By Dale Gribow
I was shocked reading last Saturday’s Desert Sun article entitled “Rancho Mirage Lawsuit could protect seniors”. Senior vets who have put their lives in harm’s way to protect America are again the victims of elder abuse and fraud. It could be happening to you, your parents or grandparents so read on.
This lawsuit is arguably a huge step towards protecting seniors from potential “Nationwide” financial scams…per a consumer’s advocacy group. Hopefully it will stop those that refer to themselves as “veteran advocates” from preying upon seniors. We look for it to punish these “advocates” and others from engaging in egregious fraudulent conduct against the senior vets.
The filed case arises from a widespread nationwide scheme of inducing elderly residents of retirement homes and assisted living facilities to reposition their assets earning 7-10% in order to apply for the free Aid and Attendance pension benefits offered by the US Dept. of Veterans Affairs. Unwitting senior veterans are sold unsuitable annuities that generate .06%. However they generate handsome commissions and profits for the insurance agent and insurance company.
Per the Chicago Tribune the insurance “advocate agents” sets up a “free lunch or dinner Educational Presentation” at retirement homes and assisted living facilities that are ostensibly to “educate senior vets on benefits available to them”. However they do not disclose, as mandated by California Insurance Code 785 et seq, that they are insurance agents. Thus they violate the law demanding a duty of honesty; good faith and fair dealing when the “purchaser” is 65 or older (i.e. elderly). They also fail to advise in writing, as required by Insurance Code section 789, that use of a mutual fund or other asset to fund the annuity may have tax consequences in addition to early withdrawal penalties etc.
In 2007 the SEC and Financial Industry Regulatory authority scrutinized 110 securities firms that utilize the “free lunch”. The report found that 100 percent were sales presentations despite the facts they were advertised as educational.
Per the AARP bulletin “for years AARP has warned about “veterans advocates” who are unscrupulous investment advisers targeting Senior Vets throughout the country.” The advisors are not accredited with the US Dept of Veteran Affairs. They allude that they are part of the government and are a nonprofit 501c3. Sometimes they wear a picture badge (with a patriotic looking logo) that ID’s them as a “Volunteer Veteran Advocate” with a senior veterans group.
They convince the innocent victims to buy annuities under the guise of an Aid and Attendance program which benefits low income war veterans and spouses for which they are often not qualified. They go after wealthy seniors in expensive retirement facilities, because people who are truly qualified for Aid and Attendance have no money. They induce the senior to reposition their assets into an irrevocable trust so they appear poor and can thus apply for the FREE Aid and Attendance Pension benefits offered by the US Department of Veteran Affairs. By going along with this subterfuge the senior veterans may jeopardize their chances to qualify for Medicaid and may be conspiring to defraud the government.
The AARP Bulletin explains the salesman “advocate” promises if they purchase through them they can be eligible for Department of Veteran Affairs pensions and other benefits per Joe Foster the administrator of Montana’s Veteran Affairs Division which recently set up a task force to address these schemes.
The irrevocable trusts usually utilize annuities which are long term investments that are often inappropriate for older retirees. The filed case involves a 90 year old vet. Some annuities must be held for a certain period of time. Thus a 90 year old that purchases a 10 year annuity will likely not be around when it concludes. If they pass away their heirs will be stuck with the same investment for that 10 year period.
Rarely do victims of elder abuse pursue litigation against suspected scammers per Prescott Cole a senior attorney for the California Advocates for Nursing Home Reform in San Francisco. He explains that Real Elder Abuse requires a senior to go to court. He explains seniors can’t handle court and they don’t want to be involved. He states the schemes are NOT unusual and are nationwide to induce war vets to sign away money in exchange for service that don’t exist.
Grant Gautsche, a director of the Riverside County Department of Vet Affairs, agrees with Cole stating he has a folder of groups out there under investigation. The recently filed case explains the senior did not know what an annuity was and the word annuity was never used in the sale. The sales person identified himself as a volunteer for a group for Senior Vets- alluding to their being part of VA and govt.
Litigation has been initiated against one insurance company who has this week agreed to stop selling this product in California. A special Hotline has been set up for elder abuse victim’s complaints and assistance. Elder abuse can be financial, like the case herein, or a hospital or nursing home mistreating the senior. The law allows for a recovery of three times the amount of the punitive DAMAGES.
The VETERAN FRAUD HOTLINE number is 760 837 7555.
If you have any questions regarding this column or ideas for future columns please contact Dale Gribow Attorney at Law at his NEW number 760 837 7500 and or his new email: dale@dalegribowlaw.com
Dale Gribow
1) TOP LAWYER DUI rating by Palm Springs Life every year.
2) Perfect AVVO 10.0 Peer Review Rating by fellow attorneys
3) Preeminent Rating by Martindale Hubbell legal directory.
4) Selected for Best Attorneys of America (Limited to Top 100 Attorneys in each state).
5) Man of the Year 7 times- including the City of Palm Desert and the City of Hope.
