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COVID-19 orders that kept people indoors and online provided a boon for cyber thieves and criminals, who cost businesses and individuals $4.2 billion last year — up from $3.5 billion nationally in 2019, according to the FBI’s Internet Crime Complaint Center.
Hawaii kupuna were frequent targets, with 452 victims over the age of 60 taken for $5,436,326 last year.
Steven B. Merrill was named special agent in charge of the FBI’s Honolulu Field Office on May 10, and is responsible for FBI operations in Hawaii, Guam, Saipan and Samoa. Merrill most recently served as a financial crimes section chief in the Criminal Investigative Division at FBI Headquarters in Washington, D.C., and led the bureau’s efforts to combat fraud related to the COVID-19 pandemic.
“I take it personally,” Merrill told the Honolulu Star-Advertiser at the FBI Honolulu Division headquarters in Kapolei. “I am a taxpayer. And I am going to make sure that it’s being protected. It will always be a priority for the FBI here in Hawaii to make sure that taxpayer funds are protected and, more importantly, used for the reasons they are being allocated and appropriated by our congressmen and congresswomen in Washington. And that is to support the most needy and those who depend on these funds to survive. It’s the public trust. I want to know that my tax money is being used for good. It means something. People make decisions every day and our job and the U.S. Attorney’s job is to make sure we prosecute those who are abusing that public trust. We want to make sure every dollar is accounted for and being used properly.”
The latest example of that accountability came with the June 30 sentencing of Hanalei Aipoalani, a former Olelo TV executive and city administrator for the Coronavirus Aid, Relief, and Economic Security Act.
Aipoalani, 42, pleaded guilty in March to embezzlement of AmeriCorps funds, a federal program to help communities in need, funneling the money to himself and his wife. He also pleaded guilty to accepting a bribe in September while serving as the city’s temporary CARES Act program administrator to help Na Leo TV CEO Stacy Higa, apply for $845,000 in CARES funding for Na Leo Hawaii and another company he controlled. (Olelo and Na Leo TV are Public, Education and Government Access channel operators.)
Aipoalani was sentenced to three years and 10 months in prison for diverting federal funds intended for struggling communities and using them to finance a lavish lifestyle for him and his wife that included first-class travel, high-end dining, a Ferrari rental and a vacation at the Four Seasons Resort Oahu at Ko Olina.
The FBI worked with the inspector general for the AmeriCorps program and other federal and local agencies to build the Aipoalani case. Merrill also mentioned a friend who works for AmeriCorps to help repair rivers and streams in his area as an example of the important, community-specific work done by the relatively small federal agency.
“(In the Aipoalani case) whatever funds were being diverted from what the people needed and wanted and what it was appropriated for, that money wasn’t being spent properly,” Merrill said. “And we were not going to hesitate.”
Senior fraud
The majority of the $5 million in losses by Hawaii residents over the age of 60 last year was attributable to three specific schemes:
>> Business email compromise — also known as email account compromise — is one of the most damaging and expensive online crimes, according to the FBI, and accounts for the second largest loss of money for seniors, after confidence or romance schemes.
Nationwide, BEC schemes were costliest in 2020; there were 19,369 complaints, with total losses of approximately $1.8 billion.
In a lot of BEC scams, criminals send an email message that appears to come from a known source making a legitimate request, like a vendor that sends an invoice requesting an updated mailing address or a potential home buyer receiving a message from a title company with instructions on how to wire funds for a down payment to a financial institution.
“People who think ‘I’m too smart for that’ are the people most vulnerable to the scams,” Craig Gima, communications director for AARP Hawaii, told the Star-Advertiser. “These people (scammers) are really smart. They follow the news and are very good at psychology and taking people off of their game. These cyber scams work because they take you out of the rational mode of thinking and get you to make decisions using your emotions.”
>> The third-largest money haul for senior scammers comes from technology support setups that promise unneeded fixes for computers or personal electronic devices like mobile phones in exchange for a sizeable one-time payment or recurring monthly payments that many seniors sign up for and forget.
At least two-thirds of tech-support victims, who overall filed 15,421 complaints last year, were over the age of 60, according to AARP.
“Each year, millions of elderly Americans fall victim to some type of financial fraud or internet scheme, such as romance scams, tech support fraud, and lottery or sweepstake scams,” said Calvin Shivers, assistant director of the FBI’s Criminal Investigative Division, in a statement accompanying the bureau’s 2020 Elder Fraud Report. “Criminals gain their targets’ trust or use tactics of intimidation and threats to take advantage of their victims. Once successful, scammers are likely to keep a scheme going because of the prospect of significant financial gain. It is only by victims reporting fraud that we can identify trends, educate the public, and support investigations, and nowhere is this more important than crimes against seniors.”
>> Medicare scams in which criminals offer free COVID-19 testing and vaccinations for those enrolled in Medicare and request Medicare beneficiary information. Scammers use personal information to submit false medical claims for unrelated, unnecessary, or fake services and tests that never happened.
Seniors are also targeted by prescription drug scammers who promise fake COVID-19 cures and use personal insurance information to submit medical claims for drug and other treatments.
AARP encourages seniors to place a free security freeze on their credit reports with the three major credit reporting agencies — Experian, Equifax and TransUnion — to help stop identity thieves from opening new accounts in their names.
To deter thefts and scammers, create online access to bank accounts, credit cards and retirement accounts and check them often for suspicious activity and use a password manager. It is difficult for most people to keep unique passwords for each online account, so a password manager application will create and store passwords in a secure online vault.
For all online transactions, use a secure, private, personal network and avoid public Wi-Fi and internet portals.
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How to get help
>> If you are a senior and believe your identity has been stolen: Call the AARP Fraud Watch Network Helpline at 1-877-908-3360 for guidance and support. For more information online please visit: www.aarp.org/money/scams-fraud/
>> If you think you are a victim of a COVID-19 fraud scheme or want to report suspicious activity: We encourage you to contact the National Center for Disaster Fraud Hotline, by calling 1-866-720-5721 or emailing disaster@leo.gov, and the U.S. Attorney’s Office for the District of Hawaii by emailing USAHI.COVID19@usdoj.gov.
>> If you would like to report a price-gouging complaint: Please report it to the DCCA’s Office of Consumer Protection, by calling 1-808-587-4272 or online at cca.hawaii.gov/ocp/consumer-complaint. For more information, please visit: www.justice.gov/usao-hi/covid-19-fraud.
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