After more than 70 older Americans lost over $2 million in grandparent scams and similar cons across the United States, a federal grand jury has indicted eight people for racketeering.
The defendants belonged to a large criminal organization that, using extortion and fraud, “systematically targeted elderly Americans by preying on their concern for loved ones,” Department of Justice (DOJ) officials said.
The victims, including one in Rocky Face, Georgia, were in at least 15 states and each paid tens of thousands of dollars to the alleged criminal enterprise, officials said, and those targeted were left “financially and emotionally devastated.”
Two of those indicted are believed to have fled to the Bahamas and the other six have been arrested, officials said. Another 12 unnamed people, whose identities were said to be known, acted as so-called money mules in the case. “Mules” are people who transfer or move illegally acquired money for another person. The mules operated in California and Florida, officials said.
The alleged crime spree occurred from November 2019 to last October, officials said.
How the scams worked
In an indictment issued in late July and unsealed on Aug. 24, more than 20 of the victims are identified by their initials, places of residence and individual losses. All of those partly identified are men or women in their 70s or 80s. The oldest, an 89-year-old woman from Downey, California, lost $18,000. The largest individual loss was suffered by a 73-year-old woman in San Francisco who gave up $217,000 to men posing as attorneys for her grandson, who purportedly had been arrested and sued, officials said. The cash supposedly was to pay bail money and settle a civil lawsuit.
“This scheme has left many elderly victims financially and emotionally devastated.”— Ronald Grossman, acting U.S. attorney in San Diego
The defendants and their coconspirators received the money in various ways. Sometimes the victims’ cash was picked up in person; other times victims wired the money or paid using cashier’s checks or a peer-to-peer payment app. The defendants allegedly laundered the funds and divvied them up among themselves using, for example, digital cryptocurrency that is difficult to trace.
At least 10 of the victims were in San Diego County, California, officials said. The defendants all lived in one of three retiree-rich states — Arizona, California and Florida — at the times of the offenses.
The victims, however, hailed from diverse locales including La Quinta, California; Grand Prairie, Texas; Rocky Face, Georgia; and Farm River, Michigan.
All defendants are in their 20s, 30s and 40s except for one: 73-year-old Lyda Harris, formerly of Laveen, Arizona. Harris was arrested on a provisional warrant in Albania and the U.S. is seeking to have her extradited, officials said.
RICO law used against Mafia invoked
The case is believed to be the first time the Racketeer Influenced and Corrupt Organizations (RICO) Act has been used in an elder fraud case, officials said. The RICO statute dates to 1970 when then-President Richard M. Nixon signed it into law. According to the DOJ, Congress passed the measure with the declared purpose of seeking to eradicate organized crime in the United States. Since then, a variety of offenders, including members of street gangs and drug-trafficking rings, have had the proverbial book thrown at them using RICO.
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