How to Recognize and Prevent Financial Exploitation of Vulnerable Adults
News came out this week of Santa Barbara California investment advisor, Julie Anne Darrah, being sentenced to 121 months in federal prison for stealing approximately $2.25 million from elderly clients. Darrah would liquidate the victim’s security holdings without their knowledge or consent and transfer the proceeds to accounts she controlled. Under the guise of taking care of them like a daughter, she would convince victims to sign documents making her the trustee of their trusts, a signatory on their bank accounts, or giving her power of attorney over their brokerage accounts. Darrah used the stolen funds to buy properties for herself, pay personal expenses, buy luxury vehicles, and operate other business ventures. Some of her victims were left without the money to pay for end-of-life care. Darrah’s sway was so powerful that in one instance a care facility would require her approval for visits to the client, even by family members.
Unfortunately, this is an all-too-common story. Just a few years ago, in May of 2022, Calvin Curtis, a respected elder law attorney in Utah was sentenced to serve 97 months in federal prison plus an additional three years of supervised release upon his release. In addition, Curtis was ordered to pay restitution to the 26 victims of his crimes. Curtis named himself as the trustee of trusts for elderly individuals and those with disabilities and then embezzled funds from those trusts for his personal use. It is alleged that one victim who suffered from mental illness and Alzheimer’s lost more than $10 million to Curtis.
Financial abuse can be committed by a wide range of individuals, but research and case studies consistently show that the most common perpetrators are people close to the victim. Adult children, grandchildren, or other relatives are the most frequent offenders. They may have access to the person’s finances and feel a sense of entitlement, especially if they believe they will eventually inherit assets. Other opportunists include in-home aides, nurses, or companions that can gain the person's trust and exploit that relationship. Abuse may include stealing possessions, forging checks, or coercing the person into giving them money or gifts. As we have seen in Curtis and Darrah cases, attorneys, financial advisors, or trustees with access to funds may take advantage of their positions as well. Unfortunately, this is often harder to detect because these individuals can manipulate documents or financial decisions under the guise of professionalism.
Signs that someone—particularly an older adult—is being financially exploited can be subtle or obvious, but the key is to look for sudden, unexplained changes in financial behavior or well-being. Here are the most common warning signs:
Sudden large withdrawals or transfers from bank accounts.
Frequent ATM use by someone who didn’t use it before.
New credit card accounts or lines of credit.
Missing funds, checks, or valuables.
Abrupt or suspicious changes to a will, power of attorney, deeds, or trusts.
New names added to bank accounts or property titles.
Utilities, rent/mortgage, or medical bills left unpaid despite having resources.
Discontinuation of services or eviction notices.
Complaints from caregivers or service providers about lack of payment.
A new “friend,” caregiver, or family member becomes overly involved in finances.
The vulnerable person gives large gifts or loans with no explanation.
Promises of repayment that never occur.
There are also behavioral signs in the vulnerable person that can be a tip off that financial abuse is happening.
A lack of awareness or confusion by the vulnerable person about any of the above.
The vulnerable person seems fearful or reluctant to speak about things.
The person tries to isolate the vulnerable person from family or trusted others.
The vulnerable person becomes anxious, withdrawn, or depressed.
What can you do if you suspect financial exploitation of a vulnerable person?
Talk privately with the person to express concern.
Document suspicious transactions or behaviors.
Report suspicious activity to local Adult Protective Services (APS), or law enforcement.
Consider involving multiple layers of review to financial transactions.
Preventing elder abuse, especially financial exploitation, requires awareness, vigilance, and proactive efforts from family members, caregivers, healthcare professionals, legal professionals, financial professionals, and the broader community. Maintain frequent contact with older loved ones to monitor their well-being and encouraging social interaction to reduce isolation, another major risk factor.
This post is for informational purposes only and not for the purpose of providing legal advice. You should contact an attorney to obtain advice with respect to any particular issue or problem. Nothing herein creates an attorney-client relationship between Hallock & Hallock and the reader.