A retired lawyer in Virginia recently detailed how he lost hundreds of thousands of dollars in a sophisticated financial scam.
76-year-old Barry Heitin lost almost all his retirement savings, as detailed in a New York Times article that questions the ability of financial businesses to protect the assets of their clients. According to the elderly victim, he was under the impression that he was helping the government with an investigation but was really just being conned by criminals.
Without realizing that they were just funneling the money into their own pockets, Heitin enabled the scammers to grab roughly $740,000 of his money. The funds came from savings, checking, and IRA accounts. The retired lawyer explained how he was repeatedly told by the scammers that they were collaborating on “a big case” that would “stop a whole ring of people.”
He described it as a “rabbit hole” that he was “going down” right along with the scammers. But not only did Heitin lose nearly $740,000 in the scam. He was also required to pay $285,000 in state and federal taxes—which resulted from withdrawing funds from the tax-advantaged retirement accounts.
According to Heitin’s attorney, Robert Rabinowitz, there were warning signs that the retired lawyer was being scammed. Rabinowitz—who is trying to get back some of the money lost for his client—said that the “type of activity” used by the criminals is a “classic” example of financial scams and “should have raised red flags.”
Investment firms such as those used by Heitin are required to have a trusted contact for when accounts are updated or opened. This person is able to be reached should there be a concern that the accounts are being jeopardized.
However, these companies are not obligated to temporarily pause transactions at the suspicion of fraud. But the safety rails in place are even more important for elderly citizens who are seen as having notable savings and are at a higher risk of falling prey to financial scams.
Some such frauds that are known to target older citizens include phishing scams—falsely representing official businesses through email and text—telemarketing fraud—using calls and emails to sell fake products or obtain donations to fake organizations—and tech support scams, which involve scammers posing as customer representatives offering to fix computer problems.
Heitin’s story was publicized amid an overall increase in senior citizens being targeted in financial scams. Earlier this week, the federal government warned that recent communication from the Internal Revenue Service (IRS) might be one of these scams.
There has been a recent uptick in seniors being targeted by scammers who pose as IRS officials, according to Commissioner Danny Werfel. These fraud schemes reportedly occur both in and out of tax season. Data from the Federal Bureau of Investigation (FBI) reveals that a total of $3.4 billion was lost last year by citizens over the age of 60.
The IRS scammers are capable of changing caller ID so they can appear like government officials. Typically, they contact victims saying that there is an issue with tax returns and pose a looming deadline with threats of repercussions.
