New law stiffens elder fraud penalties

In 2008 Nancy Nash was convicted and sentenced to prison for bilking senior citizens out of $2.8 million in an investment scam.

Earlier this year James Robert Bartczak and Joseph Yorkus pleaded guilty to charges that could land them in prison for using a mortgage scam to swindle elderly victims.

Today people who commit similar crimes could face even stiffer penalties than Nash, Bartczak and Yorkus. A new law that went into effect July 1 could add tens of thousands of dollars in civil penalties on top of criminal sentences.

The law, Senate Bill 55, is meant to boost punishment for people who commit financial crimes against senior citizens and could also result in more money available for investigations and victim compensation. It passed both chambers of the Legislature unanimously and was signed by Gov. Brian Sandoval.

Advocates say it’s needed because senior citizens are a growing group in Southern Nevada and are considered prime targets by scam artists looking for victims with life savings, home equity and other assets to take.

“If they lose a significant portion of their money, it is a life-changing event,” said John Kelleher, chief deputy attorney general for criminal fraud of senior citizens on fixed incomes, who he said are particularly vulnerable to cons. “Some of the people who scam them weasel their way in as caretakers.”

HOW PENALTY WORKS

Many crimes against people 60 years old or older are already subject to sentence enhancers under Nevada law. SB55 adds civil penalties up to $20,000 for a first offense and $30,000 for a second offense to people convicted of financial crimes with elderly victims.

The penalty money would be in addition to whatever victim restitution money prosecutors can wrest from the defendants.

“We don’t have a debtors prison, but what you can do is apply the pressure in all aspects and arenas of their life to try and get the restitution and civil penalties,” said Binu Panal, an assistant attorney general in the fraud unit who worked on the cases against Bartczak and Yorkus.

SB55 is similar to a civil penalty add-on the Legislature approved in 2007 for cases of elder exploitation, said Brett Kandt, special deputy attorney general. Kandt, who advocated on behalf of the bill during the 2011 session, said it could make it more likely that such penalties are applied because the financial crimes it applies to can be easier to prosecute than general exploitation cases.

Exploitation cases can hinge on the cooperation of victims who might have incentive to downplay the crime or are unable to recount details, which can make them hard to prove in court.

When the accused exploiter is a caregiver “they can deprive the senior of medicine, food, simple life support as a way to put a gun to their head to get them to do what they want,” Kelleher said.

In contrast, prosecutors in financial crime cases can rely on paper trails, as opposed to unreliable or fearful witnesses, to provide proof.

Kelleher and Pinal didn’t have exact figures on how many fraud convictions in recent years could have included the new penalties had they been in place. But they said “nearly every case” the criminal fraud unit handles includes at least one elderly victim.

They said the Nash, Bartczak and Yorkus cases are typical of the types of scams targeting senior citizens.

HOW SOME SCAMS WORKED

According to news reports Nash, then 67, was convicted of duping people into refinancing their homes to generate cash she promised to invest in a real estate opportunity.

But much of the money didn’t make it into any investment and victims testified to losing their life savings.

Bartczak and Yorkus were also accused, and pleaded guilty, to charges of bilking people in mortgage scams.

According to the criminal complaint, the men used a phony letterhead to send letters to Bank of America customers wrongfully stating the bank handed over responsibility for servicing their home loans to Great Western Business Services, a company they created.

The letters tricked people into sending their mortgage checks to a post office box registered to Great Western. The complaint says the men went so far as to create a phone number for Great Western to answer calls from victims who received letters.

Kelleher said that in many cases older people are more susceptible victims for such scams.

“They come from an old mindset, they get letters in the mail (and) they actually open them and read them,” Kelleher said.

“They don’t know a lot of solicitations they receive are bogus.”

Contact reporter Benjamin Spillman at
bspillman@reviewjournal.com or 702-477-3861.