Elder Fraud: A Focus for the SEC and DOJ
SEC Enforcement has been focused on the Main Street investor for years. The results of that focus, which includes elder fraud, has been increasing numbers of offering fraud cases and actions which involve investment advisers.
The Department of Justice also has initiatives centered on elder care and fraud. On October 20, 2020 the Department issued its Annual Report to Congress on its Work to Combat Elder Fraud and Abuse. The report discusses the Department’s Elder Fraud Sweep. As a result of this effort over 400 defendants were charged in cases tied to over $1 billion in losses. The Department also launched the National Elder Fraud Hotline, managed by the Office of Victims of Crimes. The Report also discusses the Nursing Home Initiative which is designed to investigate and prosecute nursing homes that provide grossly substandard care to their residents (here).
A recent case concluded by the U.S. Attorney’s Office in the Southern District of New York that focused on elder fraud illustrates the type of cases being brought and the potential harm — U.S. v. Ziskind, No. 1:18-cr-00375 (S.D.N.Y.). That case named as a defendant, Vladimir Ziskin, a former registered representative.
Mr. Ziskind was sentenced last week to serve 28 months in prison for selling worthless stock to largely elderly clients. He had previously pleaded guilty to one count of securities fraud and one count of securities fraud conspiracy.
The charges were based on a fraudulent scheme that began in 2014. In connection with the scheme Mr. Ziskind and/or his co-defendant used an alias to telephone elderly clients and convince them with fabricated claims to invest in worthless stock. For example, at times the potential investors were told that a particular firm was about to conduct an IPO, suggesting it was a good investment. The statements were false. Similar fraudulent pitches were recorded. In addition to the prison term, the Court directed Defendant Ziskind to pay a forfeiture money judgment in the amount of $732,018. The DOJ report to Congress chronicles numerous other actions targeting elder citizens.