Letter to the Hon. Mitch McConnell, Majority Leader of the U.S. Senate, and the Hon. Charles Schumer, Minority Leader of the U.S. Senate - Baldwin, Cassidy Push to Protect Seniors From Scams in Next COVID-19 Relief Package

Letter

Dear Leader McConnell and Leader Schumer:

We write to request the inclusion of S. 3487, the Edith Shorougian Senior Victims of Fraud
Compensation Act, in the next COVID-19 relief package. The Federal Trade Commission (FTC)
reports that as of April 15, 2020, the agency has received over 18,000 scam reports related to
COVID-19 and Americans have reported losing over $13.44 million dollars to fraud. Scammers
view the pandemic as an opportunity to exploit anxiety over this public health crisis and
particularly target seniors who are physically separated from their support networks. We need to
protect seniors who are especially vulnerable to fraud and abuse by bad actors, and protect the
retirement savings they worked so hard over a lifetime to build. When seniors get scammed, they
should be paid back and that's what our bipartisan legislation does.

Our bipartisan legislation amends the Victims of Crime Act of 1984 (VOCA) to add senior
financial fraud and abuse as an eligible item for reimbursement, allowing states to pay back
victims of senior fraud and be reimbursed by the federal Crime Victims Fund. Additionally, our
bill amends VOCA so that payments from deferred and non-prosecution agreements --
agreements often used by the Department of Justice to go after white collar criminals -- be
deposited into the Crime Victims Fund. It is critical that the entirety of the legislation, both the
provision to add senior fraud as an eligible item and the provision to supplement the Crime
Victims Fund with funds from white collar crime, be included in COVID-19 relief legislation.
By including possible additional funding, but not expanding eligibility, Congress would be
spending money gained from prosecuting white collar crime--which includes senior fraud
scams--but not making the actual victims of such scams eligible for repayment. Therefore, we
do not support a piecemeal effort that includes only the revenue portion and not the eligibility
portion of our bill.

We took action after learning the story of Edith Shorougian and her family, who were scammed
out of more than $80,000 by their longtime financial adviser and fear they will never get back the money that was stolen from them. Unfortunately, the vast majority of seniors never see any
compensation after they've been swindled by fraudsters stealing money earned over a lifetime of
hard work. A 2019 Consumer Financial Protection Bureau analysis of financial institution
reports found that senior fraud victims aged 70 to 79 lose on average more than $45,000 -- a
devastating loss for individuals on fixed incomes.

The U.S. Department of Health and Human Services Office of Inspector General warned this
March that COVID-19 scams are targeting Medicare beneficiaries. And a growing number of
media reports, including a Fox News article on April 10, 2020, note that experts and government
agencies are warning that COVID-19 scammers are targeting seniors. We know that seniors are
especially vulnerable to predators due to their accumulated income and assets, potential
cognitive decline, and dependency on others to care for them -- including family members and
trusted friends who have access to their finances. Further, a growing body of research is showing
that changes in seniors' brains make them more susceptible to fraud -- even if they're not
suffering from diseases like dementia.

The Crime Victims Fund reimburses states for 60 percent of funds distributed to constituents
who are victims of crimes, but only for certain eligible items such as medical bills, lost wages
and funeral and burial costs. State compensation programs are payers of last resort and many
have existing caps on the amount of compensation crime victims can receive.
Because senior fraud is not included under VOCA as an expense eligible for reimbursement,
states have no incentive to include senior fraud in their Victim Compensation Programs--and
few do so. However, recognizing the seriousness of this issue, in 2017, the State of New York
enacted legislation allowing vulnerable elderly fraud victims to receive up to $30,000 in
compensation. Importantly, our bill would not mandate that states provide compensation to
senior fraud victims, but incentivize them to do so by including senior fraud as eligible for
reimbursement under VOCA.

It is unconscionable that bad actors actively seek to defraud seniors who have contributed so
much to our country. Robbing them of their life savings during their golden years is a tragedy
and one that has taken on greater urgency as scammers seek to profit off the headlines and
anxiety produced by this pandemic. We urge you to include S. 3487, the Edith Shoroguian
Senior Victims of Fraud Compensation Act, in the next COVID-19 relief package and thank you
for your continued leadership and support on this issue.

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