Scammers preying on elders may be trusted advisers

Scammers preying on elders may be trusted advisers



By Thomas Goldsmith

Sometimes crime does pay.

But crime can also catch up to a person, even a North Carolina man who had managed to scam mostly older people out of at least $3.3 million. 

His victims were a group that included his own dad, according to state and federal officials.

These days Joseph Mutter, 52, does his time at Piedmont Central Prison near Salisbury. It’s part of a sentence of at least 16 years handed him by a Forsyth County superior court judge last month following Mutter’s guilty plea to scamming a dozen victims. Prosecutors had charged Mutter with crimes including transferring more than $900,000 from investment accounts of retirees who were 66, 69 and 78.

Through financial good times and bad, cold-blooded defrauders have tracked down and set their hooks in older North Carolinians, many of whom have built savings for retirement after decades of successful careers. Those crimes can range from tricking people on state assistance programs to scamming others with substantial retirement accounts.

A friendly or even familial relationship, old or new, can mean little if it’s kept with a person bent on thievery, Secretary of State Elaine Marshall said during a recent phone interview.

“Don’t put too much trust in the people even though they’re as nice as everything to you,” Marshall said. “Playing upon people’s trust — seniors’ trust or anybody’s trust — is how these things generally take place.

“And that’s all meant to bring down your level of skepticism and elevate your level of trust, which is sometimes misapplied.”

According to the Securities and Exchange Commission, a recent example of profits gleaned from misplaced confidence marked the work of an investment group that preyed on federal employees at or nearing retirement. On March 24, the agency said, a Georgia jury returned a verdict against Jonathan Dax Cooke, formerly a registered representative of LPL Financial. He had faced 2017 charges that he failed to tell buyers of $40 million in variable equity accounts enough about the risks of these products, the agency said.

Gurbir S. Grewal, director of the SEC division of enforcement, issued a statement that said Cooke and the company he co-founded were “liable for fraudulently selling variable annuities to hundreds of federal employees who were at or near retirement age by falsely portraying himself and his company as counselors hired by the federal government to educate federal employees about their retirement benefits.”

The company convinced the retirees to take funds from their federal retirement accounts and roll them into riskier products based on the stock market, the agency said. 

Crime in inner circles

As many as one in 20 older people will go through episodes of financial exploitation, often at the hands of family members or others that they should be able to trust, years of studies have shown. Scammers are going to scam, say those who spend years tracking offenders.

“Yeah, they don’t seem to let things like the emotional heartache of war or COVID to depress them, not one bit,” Marshall said. 

Marshall said evidence of neurological disease such as Alzheimer’s did not specifically emerge during the four-year period in which investigators explored the tracks of Mutter’s crimes. 

COVID brought risk to people with dementia

However, researchers including a Duke University professor published a study in 2019 that showed  even people in the mild or early stages of Alzheimer’s can have impaired ability to handle finances. This and other research show the same result: It can be useful to assess how well people at risk of dementia are taking care of their money.  

“Seniors experience isolation to a higher degree than most of the rest of us on a regular basis,” Marshall said. “Then you add COVID, it just compounded that problem when people couldn’t come see them, couldn’t hug them and look them in the eye and tell if they were appearing distressed or stressed.” 

Investigators from the secretary of state’s securities division pursued the Mutter case along with the U.S. Postal Service inspection service. They did not break out information about the scamming of Mutter’s father, and a person with the same name and age did not respond to calls from North Carolina Health News. 

Marshall said victims, located in Texas, West Virginia and New Jersey as well as North Carolina, were as old as 88 and lost as much as a million dollars in one man’s case. A friendly relationship, old or new, can mean little if it’s with a person bent on thievery, Marshall said.

A finding of fact contained in a state business court ruling showed Mutter siphoned away substantial regular chunks from a retirement fund put in his care by a North Carolina man. The draining of his account emerges in the careful legal language of the ruling.

‘Plaintiff did not become aware’               

“Defendant concealed his misconduct by providing Plaintiff with forged account statements,” it reads. “Plaintiff did not become aware of the falsity of his account statements until December 7, 2017 and did not become aware that Defendant removed funds from the Vanguard Account without his consent until on or about January 2, 2018.” 

In fact, after helping the man set up an investment account in 2014, Mutter submitted an electronic application to Vanguard that gave Mutter power to take out money. According to the court records, he started lifting larger and larger amounts: $25,000 on Oct. 3, 2014, $60,000 on Oct. 23, and $75,000 on Nov. 13. All in all, Mutter siphoned off $294,500 from the man’s account over a two-and-a-half year period. 

At the time of these transactions, Mutter had been professionally involved in advising people on investments since 1993, when he was registered as a broker with a Colorado company for fewer than 30 days, according to the federal database BrokerCheck. He then took jobs in San Francisco and New York before moving to North Carolina in 2000.

Whom will you trust?

According to trial testimony reported in the Winston-Salem Journal, Mutter told at least one client, 76, he was a “man of God” before reducing the man’s holdings of about $400,000 to the point where he sought work in a liquor store.

Some banks and credit unions allow account holders to add a “trusted person” as a contact, someone  the institution can call if questionable withdrawals appear, according to the federal Consumer Financial Protection Bureau. 

“Think about people you know who would be a good fit for this job,” the booklet says. “You should choose someone you trust who is reliable and has your best interests at heart.”

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