Putting a 'Choke' hold on seniors

A SCAM ARTIST stops by your 92-year-old neighbor's home and repeatedly convinces her to give him $200 on each visit for a "can't lose" investment. Hearing about it, the local police persuade the scammer to end his fraudulent behavior, but then the city council orders the police to stop their interference with "free market" decisions.

True?

Yes.

Congress is about to vote on terminating a successful Department of Justice task force known as "Operation Choke Point" that protects our seniors from comparable financial fraud conducted on a national scale by a number of banks complicit with fraudsters.

Elderly abuse - financial, physical and emotional - has been called the "crime of the 21st century," an epidemic that is expanding at an alarming rate in Pennsylvania. With the second highest percentage of seniors among states, the elderly Pennsylvanian who recently had $85,000 drained from his bank accounts as he slipped into dementia is far from an isolated incident.

I saw it in my district as a congressman when Wachovia Bank allowed fraudulent telemarketers to knowingly use the bank's accounts to steal millions of dollars from elderly victims throughout Pennsylvania; a number of them were my constituents. A civil court ordered Wachovia to provide restitution to the victims, but such bank-abetted fraud steals $3 billion a year from seniors.

Most banks are on the alert for such fraud, but Operation Choke Point was finally set up last year to crack down on senior financial abuse because there are those who abet billions of dollars of harm to vulnerable seniors. A classic military operation in terms of efficiency and effectiveness, it watches the "mother ship" - the banks that provide scammers access to the accounts of their seniors - rather than ineffectively pursuing the thousands of individual scam artists that can quickly "go to ground."

By focusing on where the money is, the DOJ holds recalcitrant banks accountable that are knowingly aiding and abetting scammers in thousands of obviously fraudulent transactions from seniors' accounts. While banks are required to look out for and report what they consider suspicious transactions, a number had adopted a practice of turning their heads - or, as one banking insider calls it, "don't ask, don't tell" - since this illegal activity is also very profitable for banks.

Operation Choke Point now targets Internet, telemarketing, mail and other forms of mass-market fraudulent transactions to stop banks from turning a blind eye to dubious transactions from hoodwinked seniors. As a result, it has had a chilling effect upon scammers and their third-party processors by cutting off their access to a banking system that is being held accountable for abetting consumer fraud.

Successes have included Four Oaks Bank & Trust, of North Carolina, which reached a settlement after being complicit with another bank in processing $2.4 billion in dishonest consumer transactions. Closer to home, the First Bank of Delaware paid millions in fines and restitution after the DOJ filed civil charges that the bank had knowingly processed payments on behalf of scammers.

Easy? Not when American Bankers Association CEO Frank Keating sums up the "not our problem" attitude toward adhering to principled standards in this way: "When you become a banker, no one issues you a badge, nor are you fitted for a judicial robe."

And there's the rub. Influential in the corridors of the Senate and Congress, powerful interest groups, such as Keating's, which represent financial institutions and third-party processors, have convinced a group of senators, including one in Pennsylvania, to quietly sponsor legislation that would cut off all funding for Operation Choke Point. There is a similar House measure. The vote on the Senate amendment will soon occur when the Senate takes up the Commerce, Justice, Science and Related Agencies Appropriations Act.

It would be a shame if that amendment prevailed, for studies show that one in four elderly Americans have been victims of financial fraud, a number that will assuredly increase as our senior population grows from 40 million today to more than 60 million by 2030, particularly if Congress ends one of the few programs that has worked to protect our parents and grandparents.

Maybe that is what we should keep in mind: These are our family members, and all of us will be in the "senior" category someday. If members of Congress agree, they should let that influence their vote - not special-interest groups.