Litigation + Valuation Perspectives

Demystifying Valuation, Economic Damages + Forensic Accounting

Telephone fraud: beware of the big prize promise

I know an elderly lady who is disabled and in early stages of dementia. Her name is Doris. Doris was the recent victim of a telephone scam.

Doris’ four adult children recently told me that two months ago their mother received a telephone call, out of the blue, from Jamaica. It was from a slick talking guy who said his name was Jack Holiday. Jack proceeded to tell Doris that she was the winner of a $2.2 million sweepstakes prize. He said her name was chosen from a few hundred thousand participants in a magazine contest. Doris could not recall entering the contest but was elated to hear the good news.

Jack said he and the rest of his company’s award team would personally be coming to Doris’ home in Phoenix, Arizona to deliver the prize money. Jack told Doris to keep the matter quiet and to not report it to her family and friends. He said it would make the award to Doris more of a wonderful surprise if they did not know about it until Jack came to Phoenix.

Jack told Doris that before he could process the award, Doris would have to send him funds as a down payment on the income taxes Doris would have to pay to the U.S. Internal Revenue Service because of her receipt of the $2.2 million.

Doris’ daughter became aware that her mother had run up a bill with her cell phone service provider of $1,200. Upon further inquiry the daughter found that most of the charges were due to her mother making calls to Jamaica. Doris’ daughter had a talk with her and Doris finally ‘fessed up to what she was doing. Unfortunately, by this time, Doris’ daughter found that Doris had wired Jack, via Western Union, about $4,000 to apply to her “taxes” on her award.

Doris’ daughter and one of Doris’ sons immediately took her to the police station where they filed a complaint about Jack Holiday and his evil deed. The children explained to their mother that Jack was a scammer, a crook and a very bad person. Doris said she understood. It turned out she understood but didn’t care.

The children had Doris change her telephone number so that Jack could no longer telephone her. Doris then called Jack and gave him her new number. She subsequently gave Jack another $6,000 before the children realized she was still involved with Jack. Her cell phone bill had grown to $1,400.

Doris’ oldest son always prepared her federal and state income tax returns. A few weeks ago he excitedly told Doris that she had a $2,200 federal tax refund coming. Doris was happy. So happy that she tried to wire Jack $1,700 of her refund when it arrived. Fortunately, the funds were returned to Doris’ bank account because of a wire transfer error. Doris’ son, who was also a signer on her checking account, quickly put the tax refund money into another account he established under his and Doris’ daughter’s name. The funds were now protected from Slick Talking Jack Holiday.

In the meantime, the children have turned the matter over to the FBI. The children have told me that the FTC, who is investigating other telephone scam cases, will be given the information about Doris’ plight as well.

As of this writing, Doris is still communicating with Jack. Jack is still trying to get money from Doris. Just last week Doris gave him another $435. Her cell phone bill has ballooned to $1,700 and the cell phone service provider wants Doris to pay immediately.

The children have asked Doris why she keeps trying to give Jack money.“Because he is a nice man,” she replies.

Don Bays CPA/ABV/CFF, CVA