Combatting Elder Financial Exploitation

Elder financial exploitation is the illegal or improper use of an older adult’s funds or property. It has been described as an epidemic with society-wide repercussions. While combating elder financial exploitation is largely the responsibility of state and local social service, criminal justice, and consumer protection agencies, the federal government has a role to play in this area as well.

It is difficult to prevent exploitation by individuals such as financial services providers, power of attorney agents, guardians, and paid in-home caregivers. Although states have primary responsibility for combating elder financial exploitation, the federal government could disseminate information on model power of attorney legislation, for example, to help states better safeguard against power of attorney abuse–one type of federal activity authorized under the Older Americans Act of 1965.

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Phony Chapstick, Baby Oil Among Products Seized In $2 Million Counterfeit Bust

Chapstick, Vicks VapoRub, Johnson’s Baby Oil and Vaseline were among the very popular products that were being made in a warehouses on Long Island. The products were then sold to smaller stores in New York, Pennsylvania and Florida.

Nassau County District Attorney Kathleen Rice announced Friday the arrests of Pardeep Malik, 59, and Hamant Mullick, 60, for making, packaging and selling $2 million worth of bogus goods.

The scheme was uncovered following a fire at one of the warehouses last April. During a follow-up visit from the fire marshal, officials stumbled upon the counterfeiting operation, Rice said.

“Counterfeit products such as these have the potential to pose health risks because of the ingredients used and the lack of proper sanitary controls under which they are produced. One of the things that we found is this book here, called The Formula for Lip Balm. ”

 

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Store ordered to stop selling counterfeit Marlboro cigarettes.

A cigarette maker got a court order in Syracuse, NY, this week to stop a store in Northern New York from selling large amounts of counterfeit Marlboros.

U.S. District Judge Glenn Suddaby issued an order Monday for the store in Hogansburg, on or near the Akwesasne Mohawk Indian Reservation, to stop selling the fake smokes. The store’s employees offered more than once to sell the undercover buyers discounted prices on bulk orders of 100 or more cartons, which they said Garrow could get on a day’s notice, the lawsuit said.

Philip Morris claims the store infringed on its trademark, and that the fake Marlboros could be more hazardous than the real ones.

Makers of counterfeit cigarettes don’t have to submit ingredient information to the Food and Drug Administration and don’t have to report “potentially harmful constituents in their tobacco or smoke” to government regulators, the lawsuit said.

 

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FDLE Busts Counterfeit Body Armor Ring

The Florida Department of Law Enforcement Orlando Regional Operations Center arrested three people each on one count of organized scheme to defraud and one count of counterfeiting body armor.

Investigators allege that the owner of Alpha Inc., Scott Anderson, 57, Ocoee, Fla., sold counterfeit body armor at gun shows across Florida. Agents believe Scott Williams, 51, Ocoee, Fla., and Arami Rodriguez, 36, Ocoee, Fla., worked for Anderson and assisted in the manufacturing and selling of the fake body armor.

“These suspects sold dangerous products to unsuspecting consumers raking in large profits for themselves,” said FDLE Orlando Regional Operations Center Special Agent in Charge Danny Banks.

The investigation began in August 2013 when Point Blank Enterprises, Inc. received a customer complaint. The customer indicated that he purchased Point Blank body armor at a gun show in West Palm Beach, Fla. and thought the product was counterfeit. Point Blank Enterprises, Inc. determined the armor was fake and contacted FDLE.

Ballistic tests conducted on the bogus product determined it provided no ballistic protection.

On September 11, 2013, FDLE executed a search warrant at Alpha, Inc., 10 S. Cumberland Ave., Ocoee, Fla., and located counterfeit body armor from Point Blank, PACA (Protective Apparel Corporation of America), ABA (American Body Armor), Gall’s, First Choice, and OM Tactical.

Agents also located additional body armor labeled as Full Dragon Armor, Coloma, Mich., which was determined to be a fictitious company. Evidence recovered during the search found the Full Dragon body armor to be substandard.

 

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Longview, Texas police investigating counterfeit gold, silver scams

A Longview Police Department investigation into counterfeit gold and silver coins and bullion bars resulted in the arrest of James Leroy Frattarola, on October 4. Federal authorities have also been asked to assist in the investigation since some of the items counterfeited were U.S. coins.

Longview Police learned that in the course of events related to this case, local gold and silver outlets were sold fake items. Several of these items were, in turn, sold to unsuspecting retail customers. One dealer reports recovering all the fakes that he sold to customers but it is unknown if other counterfeit coins or bullion bars have been circulated.

Included among counterfeit items located in Longview were counterfeit Morgan silver dollars, gold Krugerrand coins, a gold $50 dollar U.S. coin, and numerous one-ounce silver bars. The silver bars confiscated locally are counterfeits labeled with the Northwest Territorial Mint out of Washington State insignia. Police contacted Northwest’s personnel. They were extremely helpful and offered expert advice during the investigation. The Northwest Territorial Mint’s website offers advice to help buyers avoid purchasing counterfeit silver bars.

 

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LAPD, US Customs Battle Counterfeit Goods Market, Multi-Billion Dollar Industry More Lucrative Than Drugs

In an era when terrorism and illegal narcotics pose a clear and present danger in urban America, why should U.S. law enforcement spend precious resources policing luxury handbags?
Because, authorities say, those fake handbags — and other counterfeit goods — are practically an ATM machine for organized crime.
“More than likely it’s going to finance some other illicit activity, whether it be terrorism, human trafficking, drugs or some such,” said Customs and Border Protection (CBP) supervisor Bryan Nahodil as he surveyed some 16,000 fake Hermes bags seized in Los Angeles.
Counterfeit goods are more lucrative than drugs, according to officers with the Los Angeles Police Department’s Vice Division and the CBP.

Counterfeit goods account for nearly 10 percent of worldwide trade, an estimated $500 billion annually, according to the World Customs Organization.
U.S. Customs officers said the black market for fake handbags, shoes, purses and other luxury goods helps fund other crime rings, including drugs and human trafficking.

The CBP insists importing counterfeit goods is “the same as importing drugs or people.”

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Washington State man sentenced for trafficking counterfeit airbags

A Vancouver, Wash. man who imported and sold hundreds of counterfeit vehicle airbags on eBay and Craigslist, was sentenced in U.S. District Court in Tacoma to six months in prison, announced U.S. Attorney Jenny A. Durkan.

He allegedly imported counterfeit Honda, Subaru and Toyota airbags from sources in China and elsewhere, and sold them over the internet representing them as the genuine product.  He sold at least 964 of the counterfeit airbags via eBay with a sales total of $137,243.  He sold individual Honda airbags for an asking price of $110.

“The National Highway Transportation Safety Administration (NHTSA) has tested some counterfeit airbags resulting in alarming failures.  Driving a car equipped with a counterfeit airbag may be more dangerous than driving a car with no airbag at all in light of the potential for explosive shrapnel being thrown at the driver or passenger whose airbag fails…

The case was investigated by the FBI and Homeland Security Investigations.

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Counterfeiting links to organized crime highlighted

Counterfeiting funds Organized Crime in Scotland, the United States, and elsewhere.

Although buying a fake designer handbag, watch or sunglasses might be seen as a “victimless way to get something desirable on the cheap”, the money made from the trade in these types of goods was often used to fund significant criminal activity.

He added: “We know that serious organized criminals in Scotland will be tenacious in exploiting every avenue in human misery to make money from their illegal doings.

David Harvie, from the Crown Office and Procurator Fiscal Service, added: “The people of Scotland should be aware of the real effects of purchasing counterfeit goods – such behaviour only funds the groups that undermine our communities.

“While the prosecution service will continue do all in our power to prosecute and recover the profits made by organised criminals, so too should people across Scotland be aware of the ways in which they can assist in cutting off the funding at source.”

 

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$210 million in counterfeit handbags seized

U.S. Customs and Border Protection agents at the port in Los Angeles and Long Beach intercepted more than 16,000 fake bags in nine shipments from China and Hong Kong between June 6 and Sept. 17, The Riverside (Calif.) Press-Enterprise reported.

Hermes bags sell for as much as $9,400 to $18,000 apiece, said Elva Muneton, assistant port director of trade.

Muneton said people who buy counterfeit handbags for less “think they’re probably getting a deal,” but she noted the fakes may be made of plastic, rather than leather, and are poorly sewn.

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Department of Homeland Security Agents bust State Fair counterfeit booth

While vendors are selling merchandise at the New Mexico state fair, one vendor was arrested after being accused of selling counterfeit goods.

Department of Homeland Security (DHS) Agents were observed seizing multiple boxes with fake designer jewelry, sunglasses cases and wallets among others items.

“We’re seeing an increase in counterfeit goods in all the states,” said Kevin Abar, an assistant DHS agent in New Mexico.

 

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Counterfeit goods hurt legitimate retailers and the local economy

Over the weekend, U.S. customs agents say they seized two million dollars worth of counterfeit items at an Elmore County flea market.

Elmore County’s Santuck Flea Market is open for business on the first Saturday of every month, with vendors selling everything from area rugs to electronics. But the Flea Market was just the site of a federal raid, with more than 100 agents confiscating what they say were counterfeit goods. Some say they’re pleased with the big bust.

“These retail stores, it’s taking away from businesses and also cuts jobs because if you’re not going into the retail store to buy things then people are not going to have jobs,” says Montgomery resident Felicia Rose.

“Every dollar that goes toward counterfeit merchandise is a dollar that’s essentially stolen from legitimate vendors,” says Cox. “They pay taxes, they employ workers and they support the overall healthy economy.”

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Fashion designers rely on patents to deter knock-offs

Design companies tending to the details of fashion shows have more to think about than skirt lengths and handbag clasps — they must decide whether to seek U.S. patent protection for their looks.

Diane von Furstenberg, famous for her wrap dresses, has a design patent on a chain mail-style bag. The popular French line Celine has one on the envelope-style handbag sported by countless fashion experts at New York Fashion Week.

This summer alone, brands including Alexander Wang, Balenciaga and Tod’s all were granted design patents by the U.S. Patent and Trademark Office on accessory designs, records show.

Because U.S. copyright and trademark laws often do not apply to new, logo-free designs, designers are applying for design patents to protect clothing and accessories from being targets for knockoffs, industry attorneys said.

 

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More arrests are expected in a conspiracy case against a New York art dealer suspected of selling millions of dollars in counterfeit paintings.

More arrests were planned in the criminal case against a New York art dealer accused of peddling counterfeit art for 15 years as the undiscovered works of famous artists including Jackson Pollock and Willem de Kooning, a prosecutor said Monday.

Assistant U.S. Attorney Jason Hernandez made the disclosure at the arraignment of Glafira Rosales, 57, of Sands Point, on Long Island. Rosales, standing beside her lawyer, pleaded not guilty to a superseding indictment that accused her of engaging in the scam from 1994 through 2009.

U.S. District Judge Katherine P. Failla asked Hernandez whether more arrests were planned and he said there were. As for the case against Rosales, he said it would likely be resolved without trial by the end of this month or next.

Glafira Rosales, an art dealer, was arrested for filing false tax returns and for failing to disclose a foreign bank account to the IRS. Rosales allegedly failed to report the receipt of at least $12.5 million in income from the sale of works purported to be by celebrated abstract expressionist artists. Most of the income was received in a bank account in Spain that Rosales hid from, and failed to disclose to, the IRS. She was arrested in Sands Point, New York, this morning and will be presented in Manhattan federal court this afternoon before U.S. Magistrate Judge Sarah Netburn.

Manhattan U.S. Attorney Preet Bharara said, “As alleged, Glafira Rosales gave new meaning to the phrase ‘artful dodger’ by avoiding taxes on millions of dollars in income from dealing in fake artworks for fake clients. Her arrest shows that no matter how clever the scheme, attempts to hide income from the government to avoid paying taxes on that income will be discovered and prosecuted.”

IRS Special Agent in Charge Toni Weirauch said, “The sale of a piece of art for profit is a taxable event, and the seller is responsible for paying his or her fair share of tax, even if the art is counterfeit. The allegations in this investigation illustrate a ‘double-barreled’ tax evasion scheme: disguising who was actually selling the art and profiting from the sales, through the creation of a fictitious seller and the use of the name of a collector not associated with the transactions, and further concealing the proceeds by depositing them in an unreported foreign bank account.”

FBI Assistant Director in Charge George Venizelos said, “As alleged, Glafira Rosales committed tax fraud in falsely reporting that she was selling art on behalf of clients. In truth, those clients were just part of the picture she painted to perpetrate her multi-million-dollar scheme. There is consistency in the scheme, however: the artwork Rosales sold appears to be as fake as her story about the clients she claimed to represent.”

According to the allegations in the complaint unsealed today in Manhattan federal court:

In the 1990s, Rosales, an art dealer, began selling previously unknown paintings that had never been exhibited before and that she claimed were painted by some of the most famous artists of the 20th century, including Jackson Pollock, Mark Rothko, and Willem de Kooning. From 2006 through 2008, Rosales sold approximately one dozen of these paintings to two prominent Manhattan galleries for over $14 million.

 

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Counterfeit Semiconductors Intended for Use on Nuclear Submarines

Peter Picone, 40, of Methuen, Mass., has been charged with importing counterfeit semiconductors from China for sale in the United States.

“Counterfeit semiconductors pose a serious health and safety risk to consumers and end-users, and an even greater threat to the safety of the men and women of our armed services when they are sold for use in the military,” said Acting U.S. Attorney Daly.  “We will prosecute these types of cases to the fullest extent of the law.”

 

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Hezbollah involvement with counterfeit medicine

According to an article in The Jerusalem Post, dated August 1, 2013, “Hezbollah runs a complex network of front companies in Lebanon, the Gulf states and Europe that trade in counterfeit medicine, Kuwaiti daily Al-Seyassah reported on Tuesday. This international business in counterfeit medicine “facilitates the group’s terrorist operations,” the report stated, and includes Iranian citizens.”

“The group exploits the free trade zone in the Gulf and in Europe to run its business.”

Hezbollah and terrorist groups have been financing activities through proceeds derived from involvement in counterfeit goods.

 

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