIN. Needless to say, banks do not send employees around to customers' homes to pick up compromised debit cards. They simply mail new ones.

Adult children should discuss these, and other scams with their elderly parents, urging them to never reveal private information to someone who calls or emails.

For some time, it looked likely that a measure would be passed that would ban the use of forced arbitration agreements in long-term care facilities, which basically take away residents’ right to a day in court by explicitly prohibiting them from filing lawsuits.

But back in June, after the measure was held up for months by litigation from the healthcare and nursing home industry, the Trump Administration proposed a rule change that stopped short of banning the agreements.

Consumer advocacy groups were outraged by the revision, saying that it didn’t go far enough to protect residents from being victimized by neglectful and unscrupulous nursing home practices. Now, a group of 31 U.S. senators are adding their voices to that opposition and asking the Trump Administration to reconsider its stance.

In a letter to the Centers for Medicare & Medicaid Services (CMS) administrator Seema Verma, the senators said that the agency should reconsider its position on forced arbitration clauses.

“The decision to admit yourself or a loved one into a long-term facility is already an extremely difficult one; nursing home residents and their families shouldn’t also be forced to sign away their fundamental rights in order to access the long-term care they require,” the senators said.

“We strongly urge you to reconsider this reversal and protect the rights of American seniors and their families by fully enforcing the existing CMS restrictions on pre-dispute arbitration clauses in long-term facility contracts.”

Stacking the deck

In their letter, the senators argue that forced arbitration clauses “stack the deck against residents and their families who face a wide range of potential harms, including physical abuse and neglect, sexual assault, and even wrongful death at the hands of those working in and managing long-term care facilities.”

They explain that the clauses do not give residents justice, but only funnel all of their legal claims into a resolution system that is fixed in favor of the nursing home industry. Additionally, they say that long-term care facilities often shield themselves from responsibility and public scrutiny with these agreements by covering up their bad practices. As a result, more seniors are placed in these facilities and subsequently abused as well.

“With Medicare and Medicaid spending over $82 billion on nursing home care in 2015, prospective residents their families and the public deserve greater accountability and transparency from these facilities, not less,” the senators said.

New proposed rule falls short

The lawmakers point out that CMS was lauded for its initial proposal that banned forced arbitration clauses, but that its current proposal under the Trump administration leaves residents and families at risk.

Specifically, the senators say the new rule allows nursing homes to once again require forced arbitration agreements to be signed before a resident can be admitted, leaving families with the tough choice of either signing the contract or not being able to enroll their loved one.

The rule also overrides state law protections that more broadly prohibit the enforcement of one-sided contracts and would allow unscrupulous facilities to threaten current residents with being kicked out if they don't sign the agreements.

“We strongly urge CMS to fully protect many of our nation’s most vulnerable individuals by withdrawing this proposal and sustaining and fully enforcing the existing restrictions on pre-dispute arbitration clauses in long-term care facility contracts,” the senators conclude.

The full letter, including the names of all 31 senators, can be viewed here.

After months of being held up by lawsuits from the healthcare and nursing home industry, the Trump Administration has proposed a revision to a rule that previously banned the use of forced arbitration clauses in long-term care facilities. The proposal stops short of banning these agreements, but the Centers for Medicare and Medicaid services (CMS) claims it will increase their transparency by making sure they are written in plain English and explained to residents.

However, consumer advocacy groups are denouncing the revision, saying that it would basically rescind commonsense policies meant to protect nursing home residents from abusive, neglectful, or unscrupulous nursing home practices.

"The Trump administration apparently thinks it is okay for nursing homes to force seniors into signing contract terms that give up their right to sue in court if they are subsequently victimized by neglect or abuse," said Robert Weissman, president of Public Citizen. "It’s hard to imagine a more callous policy."

Forced arbitration clauses

Forced arbitration clauses are basically contract terms that stipulate that a person cannot take another entity to court for legal disputes. Instead, signees – in this case nursing home residents – would bring their case to private arbitration where the matter can be settled.

However, these hearings are often confidential and don’t allow consumers to bring similar cases together as a class action. Instead, each resident would have to go through the arbitration process separately. Consumer advocates argue that the clauses strip complainants of their legal right to a day in court.

Back in 2016, CMS under the Obama Administration proposed a rule that would ban forced arbitration clauses from being used at long-term care facilities, but industry lawsuits held up its passing until a Mississippi judge granted a temporary injunction, which definitively halted its progress.

The Department of Health and Human Services had until June 2 to file for a continuance of the government’s appeal, but instead it let the matter lapse and the CMS has changed its tune. Under a new administration, the agency is now opting not to ban forced arbitration clauses at all under its most recent revision to the previous rule.

"These proposed revisions would help strengthen transparency in the arbitration process, reduce unnecessary provider burden, and support residents’ rights to make informed decisions about important aspects of their health care," the agency said.

Left with no choice

Since learning of the revisions, consumer advocacy groups have been protesting, saying that the changes simply better inform residents that they cannot take legal recourse against their nursing home for any deceitful or disreputable practices.

The revision is particularly harmful, the groups say, because it leaves residents without a choice. If they choose not to sign the agreements, then a nursing home can flat out refuse to let them live in its facilities. And since all nursing homes are able to enforce the same clause, consumers can quickly run out of viable living options.

“Because arbitration clauses are not truly voluntary unless both parties agree to arbitrate after a dispute arises, the Obama administration rule was a major step forward for nursing home residents’ rights to hold accountable those who mistreat residents,” said the Fair Arbitration Now (FAN) coalition in a statement. “This reversal by the Trump administration would hurt nursing home residents at a vulnerable time of their life. The FAN Coalition urges CMS to not to reverse this critical rule.”

CMS will be accepting public comments on its revised rule for 60 days after it has been submitted in the Federal Register. Consumers are urged to voice their opinions and submit a comment during that time.

Not a day goes by in America that thousands of consumers aren't tricked into paying large sums of money to scammers.

These individuals employ all sorts of clever psychological schemes to get intelligent people to suspend disbelief and act against their better judgment. That's why objective observers need to be ready to intervene.

Matthew Drye and Mariah Thomas work at Target, in Mechanicsville, Va., outside Richmond. Earlier this year they were on duty when an elderly couple checked out, purchasing two Target gift cards.

The couple said they needed to place $2,000 on each card. Rather than blindly accept the sale, Drye and Thomas, who were manning the checkout lane, asked the couple why they needed so much money on the gift cards.

Grandpa scam

The couple told the employees an out of state police officer had called them to say their grandson was in jail. To secure his release on bail, the couple needed to place $4,000 on gift cards and then call with the cards' numbers.

Fortunately, Drye and Thomas immediately identified the request as a variation of the "grandpa scam," telling the couple they needed to contact the police, and reassured the couple their grandson was not in jail. In far too many instances, consumers send thousands of dollars to scammers because there are no outside observers or family members to warn them not to.

Hanover County, Virginia Sheriff Col. David Hines this week presented awards to Drye and Thomas, stressing the importance of the business community in stopping scams.

Going above and beyond

“As law enforcement officers, we can’t be in all places at all times," Hines said. "It warms my heart to see our citizens go above and beyond to help each other, which in turn acts as another set of eyes and ears for the Sheriff’s Office."

In spite of the fact that scams are now so common and widely reported, many consumers are still unaware of them and how they operate. It's a problem the Federal Trade Commission (FTC) continues to deal with.

In testimony to Congress last week, FTC Acting Chairman Maureen K. Ohlhausen and Commissioner Terrell McSweeny outlined what law enforcement is doing to combat scams, but their testimony also revealed the magnitude of the challenge.

They reported that impostor scams, where scammers pretend to be government agents, well-known businesses, family members, or others, are proliferating.

Other widespread and dangerous scams include tech support scams, fake prize and sweepstakes scams, “free” trial offers with recurring fees for products or services consumers never ordered, debt relief scams, and abusive debt collectors.

As our loved ones grow older, sometimes hard decisions need to be made about what is the best living situation for their quality of life. While some families have the ability to take care of elderly relatives, limited space and amenities can often force consumers to consider nursing homes as an option.

But are these nursing homes providing the type of care that we should expect? While reviews on these facilities are mixed, a recent study has found that quality of care can decline drastically if your loved one is obese.

Not all nursing homes are equal

What many consumers may not realize is that not all nursing homes are equipped to handle residents who are obese. These individuals often require much more staff attention than non-obese members, usually because they may need help completing daily tasks that they can’t do on their own.

The nursing homes may also need certain equipment to cater to obese members’ needs, such as specialized beds or lifting equipment. These specifications can really limit the number of nursing home choices that obese, older consumers have to work with.

With this in mind, the researchers set out to see if there was any disparity in the quality of care between nursing homes that accepted obese individuals versus those who did not. Over the course of two years, they examined over 164,000 records of obese individuals over the age of 65 who were admitted to a nursing home. Quality of care was measured by the number of deficiency citations that each nursing home received.

Lower quality of care

After examining the data, the researchers concluded that nursing homes that admitted obese members had a lower overall quality of care. These facilities were most likely to have a higher number of deficiencies.

The statistics also revealed the degree of obesity had an impact on care. The researchers found that nursing homes that admitted members who were morbidly obese (having a BMI of 40 or more) were the most likely to have severe deficiencies in care.

The research team hopes that their work will raise awareness for the quality of care in nursing homes, as well as start the conversation on giving equal opportunity to obese, elderly consumers who are looking to gain access to a nursing home.

The full study has been published in the Journal of the American Geriatrics Society.

When you sign a contract to enter a long-term care facility, the document often contains what is called a pre-dispute arbitration clause.

It means that right up front, you agree to let a third party settle any dispute that might arise, rather than resorting to a lawsuit.

The attorneys general from 16 states have sent a petition to the Centers for Medicare and Medicaid Services (CMS), strongly opposing pre-dispute arbitration clauses in long-term care facility contracts.

“While arbitration can be used to resolve such disputes, the decision to do so should not be taken out of the hands of consumers prior to a conflict arising,” said Connecticut Attorney General George Jepsen. “The worst time for a vulnerable person or his or her family to decide the means to resolve potential future disputes is at the time of admission to a nursing home. It is simply unfair to ask someone in that difficult and delicate circumstance to enter a binding arbitration contract.”

No time to weaken provisions

The state officials say consumer protection provisions of these contracts should be strengthened, not weakened. They contend that an individual entering a nursing home or other long-term care facility, or family members acting on their behalf, are often making a healthcare choice under stressful circumstances, making it difficult to be rational or informed when deciding the resolution of future disputes.

"Arbitration can be a preferred method of resolving disputes, but that decision should not be taken out of the hands of consumers long before a conflict is ever contemplated," said Maryland Attorney General Brian Frosh. "The worst time to provide a waiver of patient rights like this is when you or a loved one are going through the difficult process of entering a long-term care facility."

In their written comments, the attorneys general argued that pre-dispute binding arbitration agreements in general can be unfair to consumers, jeopardizing one of the fundamental rights of Americans – the right to be heard and seek judicial redress for our claims.

Not voluntary

“This is especially true when consumers are making the difficult decisions regarding the long-term care of loved ones,” the attorneys general wrote. “These contractual provisions may be neither voluntary nor readily understandable for most consumers.”

Connecticut and Maryland joined California, Delaware, Hawaii, Illinois, Iowa, Maine, Massachusetts, Minnesota, New York, Oregon, Rhode Island, Vermont, Washington, and the District of Columbia in submitting comments to CMS.

In recent years, courts have been chipping away at arbitration clauses in all sorts of consumer contracts, in particular banking and telecommunications.

In the case of nursing homes, the attorneys general say their position is consistent with that of the American Arbitration Association, which determined in 2003 that it would not administer healthcare arbitration between patients and service providers that related to medical services unless all parties agreed to arbitration after the dispute occurred.

Stories of neglect and abuse of nursing home residents have become so common in recent years that Illinois has passed a law that allows families to install electronic monitoring systems in residents' rooms.

Illinois Gov. Bruce Rauner signed the new piece of legislation late last week. It takes effect January 1, 2016, and will make Illinois one of four states in the nation that explicitly allows for cameras in nursing homes.

"The Illinois Department of Public Health receives approximately 19,000 complaints of abuse and neglect against long-term care residents yearly," said Bob Gallo, AARP Illinois State Director. "AARP commends the General Assembly and Governor Rauner for their leadership on this issue and for helping to protect the state's most vulnerable residents."

Illinois Attorney General Lisa Madigan, who drafted the legislation and lobbied for passage, says it will give families much-needed peace of mind.

Peace of mind

"Deciding to place a loved one into a nursing facility is extremely difficult, and as Baby Boomers age, more families will be faced with that decision," said Madigan. "This law makes Illinois one of the first states in the nation to give families peace of mind by allowing them to monitor their loved one's care when they cannot be present."

Madigan said the legislation sprang from complaints her office received from nursing home residents and families who are concerned for their relatives' care and security. The new law allows residents of nursing homes and rehabilitation facilities or their family members to purchase and install video or audio monitoring devices in their rooms.

"The vast majority of Illinois' nursing homes provide high-quality services to their residents, but this law allows commonly used modern technology [to] add another layer of care," said Rep. Bob Harris, a co-sponsor of the legislation. "These recording devices will help families ensure that their loved ones are receiving respectful and compassionate care."

The new law stipulates that recordings are only to be used for civil, criminal, or administrative proceedings related to the health, safety, or welfare of a resident.

At residents' expense

Residents or their families must pay for the equipment and its installation. A resident or their guardian must consent to the use of a camera having the monitoring equipment in the resident's room. If a resident has a roommate, his or her consent is also required.

If monitoring equipment is installed, the facility manager must be notified and a sign placed on the door of the room stating: "This room is electronically monitored."

The law also provides protection to facility residents from any retaliation by facility staff. Staff could face criminal charges if they knowingly hamper, obstruct, or disable monitoring equipment.

Madigan has long cited an increasing need for additional safety measures at Illinois nursing homes as the state's population continues to age. At the moment, Illinois has more than 860 nursing home facilities with more than 76,000 residents.

Madigan said the Illinois Department of Public Health (IDPH) investigates approximately 5,000 complaints every year, the majority of which involve long-term care facilities. In 2013, the IDPH found 106 allegations of abuse, neglect, or misappropriation of property against residents by facility staff to be valid.  

Now let's see if we have this straight. Elderly investors were allegedly conned into investing in a company that said it had invented a device that generated a green laser line on football fields, making it easier for officials to determine first downs.

The time saved could be used to cram in more commercials in game broadcasts, thereby generating more money for television networks and the NFL, virtually guaranteeing the green line device would sell out in no time.

The company in question, Thought Development Inc. (TDI), of Miami Beach, raised about $2.4 million from more than 200 investors who were targeted by fast-talking salesmen, a federal indictment charges. 

Among other factors not disclosed by the salesmen was that using a laser powerful enough to do what TDI claimed would run the risk of blinding the players on the field.

Eight defendants

A U.S. grand jury has indicted eight individuals alleged to have participated in the scheme. Four other defendants have already pleaded guilty and been sentenced.

The same group is accused of fraudulently selling stock in something called Virgin Gaming, which supposedly provided a fee-based service that facilitated online tournaments, fantasy sports leagues and competitive online gaming. 

The Virgin Gaming scheme took one of two forms.  In some instances, sales agents told investors they would be investing in a company that had obtained the right to purchase shares of Virgin Gaming stock.  In that case, the allegedly raked in about $325,000 for non-existent stock.

“Securities fraud schemes that target members of our community jeopardize our personal investments and security,” said U.S. Attorney Wifredo A. Ferrer.  “Our office, in collaboration with the FBI, strives to prevent the victimization of our elderly residents.  By combatting these invasive fraud schemes, we help to protect potential victims from losing their hard-earned money to telemarketing thieves.”

Warning -- annuities can be hazardous to your financial health, as a fraud case in California illustrates. Palm Desert insurance agent John Slawinski, 60, was sentenced to more than nine years in prison earlier this week and ordered to pay $3.4 million in restitution for an annuities scam that targeted elderly victims.

“It is important that we protect the victims of crime and this case shows how seriously we take the crime of elder abuse, whether that abuse is physical, mental, or financial,” said Riverside County District Attorney Mike Hestrin. “When a victim loses much or all of their life savings later in life, that loss can be devastating.”

Slawinski was sentenced to nine years and four months in prison by Superior Court Judge Helios Hernandez and was ordered to pay restitution of more than $2.8 million to 13 separate victims – all in their 70s or 80s -- as well as an additional $261,667 to the California Department of Insurance and $285,902 to the California Franchise Tax Board.

What to do

Of course, not all annuities are bad. In fact, an annuity can provide a degree of financial security that many other investments can if it is properly structured and suited to an individual consumer's needs.

But unfortunately, seniors are often the target of unscrupulous annuity salesmen. They are prime targets because they generally have more assets than younger people and are frequently afraid of outliving their wealth.

While an appropriate annuity can provide improved financial security later in life, an inappropriate annuity can simply lock up a consumer's money for years or even decades.

Annuities are insurance products but consumers, elderly or otherwise, are generally better off dealing with a Certified Financial Planner (CFP) rather than someone whose primary business is selling insurance.

Certified financial planners are required to pass stringent certification exams and adhere to certain ethical standards and can usually offer a much broader range of annuity products. The Financial Planning Association has a searchable database that will help you find an advisor in your community. Consumer review sites like ConsumerAffairs publish reviews of major annuities underwriters and can also be a good source of information.

Simply choosing a local insurance agent or someone who solicits your business via the phone or Internet is generally not a good idea. Many annuities are not suitable for older consumers and, since all annuities are complex, making the right choice requires a knowledgeable and ethical financial advisor.

Consumers should also seek a third party's advice before purchasing an annuity. A trusted attorney or accountant is the best choice but a knowledgeable relative or friend may also be helpful.