DDN Investigates: Scams targeting you

‘It can happen to anyone:’ Scam artists prey on area residents, stealing millions

Scams become more sophisticated and attack people of all ages, sometimes draining them of life savings

The story is as familiar as it is depressing: Police said an elderly Miami Twp. woman recently lost more than $100,000 in a sweepstakes scam.

The woman in her 80s never called police to report the crime, township Police Chief Ron Hess said. She told a neighbor, who told her daughter, who then called police.

The victim received a letter claiming to represent “Publishers Clearing House,” saying she won $2.2 million. Police are piecing together what happened, but it appears the victim executed multiple wire transfers, the chief said just as an investigation was starting late last month.

“She is out at least $113,000,” Hess said.

A Dayton Daily News investigation of area scams in the past year found this resident is hardly alone. Fraudsters daily try to separate people from their money, and seniors are especially at risk. Scammers see older people as isolated, vulnerable, trusting — and sitting on nest eggs ripe for the taking.

DANGEROUS SCAMS: 10 schemes that hustled the most money from victims

“Oftentimes, these victims are the most vulnerable in our community,” said John North, president and chief executive of the Dayton Better Business Bureau (BBB). “Oftentimes, it’s seniors in our community who fall victim to these scams.”

It’s not just older people who are victimized.

Dayton police recently investigated a fraud complaint after Dayton Public Schools were scammed out of a superintendent’s $5,000-plus paycheck.

Dayton Public Schools’ payroll department received an email from someone claiming to be Superintendent Elizabeth Lolli requesting to change her bank account information, an assistant treasurer reportedly told police.

Payroll staff changed the account number, but then was advised by Lolli that she had not been paid, police said recently.

By that time, the money that was deposited — $5,159.68 — was already withdrawn from the account.

Cheryl Misch received a scam call that said she and her husband owed $500 in unpaid back taxes and said if they did not pay it immediately she would go to jail. BILL LACKEY/STAFF
Photo: Staff Writer

‘I FELT VIOLATED’ 

Sometimes, scam attempts can be warded off. South Vienna resident Cheryl Misch, 63, sensed immediately that something was amiss when she was contacted last year by a caller claiming to work for the Internal Revenue Service.

HOW TO BEAT SCAM ARTISTS: Tips to be safe

The caller told her that she and her husband owed more than $500 in unpaid back taxes, and they needed to pay soon — right away, in fact.

Otherwise, the caller warned, she and her husband would be arrested.

“He said we’ll have someone in front of your house in about 15 minutes if you don’t pay this,” the Clark County resident recalled. “He said, ‘We’re just trying to collect this debt so you don’t go to jail.’”

Misch didn’t fall for it.

“I said, ‘I don’t think I’m going to go to prison.’”

Seniors lose an estimated $2.9 billion each year from financial exploitation, according to the U.S. Senate Special Committee on Aging.

A new study found Ohio to be the 17th most targeted state in America for robocall phone scams during tax season.

According to AllAreaCodes.com, Ohio ranked No. 17 with 1,858 complaints to the Federal Trade Commission per 100,000 people.

Locally, nearly 230 attempted scams were reported to the Dayton BBB in 2018.

The No. 1 scam nationally in 2018, according to the Senate 2019 Fraud Book: Impersonating an IRS agent.

Con artists and criminals impersonating official government personnel — pretending to work for the IRS, the Social Security Administration or Veterans Affairs, among others — is a big problem generally.

What alarmed Misch was that the caller claiming to be from the IRS already knew so much about her.

“He had my name and my phone number,” she said.

The caller knew her address — and her husband’s name.

“I felt violated,” Misch said.

‘I HAD A NERVOUS BREAKDOWN’ 

John Gregory Schmidt, right, confers with his attorney Stevey Pierson in the Montgomery County Common Pleas Courtroom of Gregory Singer on Wednesday during a motion to suppress evidence hearing. Schmidt has been indicted for 128 felony counts related to securities fraud from his work as a financial advisor. TY GREENLEES / STAFF
Photo: Staff Writer

Last fall, the U.S. Securities and Exchange Commission charged Centerville resident and former area broker John Gregory Schmidt with misappropriating more than $1.16 million from accounts owned by seven customers, transferring that money to at least 10 other customers — in effect, “robbing Peter to pay Paul,” according to civil charges filed in U.S. District Court.

In one instance, Schmidt continued to defraud a customer ever after that customer’s death, the SEC charged.

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Mike Gantt, 75, of Kettering, said he and two of his brothers were Schmidt clients. Gantt said his son expressed misgivings to him as his account never grew.

“I had a nervous breakdown,” Gantt told the Dayton Daily News after a recent court hearing in a local criminal case against Schmidt. “My account never did change. It just stayed the same.”

Another financial adviser told Gantt that his account should be “double what it is.”

Kettering resident Mike Gantt, 75, says he and two of his brothers are victims of John Gregory Schmidt’s investment scam. Schmidt appeared in the Montgomery County Common Pleas Courtroom of Gregory Singer on Wednesday during a motion to suppress evidence hearing. Schmidt has been indicted for 128 felony counts related to securities fraud from his work as a financial advisor. TY GREENLEES / STAFF
Photo: Staff Writer

Gantt said when he asked Schmidt about the account, he was told: “That’s just the way it is … basically, my money stayed flat the whole time.”

RELATEDSEC charges man with ‘rob Peter to pay Paul’ scheme

“For years, this defendant defrauded a number of investors, many of them elderly or with dementia,” Montgomery County Prosecutor Mat Heck Jr. said when his office announced indictments of Schmidt in December. “He had to keep stealing from more investors in order to cover for the thefts from other investors.”

Fraud is attempted “almost daily, and it happens in almost every aspect of life,” said Lee Oliver, 74, of Milford, a volunteer with AARP, the American Association of Retired Persons. “From health care to benefits, there’s hardly an aspect of life that doesn’t include some capability of fraud.”

‘TOO GOOD TO BE TRUE’

“You’ve been specially selected.”

“You’ve won a big prize.”

“You’ve won a foreign lottery.”

“You need to act now.”

“You need to decide now.”

“You need to pay now.”

The Federal Trade Commission has simple advice for anyone who hears these kinds of entreaties over the phone: Hang up.

If it’s seems too good to be true, there a good reason for that, Oliver said.

“You didn’t win the Jamaican lottery, for a couple of reasons,” Oliver said. “No 1, there is no Jamaican lottery.”

Adds Oliver: You don’t need to assist residents of Africa who want to send you a check for $20,000 — provided, of course, that you’ll send $5,000 back, keeping the rest for yourself.

Cheryl Misch received a scam call that said she and her husband owed $500 in unpaid back taxes and said if they did not pay it immediately she would go to jail. BILL LACKEY/STAFF
Photo: Staff Writer

“That person that you met online who refuses to meet you for lunch ever is probably not who you think it is, especially if they’re asking you for money,” Oliver said.

These criminals typically try to prey on people who have some sort of vulnerability.

The classic “sweetheart scam” involves finding someone online, pretending to be a friend, telling the target what they want to hear, asking them for money every now and then — but never meeting them, Oliver said.

“They prey on people who are vulnerable from a social perspective,” he said.

Lottery scams have always been big. Someone tells a mark they have won money.

Ah, but there’s a catch.

“They tell you that they need an advance fee to be able to complete the transaction,” the BBB’s North explained. The “fee” is supposed to associated with taxes the victim supposedly owes or costs tied to claiming a prize.

“You haven’t won a lottery if you haven’t entered one,” North said.

“Secret shopper” or “mystery shopper” scams ask targets to buy gift cards and use those cards to spend money at a store or restaurant. Legitimate “mystery shopper” arrangements will have the shopper reimbursed and free to keep a product or service. Sometimes the shopper receives a small payment, according to the FTC.

Recognize scams

1. If you’re contacted with a surprise offer for “free” money or “fast” cash, there’s a good chance that you’ve been targeted by a scam artist.

2. If you’re told you “must” act quickly or in a very short time, be wary. Legitimate financial transactions take time, and they should be well understood.

3. Another red flag may be the best: If it seems too good to be true, it probably is. Use your common sense, and keep that wallet closed.

Source: AARP Foundation

In this dishonest ruse, however, a shopper will have to pay to participate or will be asked to wire money back to a certain account complete a transaction.

Unfortunately, these scams are attempted because they sometimes work.

“They do,” North said. “It’s worth billions and billions of dollars. That’s the reason they continue to do it – because many people are falling for it.”

In 2015, the BBB developed a tool called “Scam Tracker.” It’s a web site (https://www.bbb.org/scamtracker/us/) where consumers can report scams.

‘IT CAN HAPPEN TO ANYONE’

Russell Maas of Washington Twp. is a former Montgomery County sheriff’s deputy who has received FBI training. So he was prepared when a scammer called offering to change his Social Security number.

The caller’s story: Police found a blood-stained car in Texas holding $200,000 in cash. Somehow, the car was traced back to Maas, and U.S. marshals were readying to seize his bank accounts.

“I have 25 years with the sheriff’s office,” recalled Maas, 76. “I knew where this was going.”

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The caller wanted to “verify” Maas’ Social Security number and transfer his money to an “e-commerce account.”

“I said, all right, this is ridiculous,” Maas said. “There are a lot of old people that are going to be taken advantage of. The best I can do is retaliate and tie you guys up for a while.”

As ridiculous as the ruse was, the ploy must work occasionally, Maas believes. The results can be devastating.

“If you take a man or woman in their late 70s, and you hear that their bank accounts are going to be seized, they don’t have a thing to live on,” he said. “They’ve got an unlimited way to spin stories.”

RELATED: Millions feel sting of identity theft

Some scammers are increasingly sophisticated, clever enough to reach — or attempt to reach — even the most educated, tech-savvy and careful among us.

Some scams involve recording a victim’s voice saying “yes” in response to an apparently innocuous question such as, “Can you hear me?”

“They record you saying ‘Yes,’” North said. “They use that (recording of your voice) to do a variety of things. But, obviously, you are not saying ‘yes” to the multitude of reasons (they call). They may be using that to establish credit in your name.”

Parul Gujral, founder and CEO of San Francisco-based Snowball, fell victim to a sim swapping attack, and his company was hacked through a phishing incursion.

Gujral — a tech space veteran for 10 years, a start-up entrepreneur, former vice president at a software company — wonders if someone with a phone carrier was able to get access to what should have been secure information.

Sim swapping is a type of identity theft, a ruse that involves convincing a cell phone carrier into switching a victim’s phone number to a new device in order to gain access to sensitive data — credit card numbers, bank account data and more.

“I followed the best practices, and yet still I fell victim,” Gujral told the Dayton Daily News. “It can happen to anyone.”

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“Oh yeah, I get them all the time,” Bridget Moore, an attorney and vice chair of the litigation department of Washington D.C. law firm Baker Botts L.P., said of scams attempted over the phone.

Moore said one ruse sometimes involves a caller telling her: “I need to call the IRS immediately. They’re freezing my accounts.”

“I get tons of them,” North said of these attempts. “It’s actually become unmanageable on the cell phone.”

“If you don’t know the number, let it go to voice-mail,” advised Brandy Bauer, associate director in the Center for Benefits Access, National Council on Aging.

One tactic that makes these calls insidious is caller ID spoofing.

A caller’s phone number is deliberately masked so that the caller falsely appears to be calling from the IRS or the Social Security Administration, the NCOA’s Bauer said.

“The thing is, it’s very very rare for Social Security or the IRS to make first contact with you over the phone,” Bauer said.

‘I’M CALLING THE POLICE’

Rocky Clay lives in Dayton. He said he has been targeted in numerous scam attempts. In one instance, a caller claimed to be reaching out because someone had used his Social Security number.

“I told her to go to hell,” the 80-year-old Clay said. “Social Security doesn’t call people. I just hung up on her.”

Another ruse: A caller claimed Clay had won $1 million thanks to Publisher’s Clearing House — but first, he had to pay $500 in insurance to claim the prize.

“I get a dozen calls a day about stuff like that,” Clay said. “I don’t pay no attention to it.”

Legitimate companies and institutions almost never make those types of calls.

“We don’t do that as a practice,” said Irda Hinders, contact center manager for Dayton Power & Light (DP&L). “We don’t make any outbound calls trying to collect money.”

When electric customers receive this kind of call, they should hang up and call DP&L at (800) 433-8500, she said.

If DP&L needs to contact you over a billing matter, the utility will send a letter first, said DP&L spokeswoman Mary Ann Kabel.

These frauds are often attempted when it’s hot or cold, and customers fear having power shut off, Kabel said.

“Sometimes unfortunately, they (customers) do fall for this,” Hinders said.

According to the Public Utility Commission of Ohio’s (PUCO) “consumer bill of rights,” if an electric utility customer does not pay a bill by the due date, the company will send a 14-day notice before disconnecting service.

And no utility can disconnect service for non-payment that is mired in a “bona fide” dispute, the PUCO says.

Similarly, the IRS will not contact you first on your cell phone, North said. Usually, the first communication from the IRS will be via mail.

“They’re not going to tell you to pay by pre-paid debit card,” North said. “They’re not going to call you initially to demand payment.”

And the IRS will not threaten to send over sheriff’s deputies or police to collect payment.

EMAIL PROBLEMS

“Phishing” also continues to be a problem.

“They send you emails asking you to click on a link,” North said. “Whether they are impersonating your bank, your credit card company or a government institution, when you click on that link, it downloads a virus to your computer.”

The virus will access contacts on your computer. Spamware is then able to duplicate itself by sending itself out to people in your contacts.

Darren Furnas of Washington Twp. said his mother received a call warning her that her computer was infected. In exchange for personal information, the caller offered to “fix” her computer.

Furnas, 45, said she hung up on the fraudster.

A month later, he believes the same people called him.

“I told them I was going to call the police; I told them not to call anymore,” Furnas said.

They called back twice within two months.

“Finally, I just had to get upset with them and say I’m calling the police,” Furnas said. “And that’s when I called the Better Business Bureau.”

Neither Furnas nor his mom lost money. But his advice is simple: If you don’t know the person contacting you, don’t give them information.

“If you have doubts, don’t open (the email),” he said. “If you have doubts, don’t give them information.”

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