TRAVERSE CITY – As a judge sentenced the curator who stole more than $ 10,000 from his bank accounts to 5 months in prison, George Pappas pointed the finger at his bank.
Less than a month after his court appointment to take over Pappas’ finances, his curator went shopping, withdrawing thousands and spending freely at stores like Victoria’s Secret.
To her surprise, her bank never reported on her spending, even though a quarter of her savings evaporated at ATMs and lingerie stores outside of town.
“I blame the credit union for sleeping while they were doing this,” said Pappas, who had a shared account with his restaurateur at 4Front Credit Union.
On September 26, Michigan enacted new protections for vulnerable adults, forcing banks to step in to spot and report financial crimes that target seniors like Pappas. In theory, the law adds another key oversight as the Michigan Elder Abuse Task Force seeks to reduce cases of elder abuse statewide.
Prior to last week, financial institutions were not required to report fraud with Adult Protective Services, the main government artery through which most communications regarding suspected elder abuse occurs. Banks were also not required to report to local police or local prosecutors.
The law will also give legal cover to banks to freeze accounts where suspicious activity has been detected, rather than being reluctant to do so. Kathryn Barron, a lawyer in the Michigan Attorney General’s Office who heads the Elder Abuse Task Force, said the legislation would sideline banks as elder abuse occurred within their institutions .
“It has the potential to be a game-changer,” Barron said. “It brings more people and more tools to the fight against elder abuse. “
Barron also hopes the passage of the law will help bring to light more cases of financial abuse of seniors. On average, about 1,200 cases are reported each year, according to the APS, which tracks abuse by children, spouses and caregivers. In 2019, the last year that data was unaffected by COVID-19, Grand Traverse County recorded 21 cases of financial abuse of seniors.
The GA office suggests the APS figures are a massive undercoverage. Part of the reason is that vulnerable adults rarely self-identify when they have been financially exploited, Barron said. Sometimes it’s because older people are embarrassed to admit they’ve been duped. To others, it’s because they had no idea.
This was not the case for George Pappas, who discovered the fraud when he went to pay his utility bills. When her check bounced, a Harbor Springs billing employee referred her case to local law enforcement.
In a police report, Harbor Springs Police Chief Kyle Knight detailed a meeting with a risk management specialist from 4Front Credit Union, who said “there were several charges on the account that ‘he didn’t think Pappas would have done’. These included dozens of transactions made by her curator, Elise Page.
Pappas’ bank statements show that between November 10 and December 10, Page spent money at Victoria’s Secret, Tractor Supply, GT Vapor, Joann Fabrics and Kohl’s. She also made a number of large withdrawals directly from ATMs.
Pappas’ account, which held over $ 63,000 when Page was appointed curator, fell below $ 50,000 within one month of receiving a shared debit card.
Representatives of the 4Front Credit Union did not respond to multiple requests for comment on how the credit union monitors the accounts of vulnerable adults. During the investigation, however, Pappas said he was told his credit union periodically checks the accounts “about once a year.”
“It’s a very lax situation,” Pappas said. “I am surprised by the 4Front Credit Union. 35 checks in weird places, how they didn’t take a peek to see what was going on.
It is not yet clear to what extent the new protections would have protected Pappas’ savings. Small financial institutions often rely on employee-customer interactions to combat the exploitation of older people, such as when older people are duped online to wire money to fraudsters posing as their grandchildren. children.
Other automated software wouldn’t necessarily detect spending that isn’t unique to the senior – those are triggered to detect based on location, said Scott Stenstrom, regional marketing manager at Fifth Third Bank.
Stenstrom’s bank was in no way involved in Pappas’ case, but like all banks, it regularly maintains accounts overseen by custodians.
“There is nothing really in terms of safeguards that would flag problematic transactions,” Stenstrom said. “Most software detects irregular things, but dollar amounts don’t necessarily trigger them. “
Stenstrom said banks have long trusted the Tories, who have actually helped prevent fraud in some cases by serving as a checkpoint for spending.
This is no longer the case.
“Before, you trusted restaurant owners. In most cases, they’re good people, ”Stenstrom said. “But too often you can’t trust everything someone else says.”
Discussing the Pappas case, Stenstrom said it would have been more difficult for the Pappas credit union to catch the transactions, which took place in the same state and were not conducted through face-to-face interaction with 4Front employees. It’s even harder to catch in the case of the elderly, who don’t often use mobile apps to monitor the ups and downs of their accounts.
And Stenstrom said Fifth Third was providing elder abuse prevention training long before the Financial Abuse Prevention Act was enacted last weekend.
“We have this responsibility. We take care of their money. For this gentleman, that’s all he has in the world, ”Stenstrom said. “You have to take the time and take it seriously. “