Jeff Gelles: Shameless accounts of 'granny fraud'

The Cheltenham woman is 81, a retired writer once employed in publishing. She has a degree from Temple and, as best I can tell from a few conversations, all her wits about her. Frankly, she sounded sharper than plenty of people half her age, which makes her story all the more disturbing.

The woman was the victim in September of an ugly crime known as "grandparent fraud" or "granny fraud," and willing to share her story if I left out her name. I agreed because I understood her embarrassment, and because her story offers a cautionary tale to other potential victims.

She was responding to last Sunday's column about MoneyGram, which turned a blind eye to some agents' involvement in granny fraud and other wire-transfer scams. To avoid criminal charges, the Texas company has agreed to pay $100 million to compensate victims. Prosecutors know of more than 63,000 in the years covered by the settlement, ending in 2009, and believe there were at least five times as many.

"I was one of the grannies," the woman told me. "And I would like those people caught. They are slick, they are smart, and it's too bad they don't use their smartness for something more worthwhile."

Unfortunately, the MoneyGram settlement, like earlier crackdowns, won't put a stop to these cons. Even without collusive agents, wire transfers remain the easiest way to steal money at a distance.

Last week's column didn't make the mechanism of these cons fully clear, so let me try here. In each case, the key is that the victim is lured to send a wire transfer right into the hands of the fraudster.

The victim I described last Sunday, Karen Luther, lost nearly $2,400, after cashing a $3,000 check that arrived with instructions about testing Walmart as a mystery shopper. The last step directed her to wire leftover funds at the store's MoneyGram kiosk, leaving her on the hook when her credit union determined she'd unknowingly cashed a counterfeit check.

Thankfully, knowledge is power. Ben Sahijwani, a West Chester engineer, said Luther's story helped him avoid falling victim last week as he tried to sell two mothballed computers on Craigslist.

The supposed buyer overnighted a bank check for $3,650, far more than the $250 Sahijwani had sought for the old Macs. Then he e-mailed and called Sahijwani with an urgent plea: His accountant had made a bad mistake. Could Sahijwani please return the difference via a Western Union wire transfer? Sahijwani wisely balked.

What makes granny fraud especially heinous is that its victims aren't even engaged in commerce. They're not looking for money - they give it up willingly, driven by the illusion of a family member's urgent need.

Betty J. Mausteller was so concerned that her grandson Gary needed help last year she went to her bank to borrow the $2,500 she thought he needed to get out of jail in Canada.

The con ended when Gary's father learned about it and got on the phone with a purported member of the Royal Canadian Mounted Police, Ronald Mausteller told me last week. But even he was baffled by some of the personal details this Dudley Do-Wrong seemed to know - such as that Gary, a hospital worker, sometimes travels far and wide to play competitive pool.

"How they guess at things, I don't know. But they sure knew how to get to my mother," Mausteller said of the Catawissa, Pa., woman, who died last month.

Sadly, that's one question I can answer, after interviewing victims and investigators over the years.

For the Cheltenham woman, those days in September passed as though she were caught in a fever's grip. But the fraudsters were plainly just improvising off a script.

One key in these cases is that victims unwittingly provide details that make the con more believable - say, by offering a name when they are addressed as "Grandma" or "Grandpa" during an initial phone call that seems like a bad international connection. That's what happened to her, too.

"He said, 'Oh, it's me. I'm in so much trouble.' I said, 'Jonathan, is that you?' I walked right into it," she recalled.

She asked about his fiancée, and Not-Jonathan wove her into the script - they were both in trouble because marijuana had been found when their taxi was stopped for speeding. The urgent story was enough for the woman to send $3,375 in two transfers, supposedly to help with court costs and hiring a U.S. lawyer.

The scammers appear to be adjusting to the stepped-up antifraud efforts. For instance, they sent the Cheltenham woman to MoneyGram first, then to Western Union, so a return visit wouldn't set off alarms. And they advised her, " 'They will ask questions, but you just tell them it's personal, and it's none of their business.' "

The fever broke when they pushed for a third transfer, after Not-Jonathan ended a call as she probed for specifics.

"Never did I think of calling his parents, or calling him on his cellphone" until that last request, she said. "All of my good sense went out the window. I just wanted him to be safe, and not to lose his job - that's all I cared about."

Instead, she lost her shirt, a serious financial hit for someone largely reliant on Social Security. Though frustrated by her ineligibility for compensation from MoneyGram, she tries to stay upbeat:

"I told myself I couldn't stop them from getting my money, but they can't take my health."