Posted on Fri, Mar. 13, 2009
Internet scam victimizes the gullible and elderlyBill Morem
Regena Johnston knows second-hand what it feels like to be skinned in an international lottery scam. It feels like her ailing 79-year-old mother owing $235,000 to Bank of America.
“We first became aware of the fact that my stepfather and mom were in trouble when he made a call to his granddaughter asking for $40,000,” says the rural Paso Robles resident.
Johnston’s stepfather was 73-year-old Howard Crank, a Paso Robles resident with diabetes so bad that both legs had been amputated above the knees. He was also a veteran who served three tours of duty in Vietnam and was an aircraft mechanic and instructor in the United States Air Force for 25 years.
Howard was a frugal man who lived in a duplex with wife Betty in a modest North County seniors-only neighborhood off Creston Road. He’d managed to bank a nest egg of $91,000 in addition to his military pension.
Regena, husband Jess and daughter Cheryl Blank were surprised at Howard’s request for $40,000, especially when he was vague as to why he wanted it, just saying he had an investment opportunity. They thought he had a comfortable retirement and his call just seemed odd.
Then, three weeks after the request, while Howard was negotiating his motorized wheelchair from his parked car to a renal dialysis center in Templeton, something went terribly wrong: He may have caught his shirt in the wheels and was bucked from the chair, breaking the femur in his left stump. To complicate matters, his wife, 79-year-old Betty, was in Twin Cities Community Hospital at the same time with her own health issues.
Curious as to what he wanted the $40,000 for, and knowing no one was home, Regena, Jess and Cheryl went to Howard and Betty’s home and discovered why he wanted the money: He’d been notified that he’d won $715,555 as his share of a $113.8 million lottery in Madrid, Spain.
Over time, knowing they had a fish on the line, the $715,555 grew to $115 million. And, as his meticulous records would later reveal, Howard needed to pay ever-increasing transfer taxes upfront before the fictitious winnings could be released.
No one in the family knows why Howard fell for such a scam; his heart gave out April 1, 2008, a day after he underwent surgery for his broken femur, and they weren’t able to question his reasoning.
They believe, however, he was hustled over the Internet, and being a neophyte with a new computer, he may not have been aware that such come-ons are common crooked cons.
What they do know for sure is that from Feb. 22, 2007, to March 13, 2008, he made multiple wire transfers totaling $313,004.30 to a bank in Madrid, wiping out his life savings and leaving his widow with two equity lines of credit — secured by Howard’s modest house — to Bank of America for $235,000.
In addition to the mystery behind Howard’s motives in falling for such a scam, the family wonders why the Paso Robles branch of Bank of America would give him a $100,000 line of credit on Dec. 5, 2007, and another loan less than a month later on Jan. 3, 2008, for another $135,000.
They also wonder why no alarm bells went off when he sent 15 wire transfers totaling $274,799.05 to Spain, behavior he’d never exhibited in the 35 years he’d been a patron.
Banking and elder abuse
Under California Welfare and Institutions Code Sections 15630 and 15658(a)(1), banks are required to report suspected financial abuse of elders to Adult Protective Services or local law enforcement.
Under the code, tellers and bank officials are required to ask about the reasons for strange transactions or frequent withdrawals, which 15 wire transfers and two lines of credit of $235,000 obtained within a month of each other would certainly seem to qualify.
When the family asked officials at the Paso Robles branch of Bank of America if they questioned Howard about the withdrawals, they said he told them he was buying real estate in Spain. They said they loaned him the money because he had excellent credit.
The family later contacted county Adult Protective Services with regard to the bank and reporting requirements under state code. The agency then contacted the Paso Robles Police Department.
On April 18, the police opened a file and interviewed the bank’s vice president, Nick Moumtzoglou.
Efforts to reach Moumtzoglou were unsuccessful.
Officer Michael Rickerd said the case was informational only because the crime occurred in Spain. However, he did talk with Moumtzoglou and bank employees about their observations of Howard. They were told he had business in Spain and that was about the size of it.
“There’s really no way to know what happened. Unless someone (from the bank) comes forward and says, ‘Yes we knew a scam was going on,’ it would be a tough case to prove (elder abuse).” The case is virtually closed.
“At this point, it’s more of a civil case than criminal,” said Rickerd.
The family then contacted Gordon Young. A consumer market manager for Bank of America, he’s the person tasked with looking into reports of elder abuse at his bank.
“He told us that everyone at the bank acted correctly,” Regena said, “but he never made a written report that we could look at.”
Calls to Young’s Bakersfield office and cell phone were unanswered.
As it stands, the family believes it will never see a dime of the money that Howard shipped overseas. They notified the FBI and the U.S. Embassy in Spain. Nothing.
“We couldn’t track them,” Regena said. “Even though we had phone numbers on phone bills, we still couldn’t track them.”
Yet, in light of what they feel are questionable circumstances surrounding the lines of credit, they would like Bank of America to forgive those two loans.
In a letter dated Aug. 12, Regena wrote Young and noted: “I would be amazed if the property value that was used as collateral on these equity lines of credit was accurate or even checked prior to the approval of these loans. I am up to a total of $302,000 for loans against a two-bedroom, one-car attached garage, which is half of a duplex in a retirement living area of Paso Robles.
I … know the value of the homes (in that area) and am puzzled how this qualified.”
If the loans aren’t forgiven, the monthly interest-only charge on the $100,000 loan is $365; the monthly interest-only repayment on the $135,000 is $525. In that light, it appears Betty Crank will lose her home.
By all accounts, Howard Crank was a man with a big heart, someone who annually contributed $10 to $15 to each of 37 various charities. Perhaps he believed he could increase those charitable contributions and suspended his skepticism at being a European lottery winner.
The more likely reason is that he was simply unaware of computer scams; that any notification that you’ve won a lottery, or are the recipient of a fat bank account just waiting for you to collect, is nothing more than a heartbreaking, expensive fraud in the offering.
Bill Morem can be reached at bmorem@thetribunenews.com or at 781-7852.
http://www.sanluisobispo.com/183/story/650959.html
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