Death Rates Rise Among Whites in Middle Age

By Greg Wright

MBA, CFE, CFP®, CLU, ChFC

Certified Fraud Examiner

Certified Financial Planner™

According to a Wall Street Journal Nov. 5, 2015, article, White Americans aged 45 to 54 have a 50% higher probability of death than White Europeans the same age.  The dramatic mortality increase from 2000 to 2013, according to the article, is due to the increased use of drugs, alcohol, and suicides. 

However, the author of the article, Betsy McKay, does not recognize what I believe are the underlying causes of these changes -- the negative impact government has had on middle-aged White Americans.  Because of harsh government regulations and policy, the American middle class has suffered tremendously.  It is being taxed and regulated out of existence to redistribute wealth to the very wealthy and the poor.  

Signatures & Forgery

By Greg Wright

MBA, CFE, CFP®, CLU, ChFC

Certified Fraud Examiner

Certified Financial Planner™

Most criminals convicted of financial fraud are also convicted of forgery.  Sometimes a fraudster’s only conviction is for “forgery.”  When I see a document forgery conviction by itself without another charge, it tends to raise a number of questions. 

Financial crimes are often complex to audit and prove.  Many detectives tend to avoid them.  Prosecutors may secure a forgery conviction to avoid the cost and effort required to understand, and prove a complex case.  You may recall that the famed “Al Capone” was not convicted for bootlegging or racketeering.  Instead, he was convicted of tax evasion.   

By placing our signature on a document, we are implying our agreement with circumstances and information provided by that document.  A signature may be nothing more than an extension of your cursive handwriting, which may have changed over time to such an extent that today it has few, if any, recognizable letters.

Years ago, after joined a financial services organization, I was turned over to an “old timer” for training.  After passing the regulator’s exams, this elderly gentleman was to “show me the ropes” – training that was not part of the examinations I had just completed. 

He explained that there were many papers requiring customer signatures, and it was easy to overlook a form.  When you get back to the office, he explained, and turn in the customer check and paperwork to the backroom officer – a very stern older female would review it for completeness.  If you forgot to have him sign or initial a form in the right place, even if it seemed insignificant, you would be sent back to the customer to have it signed and dated.  Embarrassing for a newbie. 

He said not to worry and that it was easy to forge most signatures.  He proceeded to show me how to trace a signature by placing a document with an original signature on a plate glass window and the document to be forged on top.  The original was placed upside down, and the signature lines of the two documents were aligned.  He suggested the use of a pen with the same color ink.  He had a coffee cup filled with different color: both felt-tipped and ball-point pens for that purpose. 

The type of forging suggested by this old timer is categorized by document examiners as “transmitted light tracing.”

Traced forgeries are generally created by one of three methods: “transmitted light,” “carbon intermediate,” or “pressure indented image.”  Traced signatures are the most frequent type of signature forgery. “Tracing” often employes a broad-tipped instrument such as a felt-tip or even a fountain pen.  This wider ink line serves to hide inconsistencies better than a ballpoint pen.

Here are a few areas document examiners look for:

·        Since no two signatures from the same person are ever totally duplicated, total agreement between two or more questioned signatures is adequate proof of tracing.  Magnification and the use of a black light can help identify signature forgeries.

·        Pen lifts and hesitation marks happen when the pen stops at an unusual point in the writing.  This may take on the appearance of a small gap in the written line where it should not  be expected.

·        Because the creation of forged signatures are simply drawings, tremor lines may be evident when the pen is moving oh so slowly.  This can cause slight changes in direction take place in what should be a fluid-looking line.  The resultant line reflects the “shaking” pen.

·        Normally, when you sign your name, the speed and pressure of signature writing will vary.  However, because the fraudster’s pen is moving slowly rather than the dynamic movement of most genuine writings, the ink line remains constant in thickness.

·        Blunt starts and stops occur when the forger places the pen point in contact with the paper, and then starts writing.  When he is finished with the, he stops the pen and lifts the pen from the surface.  This may cause an blunt start or ending where the pen was placed.  At times this contact is held so long that if the pen ink will wet the paper and migrate slightly

·        Infrequently, most of us have made an error in our signature and we will let it stand, while others will simply “fix” the signature by correcting it.  These “fixes” are usually done without an attempt made on the part of the writer to mask or otherwise hide the correction.  These signature corrections are quite different than the patching that is frequently found in non-genuine signatures.  

Recently, a very successful local stockbroker was accused and fired because of forgery accuations.  He was not prosecuted.  Some industry insiders believe that he was fired because of other non specified reasons.  The employer could make the forgery stick and it caused him to lose his license.  However, he had been in the process of moving his block of business to a competing firm. 

If you suspect that a signature has been forged, seek out a qualified document examiner.  However, a black light (longwave ultraviolet light) can help identify differences in ink and some of the irregularities described above.  

Fire Chief Guilty of Fraud

By Greg Wright

MBA, CFE, CFP®, CLU, ChFC

Certified Fraud Examiner

Certified Financial Planner™

Mark Watson Mug Shot

Almost from the start

Only eight months and one day after his appointment as Speedway Fire Chief, Mark Watson started depositing checks payable to the Speedway Fire Department into his personal bank account.  The account, “Mark Watson dba Speedway F.D.”, was established on Feb. 7, 2011, without the knowledge of the Town of Speedway.

Checks made payable to the Town were mailed in envelopes addressed to the town of Speedway Fire Department. According to town officials, Watson opened all mail addressed to the fire department. 

Over the next four years, until its discovery, Watson deposited $42,982.39 in checks intended for the Town of Speedway including payments for fire protection by the Indianapolis Motor Speedway. 

Funds from this account were not used to benefit the Town or its fire department.  Instead, Watson used the funds for personal purposes including the purchase of a Toyota pick-up truck, credit card payments, and cash withdrawals. 

Just a year after establishing the bank account

In 2012, Watson started using the Town of Speedway credit cards and to issue fraudulent invoices for items of personal use.  These unauthorized purchases included a firearm and holster, a television, two sets of tires, a snow blower, clothing, and lawn and garden items.  The value of these items were relatively minor compared to the diversion of checks payable to the town; but, eventually led to his downfall.  Sometimes it is the little things that lead to a fraudster’s downfall.

Fictitious vendor

Just last year, on August 13, 2014, Watson established a bogus company, “FireProf,” and opened a U.S. post office box in the name of “Mark Watson, FireProf.”    A few weeks later, he presented a purchase order to be paid to FireProf in the amount of $4,491.67 for SCBA repairs.  The voucher was submitted for payment, approved by the Speedway Town Council and a check was mailed to Watson’s post office box.  After Watson’s schemes had unraveled, the uncashed check was recovered. 

Cash Skimming

Firefighter testing fees totaling $3,160 were collected in 2013 by three Town Pension Board members and given to Watson for deposit.  Bank records indicated that these funds found their way into Watson’s personal account. 

In 2013 and 2014, firefighter clothing costing $2,872 was purchased with town funds by Watson.   He sold the clothing to firefighters and kept the cash.  Court records indicated that proceeds from the sale were not remitted to the Town of Speedway and ended up in Watson’s personal bank account.

Mark D. Watson 

Fire Chief Watson

Mr. Watson joined the Speedway Fire Department in 1991 and served in several ranking positions including interim fire chief.  On June 6, 2010, he was appointed Fire Chief. 

New Clerk-Treasurer

On Nov. 1^st, 2013, Monty W. Combs, a Certified Fraud Examiner, became the Speedway Clerk-Treasurer.  He was new to Speedway government.  Combs told me that, while he had not socially interacted with Watson, he found him to be a likable individual.    However, it was the little inconsistencies that appeared to have unmasked Watson’s frauds.

Combs was reviewing a Sam’s Club invoice submitted by Watson for truck tires for Fire vehicle 204.  Combs was new to the job; but, he did not believe that there was a fire dept vehicle with the identification of “204.”  The vehicle described on the Sam’s Club invoice was a Silver 2011 GMC Yukon.  Mark Watson’s personal vehicle was a Silver 2011 GMC Yukon.  This caused Combs to dig further.

Monty Combs, CFE

Combs then questioned Watson about some purchase orders. One of those was a $4,491.67 P. O. dated Sept. 22, 2014, issued to FireProf for scuba gear repair. Combs noted that its address was a Post Office box – a red flag to many auditors. 

Combs told me that he spoke with a vendor requesting several years of purchase records attributed to a credit card issued to Watson.  He found several questionable purchases and called in the Indiana State Board of Accounts (SBOA) requesting an audit review.  Mark D. Watson resigned as Chief on Oct. 27, 2014. 

The SBOA audit began on Nov. 3, 2014.  A “Special Investigation Report of the Fire Department of the Town of Speedway” was filed on July 10, 2015.  The audit period was January 1, 2011, to December 31, 2014. 

Following a further investigation by the Indiana State Police, a Probable Cause Affidavit was filed in Marion County on Sept. 3, 2015, charging Mark Watson with Theft and Official Misconduct. 

Watson pleaded guilty and, as part of the plea agreement, he paid full restitution to the Town of Speedway and repaid the cost of the audit conducted by the State Board of Accounts.  Watson received a sentence of two years on probation. 

Almost one-third of the Speedway firefighters attended former Chief Watson’s sentencing hearing.  He had not been a popular fire chief, and they complained about his management style.  According to Speedway employees, they felt betrayed by Watson.  A copy of his mug shot was posted in the Speedway fire house located at 1410 N Lynhurst Dr. with the word “Thief” written below.

Watson apologized; but, did not offer an explanation for the theft.  Monty Combs, Speedway Clerk-Treasurer, who liked Watson personally, posted a sign in his office – “Trust is not an internal control.”  Combs is up for re-election this November.  The Certified Fraud Examiner is running unopposed. 

According to my research, half of the embezzlers that have gone undetected for long terms are governmental employees.  Too often small governmental units rely on trust and have inadequate internal controls including separation of duties.  Absent the talent and fraud examination training of someone like Mr. Combs, this fraud might have continued undiscovered for many years.  

Pedophiles & “Elder Financial Fraud”

By Greg Wright

MBA, CFE, CFP®, CLU, ChFC

Certified Fraud Examiner

Certified Financial Planner™

Financial fraud is the fastest growing form of elder abuse. Over 20% of Seniors will be victims and it is tough to combat, in part, because it usually goes unreported.  Fraudsters that prey on Seniors often use the same “grooming” techniques used by child pedophiles.

Many people have heard the term "grooming", but most will think of the name only in the context of child sexual abuse.  elder grooming is the adult equivalent to child grooming and applies to any behavior where an older adult is manipulated, so they unwittingly allow exploitation to occur. The fraudster typically belongs to the same affinity group as the victim, and befriends or builds a relationship with the victim to establish a relationship of trust.

An "affinity group" is a group formed around a shared interest or common goal.  These groups may include families, churches, social organizations, ethnic groups, political groups and neighborhood groups.

Not unlike child victims of a pedophile, elderly financial fraud victims are often fearful, or embarrassed by the crime and do not report it. It has been estimated that there are at least five million cases of this financial abuse in the United States each year, but law enforcement learn about only 1 in 25 cases. 

Who are the elder victims of financial fraud?  The victims are those whose defenses are down, including the lonely and the emotionally and physically compromised. Predators are practiced, and superb at what they do. Few get caught. However, those who do get caught, tend to learn from their mistakes, and refine their techniques. 

Elder financial predators bear a striking similar profile to child sexual predators:  89% of child sexual assault cases involve persons known to the child, such as a caretaker or family acquaintance, 29% of child sexual abuse offenders are relatives, 60% are acquaintances from an affinity group, and only 11% are strangers.

Almost all elder fraud pedophiles have come to the attention of insurance or securities regulators and had a history of misdeeds.  They frequently have had their licenses suspended, revoked, had multiple consumer complaints filed against them, have been charged by a regulator, and lack appropriate professional designations. 

In my seminars, I teach Seniors how to use public sources to identify these past “sins” and how to avoid financial exploitation.  The first thing I usually tell my audience is to write down the names of the three most “charming” people they know.  Contact me if you need a speaker for your group.

Grooming Steps:

A predator will identify and engage a victim and work to gain the target’s trust, break down defenses, and manipulate the victim until they get whatever it is they are after. Here are the hallmark steps of grooming.

• The predator may seek out an affinity group to join a group that contains a sufficient number of potential elderly victims.  Churches are frequent targets.
• Next they will identify possible victims by looking for individuals that seem to be vulnerable.
• Then the fraudster collects as much information on the targeted victim as possible. This is often accomplished through casual conversations with friends of the target victim, pastors and leaders of the affinity group.
• Abusers who groom their victims usually claim to have a special connection with the victim. This so-called connection might be emotional, intellectual, sexual, or spiritual. This is often backed up by the predator feeding back part of the target's own background or story, altered to fit the preditor’s back-story, in order to confirm the connection. 
• To exploit without fear of discovery, a financial predator will often condition their victim with shared secrets.  When building this bond of trust, the fraudster will share seemingly personal or private information. The victim is made to believe that they are being trusted with something of value.
• In the end, the bond of secrecy is reinforced with threats, shaming and guilt to keep the victim quiet.
• These are the same techniques used by pedophiles that prey on children.

What Grooming  feels like:

At first, it can feel exhilarating. The predator is accepting of the total you, attentive, sensitive, shows empathy and provides positive reinforcement. Victims can be so overwhelmed by the attention and acceptance; they will often ignore red flags that might alert them that the person who is showering them with the attention is somehow artificial.  The abuser breaks through a victim’s defenses, gains trust, and manipulates them. The victim finds themselves willingly handing over money or assets. In the end, the victim often feels confusion, shame, guilt, and remorse. These emotions are often powerful, and a panic comes with the potential of being exposed for having been a victim. A fool. The victim often becomes depressed or despondent.

What TO Do:

• Be suspicious of charming people.
• Use caution around someone you may have only just met, who pays you too many compliments.
• Learn how to check our your financial advisor.
• Is your financial advisor a crook?

Indianapolis Could Be So in Play

By Greg Wright

MBA, CFE, CFP®, CLU, ChFC

Certified Fraud Examiner

Certified Financial Planner™

Conservative Peggy Noonan, penned an excellent article in today’s Wall Street Journal, “American Is So in Play.”   She is a writer and was an assistant to President Reagan. 

Her thesis is that Trump’s popularity is because of the deep  “estrangement between the elites and the non-elites in America.”  This distrust is shared not only by Republicans, Noonan went on.  Non-illegal Hispanics also distrust the elites of both parties.  Toward the end of her article, she said that “deep down the elites themselves also think the game is rigged.” 

Does Peggy Noonan echo also what it’s like to live in Indianapolis?

Maybe your neighborhood is different; but, this is exactly the way many of my neighbors think. 

My neighborhood is in City-Council District 8 and is mostly Black and Hispanic.  Historically it has been solidly Democratic.  When Councilman Monroe Gray last stood for election, he got two-thirds of the vote without trying very hard.  Most of the votes were straight ticket. 

Our neighborhood members are scattered within an area bordered by Fox Hill, Michigan Road, Grandview and 51^st St.  Many of us use the NextDoor social network to share information to get the word out about a break-in, find out who is the best electrician, complain about pot holes, and keep an eye out for a lost dog.

One thing that concerns all of us is the violence and especially home invasions that happen any time day and night.  We all know that there are far too few police to protect us.  Some complain about the millions of tax dollars that are diverted to the owners of professional sports teams when we need more cops and better roads. 

Some do not want to drive at night or in the rain because of the pot holes that can wreck a wheel or kick your car out of alignment.  Again and again, they complain about  taxpayer money going to support professional sports and not to keep the roads repaired.  When we drive outside Marion County, we see a big difference in pot holes and feel more safe than when at home.  Few go to professional sporting events. 

To many of my neighbors, both the Democratic and Republican mayoral candidates appear to be same-o same-o.  We heard the same promises from Ballard when he ran against what’s his name.  Same-o  same-o. 

Noonan said that Americans “don’t like what they see – corruption, shallowness and selfishness in the systems all around them.”  Some see it in Indianapolis as well.

Every politician promises transparency and to do the “right thing.”  But, someone recently wrote that these professional politicians were “as transparent as a brick.”  You don’t have to go much farther than the Blue Indy scandal to understand that neither the Democrats nor the Republicans nor the ones that profess to be independent are interested in fixing pot holes and hiring cops.  They push money to their already rich pals.  It appears to many that they take their instruction from the political bosses in both parties. 

Noonan closes with, “The elites have no faith in the people, which is new.” 

Then comes a non-politician, “like a rock thrown through a show-room window.”   I know you think that it sounds weird; but, many of my neighbors think that it is a shame that Indianapolis doesn’t have political outsiders running against the elites in both parties.

Maybe, should that rock be thrown, Indy could be “so in play.” 

Ed Young sentenced to four years in prison

By Greg Wright

MBA, CFE, CFP®, CLU, ChFC

Certified Fraud Examiner

Certified Financial Planner™

Ed Young Mug Shot

On August 5, 2015, for committing forgery, insurance fraud, and theft, Mr. Edward Young was sentenced to four years in prison.  Ed Young and his wife, Judith, have a long history of soliciting insurance products through unlicensed or unregistered entities to Indiana citizens.  Similarly, the Young family was previously charged in Ohio of offering insurance products without having an Ohio insurance license.

After researching multiple investment fraudsters, I have concluded that, prior to being arrested, almost all of them had a public record of not being trustworthy, having customer complaints filed with regulators, and having their license suspended or revoked.   If consumers had known the financial advisor’s record, he or she would never have done business with him.  Their retirement nest-egg would still be intact.

In 2011, the Ohio Department of insurance issued a “cease and desist” order to Edward Young, Judith Young and Fortune Financial Group for soliciting insurance products to the Believers Christian Fellowship Church (Pentecostal) in Lima, Ohio.  According to Ohio Dept. of Insurance documents, meetings were held at the church, and the Young’s were accompanied by Indiana insurance agents Messrs. James Beattey and Mark W. Miller, who also represented Fortune Financial Group. 

Judith Young Mug Shot

The Ohio matter was similar to a 2007 Indiana dept. of insurance when Ed Young, Judith Young and their son Greg Young were the subjects of an Indiana cease and desist order.  At that time, the Indiana Department of Insurance had received complaints regarding the Freedom 7 Program, MBA, Inc., and an irrevocable life insurance trust described as the “Final Tithe.”   Church members were the target.       

For over ten years, Ed Young and Judith Young been the subject of numerous actions by the Indiana Department of insurance and Indiana Securities Division.  Earlier this year,  according to regulators,  between the time he was charged and sentenced, Mr. Ed young attempted to set up a life insurance Company in Wyoming.  We may not have heard the last about Mr. Young. 

Alphabet soup of fraudulent professional designations

By Greg Wright,

MBA, CFE, CFP®, CLU, ChFC

Certified Fraud Examiner

Certified Financial Planner™

We hear it almost daily on the radio and read the ad copy that explains: retirement expert helped my parents, he can help seniors like you, specializes in retirement planning.   

 Senior citizens are the focus of stockbrokers and insurance agents because they own well over half of the financial assets in America.  Those assets are becoming liquid as the baby boomer generation retires and move huge amounts of money from corporate 401K plans into personal IRAs and annuities.

The financial services industry has been gearing up to help seniors move that money by designing products and training its salesforce.  They have been very creative in convincing seniors about its representatives’ expertise by incorporating professional appearing designations on their salesmen’s business cards, stationary, and presentations.  Some of these professional designations are of small value and others are simply bogus. 

Unfortunately, some seniors get lulled into believing the senior alphabet soup next to their financial advisor’s name or his marketing materials really means that the person has special skills when it comes to advising seniors. 

State securities regulators have been very worried about this, according to the past president of the North American Securities Administrators Association. "We are taking a growing number of administrative actions against people using designations as part and parcel of fraudulent securities activities, especially with older people."

Professional certifications arose decades ago as a way for firms in various industries to identify qualified practitioners.  In the financial realm, many well-established credentials, including the certified public accountant, chartered financial analyst and certified financial planner designations, require long study, demand continuing education and enforce strict codes of ethics. In order to become a CPA, for example, one must pass a 14-hour CPA exam.

Many newer credentials, however, require comparatively little effort on the part of the students and little or no continuing education.  Some are no better than a certificate you might find as a prize in a cereal box.

A few weeks ago, Massachusetts regulators fined LPL Financial charging that they misrepresented the qualifications of its representatives when working with older investors – seniors.  Apparently an LPL reprehensive referred to himself as a “Retirement Income Planning Specialist.”  The regulators said that LPL had even approved an offending title on a broker’s business card more than once.

What is a senior designation?

There are over 150 financial designations currently in use.  Two specifically identified as offensive by others and not allowed to be used in Indiana in conjunction with the senior market: Certified Senior Consultant and Chartered Senior Financial Planner. 

If you want to check out these two or the alphabet soup next to your financial advisor’s name, a good place to start is the Financial Industry Regulatory Authority website.  There you can find out the experience requirements, testing, continuing education, how to process complaints and the accreditation organization (if any),

To address the senior designation issue, the North American Securities Administrators Association, a group of state securities regulators, and the National Association of Insurance Commissioners, a group of state insurance commissioners, both devised a similar model law for states to follow in regulating professional designations that relate to older investors – seniors.  It is called the Model Rule.   

Most states, including Indiana, have adopted the regulations.

These regulations prohibit the uses of senior-specific certifications and professional designations except for seven that have been approved by two certifying organizations and the U.S. government.  The rules deem it unfair and deceptive for an insurance agent or stockbroker to use a professional designation that implies in such a way as to mislead the purchaser that the person has special training in advising or servicing seniors.

This rule does not apply to certifications or designations that have been accredited by the American National Standards Institute, or the national Commission for Certifying Agencies, or an organization on the list of Accrediting Agencies Recognized for Title IV purposes.

Seven professional designations that meet these criteria are:

1.  Certified Financial Planner –CFP

2.  Certified Investment Management Analyst – CIMA

3.  Accredited Retirement plan consultant –ARPC

4.  Certified Medicaid planner – CMP

5.  Certified Retirement counselor – CRC

6.  Certified retirement Financial Advisor – CRFA

7.  Certified Senior Advisor – CSA

However, as much as these regulations appear to be a good idea, according to Indiana regulators, no one has been found to be in violation of these regulations.  Maybe no one has filed a complaint.  Perhaps the regulators don’t listen to the radio.