[Senate Hearing 116-539]
[From the U.S. Government Publishing Office]
S. Hrg. 116-539
VETERAN SCAMS: PROTECTING
THOSE WHO PROTECTED US
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HEARING
BEFORE THE
SPECIAL COMMITTEE ON AGING
UNITED STATES SENATE
ONE HUNDRED SIXTEENTH CONGRESS
FIRST SESSION
__________
WASHINGTON, DC
__________
NOVEMBER 6, 2019
__________
Serial No. 116-15
Printed for the use of the Special Committee on Aging
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://www.govinfo.gov
______
U.S. GOVERNMENT PUBLISHING OFFICE
47-207 PDF WASHINGTON : 2022
SPECIAL COMMITTEE ON AGING
SUSAN M. COLLINS, Maine, Chairman
TIM SCOTT, South Carolina ROBERT P. CASEY, JR., Pennsylvania
RICHARD BURR, North Carolina KIRSTEN E. GILLIBRAND, New York
MARTHA McSALLY, Arizona RICHARD BLUMENTHAL, Connecticut
MARCO RUBIO, Florida ELIZABETH WARREN, Massachusetts
JOSH HAWLEY, Missouri DOUG JONES, Alabama
MIKE BRAUN, Indiana KYRSTEN SINEMA, Arizona
RICK SCOTT, Florida JACKY ROSEN, Nevada
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Sarah Khasawinah, Majority Acting Staff Director
Kathryn Mevis, Minority Staff Director
C O N T E N T S
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Page
Opening Statement of Senator Susan M. Collins, Chairman.......... 1
Opening Statement of Senator Robert P. Casey, Jr., Ranking Member 3
PANEL OF WITNESSES
Benjamin Wells, Volunteer, Vet2Vet-Maine, Portland, Maine........ 5
Laverne Foreman, Army and Air Force Veteran who was Scammed by a
Fake Veteran's Charity, Herndon, Pennsylvania.................. 7
W. Dewayne Richardson, DSW, District Attorney, Fourth Circuit
Court, District of Mississippi, Indianola, Mississippi......... 9
Carroll Harris, Acting Inspector in Charge, Communications,
Governance and Strategy Group, United States Postal Inspection
Service, Washington, D.C....................................... 11
APPENDIX
Prepared Witness Statements
Benjamin Wells, Volunteer, Vet2Vet-Maine, Portland, Maine........ 37
Laverne Foreman, Army and Air Force Veteran who was Scammed by a
Fake Veteran's Charity, Herndon, Pennsylvania.................. 43
W. Dewayne Richardson, DSW, District Attorney, Fourth Circuit
Court, District of Mississippi, Indianola, Mississippi......... 47
Carroll Harris, Acting Inspector in Charge, Communications,
Governance and Strategy Group, United States Postal Inspection
Service, Washington, D.C....................................... 50
VETERAN SCAMS: PROTECTING
THOSE WHO PROTECTED US
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WEDNESDAY, NOVEMBER 6, 2019
U.S. Senate,
Special Committee on Aging,
Washington, DC.
The Committee met, pursuant to notice, at 9:30 a.m., in
Room 562, Dirksen Senate Office Building, Hon. Susan M.
Collins, Chairman of the Committee, presiding.
Present: Senators Collins, McSally, Rubio, Hawley, Braun,
Rick Scott, Casey, Gillibrand, Blumenthal, Jones, Sinema, and
Rosen.
OPENING STATEMENT OF SENATOR
SUSAN M. COLLINS, CHAIRMAN
The Chairman. This hearing will come to order.
Good morning. Next week, Americans will honor our Nation's
veterans who have paid the price for our freedom in times of
conflict and served as our shield in times of peace. Today
nearly 20 million Americans have earned the title of
``veteran.''
I am proud to say that Maine is home to more than 114,000
veterans, the second highest percentage in our entire Country.
We owe them such a great debt. The gratitude we express in
words on Veterans Day can repay this debt only in small
measure. A truly grateful Nation must match its words with the
actions.
As we will learn today, one issue that calls for our
immediate action is to fight a newer enemy facing our veterans,
and that is those relentless con artists who seek to rob them
of their life savings and defraud them of the benefits they
have earned in service to our Country.
Often, veterans fall victim to the same scams that this
Committee has highlighted in recent years, such as the IRS
imposter scam, the grandparent scam, the romance scam, the
Jamaican lottery scheme, and identity theft. Veterans are
disproportionately affected by these schemes, but there is also
troubling evidence that some fraudsters are deliberately
targeting veterans, and they are structuring their scams in
order to reach our veterans.
For example, in a case that we will hear more about today,
fraudster Tammi Palasini set up an entity called the Veterans
Pension Planners of America. Sounds legitimate, does it not? It
was not. She used it to operate what is often referred to as an
``aid and attendance scam.'' Her pitch was that she could help
veterans diversify their assets to get beneath the threshold to
qualify for VA benefits if they released their assets to her so
that she could invest them on their behalf. Instead, she stole
their assets and spent their money. All told, Ms. Palasini
defrauded 78 victims out of $2 million dollars before she was
arrested and convicted on multiple State and Federal charges.
Scammers also exploit public support for those who have
served our country by creating fake charities that supposedly
raise money for needy veterans but instead funnel funds from
generous contributors to greedy fraudsters.
In one recent case, a con artist operating out of Michigan
was convicted of stealing nearly $200,000 from 36 victims who
thought they were donating to charities benefiting veterans.
Not only did the veterans never see a dime of this money, the
fraudster added insult to injury by stealing the victims'
personally identifiable information to commit identity theft.
Fortunately, through the very good work of the U.S. Postal
Inspection Service, this criminal is now behind bars.
Other criminals promise to help veterans claim benefits
from nonexistent Government programs, or they charge
inappropriate fees for helping veterans apply for the benefits
they have earned, or they exploit the sense of comradery that
veterans feel for one another to gain their victim's trust and
then swindle them out of their savings.
These regrettably are not isolated examples. Surveys show
that more than three-quarters of our veterans have been
contacted by con artists. Given these facts, what action should
we take to protect our veterans?
Certainly, the cases we will highlight in this hearing show
the value of aggressive prosecution. That sends a real message
to other criminals out there that they will be pursued, they
will be caught, and they will be brought to justice.
As this Committee has often noted, many con artists operate
offshore, beyond the reach of our State and local law
enforcement, and some veterans are simply too embarrassed to
report that they have been scammed, although they should not be
because it can happen to anyone.
Instead, we must find ways to protect our veterans from
scams before they become victims. Education is one way. That is
one of the reasons we are holding this hearing today. Another
is to build on the comradery veterans have for one another by
bringing them together to provide another set of eyes.
The non-profit Vet2Vet Maine program shows how the trusted
judgment of a fellow veteran can stop a scam before it starts.
Before closing, I want to note the recent GAO study that
identified actions that the Veterans Administration can take to
better protect veterans from aid and attendance scams.
According to GAO, the VA receives reports of potential fraud or
exploitation, but it does not analyze this information to
assess the prevalence of scams, inform its outreach efforts, or
to help law enforcement pursue these criminals.
I believe that the VA should take a leading role in this
fight. The Ranking Member and I, as well as other members of
this Committee, will be writing to the Secretary of the VA to
ask what steps the Department is taking to assess the risk
posed to our Nation's veterans and what can be done to protect
them from fraud.
As Veterans Day approaches, we remember all those who
served, not just by honoring their service through our words,
but also by the actions that we take. Veterans and their
families have a right to expect that the Nation they served
will fight to protect them from unscrupulous individuals. As
the AARP says in its bulletin, ``They protected us. Now it is
our turn.''
I am now happy to turn to our Ranking Member, Senator
Casey, for his opening statement.
Thank you.
OPENING STATEMENT OF SENATOR
ROBERT P. CASEY, JR., RANKING MEMBER
Senator Casey. Chairman Collins, thank you for holding this
important hearing, especially as we prepare for Veterans Day.
I am pleased, as I know we all are, that we are joined by
three veterans, one of whom is an active reservist, on this
panel today. We want to thank each of you for your service to
the Country and grateful for your testimony today.
Veterans Day is only days away, and it is a day when we
honor those who served our Country, not only in war, but also
in peace and it is a reminder of our abiding responsibility to
serve them, to serve them in return.
President Lincoln outlined a simple but vitally important
mandate when it comes to the care that our veterans are owed:
``That we must care for him who shall have borne the battle and
for his widow and his orphan.''
Way back in 1991, my father was taking the oath of office
as Governor, it just happened to be the day before the invasion
of Iraq when our soldiers were heading into combat, and at that
time, he said, and I am quoting, ``We pray for them and for
ourselves that we may be worthy of their valor.''
Being worthy of their valor, if you are a legislator, if
you happen to be a Member of Congress, if you are going to
prove yourself worthy of their valor, you ought to prove it.
You ought to prove it by your actions.
Here in the Senate and the Congress overall, we have the
opportunity and the ability to demonstrate that we are worthy
of their valor by ensuring veterans receive every single
benefit that they are owed and even more, and when we learn of
barriers to those benefits, we must work to overcome those
barriers.
That is why I am fighting so hard to hold the Department of
Veterans Affairs accountable for providing every veteran access
to information about their VA benefits.
My legislation, the VA Website Accessibility Act, which I
hope we can pass by the end of this year, would get us one step
closer to comprehensive accessibility for veterans. It is why I
am also fighting to ensure that caregivers who watch over our
veterans every single day are supported and given respite.
The Supporting Veteran Caregivers Act would ensure veteran
caregivers cannot be arbitrarily kicked out of the VA
Caregivers program. As we will discuss today, it is why
Chairman Collins and I wanted to hold this hearing, to ensure
that not one more veteran--not one more veteran loses one more
penny to a scammer, a schemer, or a con artist, so we must not
stop with just the hearing.
We know that 78 percent of veterans reported receiving a
scam attempt related to their veteran status, almost eight out
of ten. If we are to be worthy of the valor of our veterans,
this number should be zero, not 78 percent. It should be zero.
A recent report from the GAO found that the VA lacks a
central clearinghouse for soliciting and collecting information
on potential financial exploitation of veterans receiving
pension benefits. To say this is troubling is an
understatement.
The GAO provided the VA with clear recommendations for
addressing this problem, and now I am quoting, ``systematically
solicit and collect information on potential financial
exploitation'' and ``assess this information to address plans
to address the potential exploitation of veterans receiving
pension benefit.''
Instead of working to implement the recommendations, the VA
is putting in place a process that the GAO claims would ``not
fully address the underlying issue.'' I think they are being a
little charitable there in their assessment of what the VA is
doing in response.
This is totally unacceptable. That is why we are sending a
letter--members of this Committee, Chairman Collins and I and
others--to find out more about this decision and also why the
VA is not doing more to combat scams against veterans.
As we will hear today, in order to put an end to the
predatory practice of scammers, scammers of the worst kind who
prey upon those who have served, there needs to be an all-
hands-on-deck approach. We need to find a way to stop these
scammers from getting through phone lines. We need to be sure
that people are educated about how to avoid becoming victims of
a scam. There must be a place to report scammers, whether that
is the Department of Justice, the Federal Trade Commission, the
VA, or right here at the Aging Committee by way of our Fraud
Hotline. We need to ensure that prosecutors have the tools they
need to go after these criminals and keep them behind bars.
I am certain that our hearing today will touch upon all of
these topics and more, but it is unconscionable to me that
someone would stoop so low as to steal money from someone who
agreed to sacrifice so much for our Country. It is also
unconscionable to me and I know members of this Committee that
someone would stoop so low to pad their own pockets by spewing
a tale of caring for veterans, when they are doing nothing of
the kind.
Chairman Collins, this hearing could not be more important.
We thank you for holding it, and we look forward to the
testimony of our witnesses.
The Chairman. Thank you, Senator Casey.
I want to acknowledge that Senator Braun and Senator
Blumenthal have joined us, and we are now going to turn to our
panel of witnesses.
Our first witness is Ben Wells from Portland, Maine. Mr.
Wells is an Air Force veteran who participated in Operation
Enduring Freedom. He flew 35 combat missions, earned an Air
Medal, and was honorably discharged in 2013. He then had the
wisdom to move to the great State of Maine, where he became
involved in the Vet2Vet program, a local nonprofit that matches
veterans for companionship, mentorship, and other assistance.
I will now turn to our Ranking Member to introduce our
second witness.
Senator Casey. Thank you, Chairman Collins.
I am pleased to introduce LaVerne Foreman, who is at our
witness table today, all the way from Herndon in North
Cumberland County. Now, that is a pretty good ride from here.
LaVerne, we thank you for making the trip, and we are grateful
you are willing to be with us.
LaVerne served in the U.S. Air Force, the U.S. Army
Reserve, as well as the National Guard. He later worked as a
civilian employee for the Army. He is here today to share with
us what happened to him a few years ago when con artists stole
money from him claiming it would go to a veterans organization.
LaVerne later learned that there was no organization. He
reported what happened, and it is possible that he will be able
to help the prosecution of the scammers.
I would also like to welcome LaVerne's wife, Doris, who is,
I think, over his right shoulder, who is with us today, his
daughter, Terry, and son-in-law, Jeffrey, who are also here.
We are all so grateful, LaVerne, as we are to all of our
veterans today, and we hope every day that we are grateful for
your service but especially for taking the time to be here.
Thank you.
The Chairman. Thank you.
Our next witness will be Dewayne Richardson, the District
Attorney for three counties in Mississippi. He has been a real
leader in combating these scams. First elected at the tender
age of 30, one of the youngest DAs in the State's history, Mr.
Richardson later became the first African American to serve as
president of the Mississippi Prosecutors Association.
Finally, last but certainly not least, we will hear from
Inspector Carroll Harris, the acting Inspector in Charge of the
Communications, Governance, and Strategy Group at the United
States Postal Inspection Service. Inspector Harris is also a
lieutenant colonel in the U.S. Marine Corps Reserves, who has
served in Iraq and Kuwait and was awarded the Navy and Marine
Corps Commendation Medal. He now leads Operation Protect
Veterans for the Postal Inspection Service and will discuss its
efforts to combat fraud targeting our veterans.
Mr. Wells, we will begin with you.
Thank you all for being here.
STATEMENT OF BENJAMIN WELLS,
VOLUNTEER, VET2VET-MAINE, PORTLAND, MAINE
Mr. Wells. Thank you, Chairman Collins, Ranking Member
Casey, members of the Committee. Thank you for having me here.
It is an honor to speak about this issue.
As you said, Senator Collins, I was an Air Force veteran. I
got out in 2013 and relocated to Maine in 2014. Upon arriving
there, I wanted to continue my dedication to service, and I was
looking for opportunities to volunteer while I applied to
graduate school. I found Vet2Vet Maine, a simple internet
search, and I liked what they had to say. They offered
companionship for isolated veterans. Senator Collins indicated
that there is a significant number of veterans in the State.
What I would also like to emphasize in the State of Maine is
that there is a significant number of elderly men and women in
the State, and veterans are not exception.
What Vet2Vet Maine seeks to address is the isolation of
those veterans, first and foremost, but also connect them with
benefits that they likely qualify for and have not been
receiving.
When Vet2Vet contacted me, I went in, and they gave me a
background check and got me trained up and connected me with a
veteran who was in his 80's. He was a Korean War Air Force
veteran who was a maintainer on jet aircraft.
Over the course of several weeks, I was in his house once a
week meeting with him and his wife, having conversation,
coffee, taking him out to lunch, getting him out of the house.
It was clear to me that they were isolated. They lived in
Windham, Maine, which is not a metropolitan area. I was able to
have a good connection with them, and I became aware that he
had never, in 60 years of being out of the military, been
connected with the VA in any way.
I also became aware that his wife had contacted the Vet2Vet
Maine program as a way to get respite care potentially and
maybe in-home care, as he was in declining health. He had
significant health problems, including physical issues, chronic
pain, and diabetes. At the time that I saw him, they were
spending hundreds of dollars on diabetes medication alone and
living off of a very small pension from a telecommunications--
his work in telecommunications and his Social Security
benefits. That became my first order of business is to try and
get him connected with the VA and get him the care, medical
care, potentially pharmaceutical care, that he not only
qualified for and deserved but really, really needed.
In the process, I was able to help them fill out the
paperwork. I contacted the Vet2Vet Maine program to get him a
case manager and make them aware of some of his needs in the
home and see if there are other organizations that could help
them out.
In that process, she continued, as paperwork was slow to
process, as it always is. She continued to reach out. She saw
an ad in the newspaper--I think it came with the coupons--for a
program that was advertising free in-home care and respite care
for veterans. Free sounds really good to a person on a fixed
income, so she contacted this organization.
She had the foresight to also reach out to me to sit in on
this conversation. I accepted. The nature of this was two
gentlemen showed up to the house offering free respite or in-
home care to them. Their sales pitch was that what they were
going to do is they were going to assist them in obtaining a
pension from the VA, and that would also allow them access to
the Aid and Attendance Program, as you previously mentioned.
What they wanted and what struck me, sort of the first red
flag in this situation, was how they were going to finance
this, and they wanted my veteran to open up a separate checking
account that they had draft rights on so they could auto-draft.
The VA pays you direct deposit. They were going to auto-deduct
whatever pension and benefit that they got.
That is not out and out illegal or anything, but there was
no conversation as to why that existed instead of regular
payment methods.
I started to ask questions. They then continued and said
how they were going to get him to qualify the means test, which
all these pension of benefits are means tested, and he was
slightly over, and at which point, he started to describe a
method that they could report medical bills to the VA to lower
their total income and pass a means test. That is fine, except
that even with medical bills, even with the hundreds of dollars
in insulin, they were not going to pass it.
He suggested that they employ, in air quotes, their
daughter as a medical aide, which she was not qualified,
trained, or certified in, to do things like filling their
prescriptions over the phone or going and picking up
prescriptions and this sort. They could pay her, which they
were not going to, a stipend, and then put that into their
accounting. The fuzzy math is where I really threw down that
this was not a good idea.
Luckily, they trusted me. I said, ``You really should not
do this,'' and they were able to avoid the scam. They ended up
going through the regular process. They got benefits. They got
in-home care and respite care through, I believe, the VA and
some other organizations. Ultimately, he was moved to hospice,
and then he passed. At least in the later stages of his life,
he had that care, and it did not put significant financial
strain on the veteran.
Thank you.
The Chairman. Thank you so much for intervening and caring
enough to do so. I just cannot imagine what the final years of
life would have been for this couple if they had not followed
your advice. I am sure that they would have lost everything
that they were getting that was in that separate checking
account.
Mr. Foreman?
STATEMENT OF LAVERNE FOREMAN, ARMY AND AIR FORCE
VETERAN WHO WAS SCAMMED BY A FAKE
VETERAN'S CHARITY, HERNDON, PENNSYLVANIA
Mr. Foreman. Chairman Collins, Ranking Member Casey,
members of the Committee, I thank you for inviting me to
testify here today. It is an honor to be here and talk to you
about veterans scams.
My name is LaVerne Foreman, and I am 82 years old. I live
in the Herndon area in Pennsylvania. I am retired both from the
Civil Service as well as the military, having served in the Air
Force, the Army Reserves, and the Army National Guard. I am
proud to be a veteran. For the most part, people thank me for
my service. It never occurred to me that someone would be so
cold-hearted to make a call and claim to care for veterans
when, in reality, all they are doing is lining their own
pockets. Five years ago, I learned how reckless they can be.
When I received a phone call from Senator Casey's office
inviting me to testify before you today, I was pleased to
accept the invitation an share with you what happened. It is
not easy for me to talk about this, being scammed. What I am
doing today is an extension of my service. I feel a sense of
responsibility to warn others who served and to be vigilant
against scams.
Let me explain. In September 2014, I received a call from
an organization, Disabled and Paralyzed Veterans Fund, or DPVF,
requesting a donation. I was told in the conversation that the
organization was dedicated to helping disabled and paralyzed
veterans. It raised funds to support VA hospitals and end
veteran homelessness. I have donated to similar organizations
in the past because of my concerns for and the sensitivity of
my peers.
I pledged at that time to send a one-time donation to DPVF
for $20. However, when I received the pledge letter, the
organization that they sent me, it showed that I had pledged
$25. I thought this was odd. However, rather than arguing with
them, I sent the $25, as listed.
The following year in 2015, DPVF called me again to request
a donation. I pledged to give an amount that was given
previously. Again, when I received the pledge letter, it was a
few dollars more than I had pledged on the phone, this time
$35. I grew even more suspicious but believes it was just the
way of fundraisers trying to get more money.
I tried calling the organization in Washington. They listed
a Washington, DC, telephone number, but it was of no help. I
ended up writing a letter to them to explain that I had agreed
to a lower amount and that I questioned their approach. I
enclosed the check for the $35. I did not want to get into an
argument, and I asked them at that time to remove my name from
their contact list. I did not want to hear from them again.
In February 2016, when I received my statement from my
credit union, I noticed a check listed with a number that is
not within the number sequence of my checks. I thought it was
strange. I called my credit union, and they confirmed that it
was a remotely generated check from Disabled and Paralyzed
Veterans Fund.
I was kind of shocked that they must have made a copy of my
check and kept the routing and account number information. I
had not spoken to this organization or sent a recent donation,
and I realized I was scammed.
There are a lot of legitimate organizations, veterans
service organizations, VSOs, like Paralyzed Veterans of
America, Disabled American Veterans, but I soon realized that
there is no such organization as Disabled and Paralyzed
Veterans Fund.
At that point, I reported this matter to the Pennsylvania
Attorney General's office. I was later contacted by the U.S.
Postal Service and was glad to hear that there is an
investigation, and that there will be some kind of action taken
against this organization.
I know that I can be considered one of the lucky ones. I
did not give the scammer a lot of money, and I noticed the
fraudulent check immediately. I know not everybody is as lucky
as I am.
These phony organizations and the people who steal money by
pretending to help veterans must be stopped. I never believed
that anyone would stoop so low as to steal money and benefits
from a veteran. These scam artists rip off innocent people, and
as a result, contributions are diverted away from organizations
that are actually trying to do something for the veterans.
My loss may seem small, but I am certain that these
scammers have targeted thousands, if not millions, of more
people. The total sum of this bounty probably far exceeds
anything I will ever earn in my lifetime, and that is wrong.
On behalf of veterans, I ask everyone who can help to stop
this activity to play their part.
Thank you again for inviting me to testify today. I hope by
sharing my story, I can help someone from losing money to these
types of scammers.
I thank you.
The Chairman. Thank you very much, Mr. Foreman, for coming
forward and warning others. That is courageous of you, and I am
sure that you will save others from going through what you did,
even though you were able to stop it pretty quickly.
District Attorney Richardson, welcome.
STATEMENT OF W. DEWAYNE RICHARDSON, DSW,
DISTRICT ATTORNEY, FOURTH CIRCUIT COURT,
DISTRICT OF MISSISSIPPI, INDIANOLA, MISSISSIPPI
Mr. Richardson. Chairman Collins, Ranking Member Casey, and
members of the Committee, I am District Attorney Dewayne
Richardson, and I represent the Fourth Judicial District of
Mississippi. Thank you for the opportunity to testify before
this Committee about our office's investigation and prosecution
of the crimes committed by Gina a/k/a Tammi Palasini.
My office first became aware of Palasini's actions due to a
single bad check. This check led to the unraveling of a fraud
that amounted to millions of dollars stolen from the elderly,
veterans, and their families.
In 2011, Palasini was formally introduced to 89-year-old
Grace Ward and her family through staff at a facility where
Grace Ward was a resident. Palasini promised the Ward family
that she would provide a 10 percent return on their investment,
along with securing Medicaid benefits for Grace Ward, which
could be used to offset the cost of living at the facility.
With that promise, the Ward family presented Palasini with a
cashier's check in the amount of $189,000. That was Grace
Ward's life savings.
When Grace Ward passed away 3 months later, the family
contacted Palasini, who assured them that she would repay their
money plus interest. After many false promises and excuses,
Palasini had a check hand-delivered to the Ward family on
September 30, 2011, in the amount of $192,000. This was to
include the initial investment as well as $3,000 in interest,
and it was at this moment when Palasini committed the crime of
check fraud.
Grace's son, Roy Ward, contacted my office as Palasini's
business has a location in my district, and after learning the
depth of Palasini's crimes against the Ward family, my office
manager, Tamicko Fair, became determined to do everything
possible to make this family whole and attempt to recoup their
funds.
My office's investigation into Palasini would last almost 5
years. She was tracked down after being listed in the Riverside
County Mental Health Board's monthly meeting agenda, and at
that time, she was operating as Senior Benefits Consulting in
Riverside, California.
With the assistance of Hugh McClendon with the U.S.
Marshals Service for the Northern District of Mississippi and
other law enforcement agencies, Palasini was captured,
arrested, and brought back to Mississippi on our Sunflower
County warrant. It was also at that time, due to media
publicity, that I began to receive phone calls from other
victims from across the State, and it was also at that time
that I learned of an investigation being conducted by Kyle
Parker, a U.S. Postal Inspector.
One of those additional victims that I spoke with was World
War II Air Force veteran Johnnie Ray Toland. As Mr. Toland grew
older and began to show signs of Alzheimer's, his children
began to look for assisted living locations for him, and staff
members at one of those locations introduced the Toland family
to Palasini in 2011.
The Tolands were made the same fraudulent promises as the
Wards, and Palasini was able to convince that family to hand
over control of $340,000 of their funds. Palasini guaranteed
that Mr. Toland would receive veteran's benefits as well as the
same return on his investment as she promised the Wards.
Johnnie Ray Toland went on to live 3 more years, and it was
not until his passing that his family learned of Palasini's
fraudulent scheme. On the same day of his funeral, a Postal
Inspector contacted his son, Jimmy, and told him of Palasini's
fraudulent schemes and also told him that on the same day that
they gave Palasini control of their dad's $340,000, she used
their money to purchase a race car and advertising for her son.
Ultimately, Palasini was convinced in three counties in
Mississippi: Wayne, Pike, and Sunflower. She was sentenced to
serve 20 years in prison for all three counties today.
In addition to the Mississippi convictions, Palasini was
also charged later in 19-count Federal indictment in 2015. She
pled guilty to one count of the indictment and was sentenced to
53 months in custody to run at the same time as she served the
Mississippi time. In the Federal conviction, Palasini was also
ordered to pay over $2 million in restitution.
After speaking to the victims of Palasini, words cannot
express the level of devastation she imposed on their lives.
All of her victims were elderly citizens, some of whom were
veterans.
For the Ward family, Palasini's crimes imposed a severe
financial hardship. I learned that Grace Ward's one desire as
she grew older was that she be able to provide for her family
financially after her death, and Palasini took that way from
them.
In total, Palasini was ordered to pay over $2.5 million in
restitution between State and Federal courts. To date, Palasini
has not paid one cent in restitution in my conviction in
Sunflower County, and she has only paid in all her crimes $50
toward a $100 mandatory Federal assessment.
A well-respected prosecutor in Mississippi has often said
it is our duty to care for our widows, our orphans, and our
elderly. What began as a complaint for a felony worthless check
has brought awareness to a greater problem in our society.
Victims described Palasini as a very smart, connected, and
ultimately a very conniving individual. Palasini found her
victims at the very institutions that should have cared for and
protected them, but when she presented them her proposals, she
came to the meetings with all the right credentials and all the
right connections to achieve the results that the victims
desired. However, in the end, all she left each family with was
an empty bank account and broken promises.
Thank you for the opportunity to testify before this
Committee, and I look forward to answering any questions.
The Chairman. Thank you very much, DA Richardson. I am very
grateful for your compassion for the victims of these crimes
and your determination to put these criminals behind bars.
Thank you.
Inspector Harris?
STATEMENT OF CARROLL HARRIS, ACTING INSPECTOR
IN CHARGE, COMMUNICATIONS, GOVERNANCE AND
STRATEGY GROUP, UNITED STATES POSTAL
INSPECTION SERVICE, WASHINGTON, D.C.
Mr. Harris. Good morning, Chairman Collins, Ranking Member
Casey, and members of the Committee. Thank you for holding this
hearing on veteran-related scams.
My name is Carroll Harris. I am the acting Inspector in
Charge responsible for communications within the U.S. Postal
Inspection Service, the law enforcement, crime prevention, and
security arm of the Postal Service.
I started my career in Government service when I joined the
Marine Corps in 1990. I served 10 years of active duty,
including combat duty in Iraq. I continue to serve as a Marine
Corps reservist.
According to a recent AARP survey, veterans are twice as
likely to unknowingly participate in a scam as compared to the
general population. The survey also found that the vast
majority of veterans encounter scams that have been tailored
just to them. These will be veteran pension buyouts, fake vet
charities, and scams that offer special access to veteran
benefits but for a fee.
In these cases, the scammer makes it appear they represent
a Government agency or veteran organization or claim that they
themselves served in the military so they can create a sense of
affinity. Imposters like these know that members of the
military have been trained to rely upon and to trust other
service members and to honor the bonds of service.
Another finding from the survey found that veterans
experienced post-traumatic stress at a rate more than double
the general public. It can be extremely difficult for a veteran
to recognize when their otherwise good judgment has been
temporarily clouded by what an experienced fraud operator is
selling.
In one case, Postal Inspectors investigated Gina Palasini
who led vets to believe she was a certified advisor affiliated
with the Department of Veterans Affairs. She told older
veterans, she could boost their pensions by making it appear
they had fewer assets than they really did and could then
qualify for greater government assistance. She also offered to
reinvest her client's money in financial products that she
would control, but Palasini failed to warn them she was
jeopardizing their benefits with clever moves like these.
In reality, the fraud operator never reinvested the money
on the veteran's behalf. She simply took the money and spent it
on herself; that is, of course, until she landed in jail.
In another case, a fake charity led people to believe their
donations would help disabled and paralyzed veterans,
especially vets who were vulnerable to suicide. Mr. Foreman,
another witness here, received one of their solicitations in
his mailbox. He generously gave. His donation never went toward
helping anyone but the scammers, who have been referred to the
Department of Justice for prosecution.
In 2017, AARP and the U.S. Postal Inspection Service
launched Operation Protect Veterans. Since that time, we have
been sharing tips on how vets can safeguard their assets and
protect their personal information. With the help of veterans
organizations, libraries, senior centers, and more than 30,000
post office across the country, we distributed these customized
brochures and surveys.
The survey has served two important purposes. First, it is
a means for veterans to tell us what kinds of scams they are
seeing, but more importantly, by filling out the survey and
returning it, it has raised their awareness. Even more, we
believe it has boosted their immunity to fraud.
When Postal Inspectors are asked how can consumers stay
safe financially, we tell them just remember to stop and talk.
If you receive a request to invest money or pay a fee or
collect a prize or send money to someone you have only known
online, find a friend before you reach for your wallet. People
who operate fraud schemes are successful because they are
persuasive and because they have convinced us to keep it a
secret. Why? Scams only work when we are isolated from the
people we know and trust at any age but especially after we
retire. We all need to make sure there is an extra pair of eyes
on the decisions we make about our money. We need a trustworthy
friend or a family member we can talk to. In the military, we
refer to this person as our foxhole buddy. We like to say, ``I
have got your six.'' Think of the hands of the clock facing
forward at 12 and backward at six. ``I have got your six'' is
another way of saying ``I have got your back.''
When I was in a foxhole, my buddy was the person I trusted
to be my eyes when I could not see, and I did the same for him.
My buddy literally was up when I was down, and when he was
down, I was up.
I use a lot of military jargon. I grew up in a household
where it was used freely. My father served in combat in
Vietnam, and my grandfathers served in World War II.
``Service,'' ``honor,'' and ``duty'' were household terms used
daily.
When the Postal Inspection Service launched Operation
Protect Veterans, I shared this brochure with my dad. I told
him, ``Dad, you have me to talk to about money matters, but not
everyone has someone to confide in. Maybe you can help others.
Pass this brochure to your friends. Be a foxhole buddy for
someone else.''
Before I conclude, I want to thank the Committee for its
efforts to stop fraudulent phone calls. We know the scams do
not just happen over the telephone line, but the ease with with
a telemarketer can influence others over the phone is
unparalleled.
Postal Inspectors routinely tell consumers, work with their
phone service providers to stop robo and other unwanted calls.
Thank you for helping to keep fraudulent calls from ever
ringing out phones in the first place.
I appreciate the opportunity to share with you the work
that Postal Inspectors do to protect veterans and safeguard the
American public from fraud.
The Chairman. Thank you very much, Inspector Harris. I know
firsthand what a great job the Postal Inspection Service does,
and I really appreciate your passion for this cause, so thank
you.
Mr. Wells, Mr. Harris talked about how important it was to
have someone that an older veteran can talk to, and as I
understand it, that is exactly what you did. Could you tell us
a little bit more about the Vet2Vet program and the training
that you received?
Mr. Wells. Absolutely. The Vet2Vet program provided its
volunteers, does provide its volunteers with training to
understand, first and foremost, how to connect with the
veterans, contact them weekly, send them emails, followup, see
how they are doing, because they are going to be the eyes and
ears in the household. How can you recognize if your veteran
has a bunch of food that is in the refrigerator going bad? Can
you recognize if they are able to maintain and upkeep
themselves and maybe recognize some signs or symptoms of
cognitive decline or mental health issues but really just sort
of to be the eyes on the ground?
As far as scams go, they offered some training on how to
recognize financial scams, some information on scams that had
been perpetuated before, and then a big focus of what that
training was, it was to allow the veterans to understand--the
veteran volunteers, I should say, the volunteers to understand
the number of organizations and benefits that veterans and
elderly qualified for in the State.
We did not have to have an intimate knowledge of these
things or an encyclopedia knowledge of these things but
recognize if there is a need that we could refer back to the
agency and that they would be able to connect people for legal
benefit, for health care benefit, whether it was VA or State or
just even in the community, that they were the resource.
The Chairman. Let us talk about the scam that you helped
prevent. A lot of times, the con artist uses the telephone or
the internet to send an email or a solicitation comes in the
mail, as Mr. Foreman mentioned, for a phony charity, but if I
understood you correctly, in this case, it was a flyer, an ad
that was included in the local newspaper, the Portland Press
Herald, I assume, along with all the other flyers and ads. Is
that correct?
Mr. Wells. Yes, ma'am. It was an ad that was placed. I
think it was part of the newsletter for the Southern Maine
Agency on Aging, but it was something that just was sent out,
like anybody. Most people toss these things away as junk mail,
and it was a small ad. It was advertising exactly what I said,
which was free in-home and respite care for veterans, so
directly targeting advertising.
The Chairman. This is an unusual method of trying to rip
off our veterans. Most of the ones that we hear about are the
telephone calls, the robocalls, the internet scams, or the
direct solicitations in the mail. I think, in many ways, people
would be less on guard for that kind of approach.
Was it difficult for you to convince this older veteran
that it was a scam, or had you built up a relationship by that
point so that he and his wife trusted your judgment?
Mr. Wells. I do not think it was difficult at all. It was a
sad thing to see that he, the veteran, was really excited about
this because, finally, his wife had some relief. He was not
mobile, or it was very hard for him. He had the assistance of a
walker, and we are talking about a 200-pound, 6-foot man in his
80's, and she was also in her 80's. He was really excited about
this opportunity, and then I had to sort of sweep the rug out
from under them.
His wife almost immediately said that--once I had laid out
why this was likely a bad idea and sounded like it would expose
them, at the very least expose them to legal problems with how
they were going to do the accounting and potential fraud, she
definitely, because of our relationship and what she had seen
with me and her husband, was right on board.
The Chairman. Inspector Harris, one of the advantages of
the Postal Service is there are post offices everywhere, in
very small communities as well as larger urban areas.
Tell us a little bit about how you make sure that this
important flyer, which warns veterans about scams but also
cleverly has them fill out the survey so that you can get
information and they get more educated. How are they
distributed, and how do you advertise this program?
Mr. Harris. Yes. Chairman Collins, thank you for that
question.
There are over 30,000 post offices across the Country, and
the post office lobby is incredibly valuable real eState for
the community. As part of our efforts to help spread the word,
raise awareness, we have placed these brochures in those
lobbies across the country. We did that back in 2018, and we
have received many responses from them. We believe that we have
helped not only veterans but the population in general by
highlighting the scams and schemes that are out there, and we
hope it served as a call to action to also share with others as
we seek to enlist everyone in the fight against fraud by
raising the awareness and calling them to help protect
themselves and serve others in the community.
The Chairman. Thank you.
Senator Casey?
Senator Casey. Thank you very much, Chairman Collins.
LaVerne, I will start with you. As I was listening to your
story again and seeing it in writing but also hearing you
telling it, I was reminded that it would be very easy for a lot
of people to send that little extra, few extra dollars after
you knew that it was more than you had promised, and because of
the dollar amount, you could see how easy it would be for
someone to gradually fall into the trap.
Absent this hearing and absent being educated by my staff
and others, without that, I probably would have done the same
thing.
When you think about the dollar amounts, we live in a
country--I just had my staff check. I think the U.S. number is
about 18 million veterans. I know in our State of Pennsylvania,
it is over 800,000. About 819,000, I think, is the last number
I saw.
The number of veterans is so big and the targeting is so
substantial, if GAO is right that about 80 percent, roughly,
have been targeted, you could get a lot of money accumulating
with those small-dollar amounts. It is very easy for any one of
us to fall into that, number one. Number two, when I go around
our State and visit senior centers, one thing I try to urge
folks to do, knowing that it could happen to anyone at any age,
is to hang up if you have any suspicion. I do not think I would
have had a suspicion in the case that you cited. I would have
probably gone along, at least at one point. I hope maybe I
would have cut it off when you did.
Mr. Foreman. Right.
Senator Casey. Other than something as simple as saying if
you have some suspicion, hang up, that is pretty simple advice,
but, I guess, what other tips would you give especially to
veterans based upon the experience that you had? The fact that
you are here provides that kind of advice for others.
Mr. Foreman. The number one action we took was caller ID to
screen calls.
Senator Casey. Right.
Mr. Foreman. I feel that is an important step in the right
direction. I do not answer calls that I do not recognize.
The other is that if you do respond to a telephone call and
somebody is asking for funds is to not provide a credit card or
a check number. Force them to send you a pledge letter. They
all will do it.
We also have to recognize how we as veterans telegraph our
veteran's status, and we do it unknowingly. Seventy-five to 80
percent of the return labels I put on my letters are either
American Legion, VFW, USO, something to do with the military.
People receiving those, even if they were not knowledgeable
that I was a veteran, my letter basically tells them. Plus, the
credit union that I use is primarily one that is from a
military organization.
There is multiple ways I am telling them that I am a
veteran, even though I do not verbalize it on the phone.
Senator Casey. That is pretty easy to fall into that.
I want to ask you one more question. In your case, the fake
charity used the bank and routing number from checks you had
sent them to take money out of your account, and as you
referred to in your testimony, they use the information to
create a ``remotely generated check,'' kind of a phrase of art.
This type of check, as we know, is legal but only when the
account holder gives permission for the money to be withdrawn
in this way.
You mentioned you were shocked when you found out about it,
and clearly, you were not aware of remotely generated checks
before this, nor was I until you brought it to our attention.
Is there anything you wish your credit union could have
done prior to the funds being removed to confirm that you did
not give your consent, now that you are on the other side of
anything----
Mr. Foreman. Now that I am on the other--it would be nice
if the financial institution--they know the sequence of your
checks. They normally sort by numeric sequence, and in that, my
organization always puts an asterisk after if there is a
skipped check. In my case, at that time, my check series was
like 3600, and all at once, there is a check that is coded
9000. You would think that would set off some kind of a bell or
whistle at the financial organization. I wish it was that way,
but it did not happen.
Senator Casey. Thanks very much, Madam Chair.
The Chairman. Thank you.
Senator Braun?
Senator Braun. It is amazing that we are even discussing
this and that there seems to be like a farm system of bilkers
out there.
I am curious. Ben, do you know when that particular
individual started that scam--and is it still going on--what
the life span is of the folks that get into the business of
bilking? Do you know in your case?
Mr. Wells. I mean, I am speculating. I could not tell you
exactly the timeline, but it sounded like the operation was
fairly new by the way that they were describing it, and
afterward, I did a recent research.
When I first had a contact with them, I had their business
card, and I kicked myself for getting rid of it. I did a recent
research, and I could not find anything that was under that
name any longer. I am also going off of memory for the name, so
I am not sure if I had it exactly right.
Senator Braun. They could have faded into the sunset----
Mr. Wells. Absolutely.
Senator Braun [continuing] and gotten by with what they
did?
Mr. Wells. Yes.
Senator Braun. LaVerne, do you know is the Disabled and
Paralyzed Vets Fund still out there sending solicitations?
Mr. Foreman. I do not think so. As far as I know, they have
been shut down.
Senator Braun. I know even just running a company, when it
comes to checks, that does not discriminate in any way. It
attacks anyone that has a check out there. We constantly in our
own company will find checks where they get your check, do a
reproduction, and then, in this case, 9000 out of context with
3000, it seems like the institutions themselves--I know we have
had discussions before, what is the responsibility of phone
companies or banks when it comes to a lot of this stuff should
be easy to ferret out among the institutions that are used to
process these scams.
Dewayne, I am curious. The battle against this, is the life
span short of the scammers, and where you get rid of one, you
are going to have two or three crop up? What has the trend line
been? Is it getting worse? Is it getting better? It seems like
there is a lot of tools out there technologically where if the
institutions that are used--banks, phone companies--were on
their game, that you could figure this out before it becomes
rampant.
Mr. Richardson. Well, from what I can tell, it is dependent
upon whether or not the scammer is caught.
In this instance and what I have seen in this
investigation, Palasini started this action over 10 years ago,
and it was not until 7 years later when she was ultimately
convicted for all crimes, so she had at least that time period.
Also, in doing so, I learned that in California, she had
made contact with other scammers, and there were two other
individuals that started a business with her. In looking at
their background, both of them had previously had problems with
the law, so who knows to what extent they have done it or may
still be doing it?
Senator Braun. That had the disguise of actually maybe
having some legitimacy to it in the sense that you were going
to get a good return, but it would be similar to Madoff where
you did not have to pay out, and that in this case, 50 bucks on
$2 million. There is a lot to be said that we need to do a
better job of preventing and getting the institutions that are
normally the vehicle, whether it is a bank or a phone company,
more involved in it.
Carroll, because the Postal Service is used so often to be
again an agent for this, are you finding more? Is it
stabilizing? Less? What does the prognosis look for down the
road?
Mr. Harris. The Postal Service has no interest in being an
unwitting participant in any of these scams or schemes. As long
as there is commerce, there will be scams and schemes; hence,
the existence of the Inspection Service, our partnership with
our other Federal, State, and local entities. We are going to
continue to engage in the fight. It is still alive and well. It
evolves.
Robocalls and the good work of the Senate, to stop the
robocalls, an example of a digital evolution, but eventually,
they connect to the mail. We move communications in commerce.
We move physical goods, and eventually, the conspiracies at
times will work their way into our web. That is when we catch
them, and we engage with our Federal partners. We seek a whole-
of-Government approach.
Senator Braun. Are your antennae more alert now, and do you
have methods and policies where you are starting to prevent it?
Or are you generally reacting to a fair accompli?
Mr. Richardson. We use both. We believe strongly in
prevention, prevention messaging, optimizing the messaging that
we give to the public and the American consumer. We also
vigorously enforce the laws as they are written, so it is both,
and we have been doing both for decades.
Senator Braun. Thank you.
The Chairman. Thank you, Senator.
Senator Jones?
Senator Jones. Thank you, Madam Chair, and thank you to all
the witnesses for being here. I really appreciate all we are
hearing today, especially from a fellow prosecutor and Postal
Inspector, I worked with as U.S. Attorney a lot.
You know, Madam Chair, I cannot help but think, though, as
we are listening to this concerning illegal scams and criminal
activity, I hear the same phrases of diverting money and false
pretenses and taking hard-earned money from veterans and
particularly protecting and caring for our widows, our orphans,
and our elderly, and I cannot help but think about a somewhat
legal scam--I am just going to say it--that you and I have been
working on, and that is the elimination of the veterans'
military widows tax.
Congress of the United States is allowing that to be
diverted and changed, and I appreciate your work so much on
helping us. I am still hopeful that we can get that in our NDAA
this year so we can eliminate that scam once and for all.
I would like to kind of focus initially with my DA buddy
and Mr. Harris because I know firsthand these are difficult to
track down and prosecute, and technology is changing. It seems
like when I was a prosecutor and even as a defense lawyer some,
it seemed like the bad guys were always a couple of steps
ahead. They were able to work and to do things.
What tools do you need? Are there other tools that you
could use right now to both track down and prosecute?
I appreciate the idea of deterring and trying to make
awareness, and that is wonderful that we are trying to do that.
We are not going to stop this. I mean, it is going to continue.
What can we do as a Congress to give you additional tools on
both the State and Federal level to try to stop these guys in
their tracks so that these folks do not last for years before
they are apprehended?
Mr. Harris. Thank you for the question, Senator.
The Inspection Service has been in consultation with the
Department of Justice to seek an expansion of our
administrative subpoena authority to be in par with other
Department of Justice, Federal law enforcement agencies, so
that we can do more quicker to fight frauds or any of the other
200 Federal statutes we enforce to maximize the existence of
our resource. That is something that we are in consultation
with Department of Justice.
We believe they are exploring the legislative approach to
help us become on par with other DOJ entities there, so that is
something that can help us.
Your continued support of our Federal law enforcement
partners, your efforts to stop robocalls, I applaud. If you
continue on that lane, I believe we are making a dent, and we
are forcing the criminal conspirators to evolve.
Senator Jones. Right.
Mr. Richardson. Mr. Jones, thank you for the question.
From what I have noticed, there are a lot of businesses
like that, that Palasini operated. She operated businesses by
the name of Veterans Pension Planners, Medicaid Planning
Resources, Medicaid Planning Specialists, Senior Benefit
Consulting. All of these sounded legitimate, and there are many
other businesses like this.
I would think that, one, maybe if companies such as this
are required to register or have various qualifications to
administer the service that they are telling their constituents
they can provide, that may be of some benefit. If those same
companies, those preparers were somehow required to sign off on
those applications that they are telling their constituents
that we can provide just resource with providing Medicaid
services or veterans benefits service--if they are somehow
required, just like a tax preparer, to sign off and put their
name on a dotted line saying that they are the ones responsible
for the information generated, so that we will be able to have
some type of record definitely who is involved with what case.
Senator Jones. That is fair. I really appreciate that, and
I would urge both of you to look at a bill that Senator Cotton
and Senator Rounds and Senator Warner and I have to update our
money laundering statutes. We have got it pending right now. We
are hoping to get through, and, DA Richardson, it would address
just that very issue, the issue of beneficiary ownership, and
require an index, require a list of the beneficial owners of
all of these shell corporations that are out there performing
these scams.
Thank you, and I would urge the DA's association to maybe
get involved and get behind that.
Thank you, Madam Chair.
The Chairman. Thank you, Senator.
Senator McSally?
Senator McSally. Thank you so much, Chairman Collins.
Thanks for having this important hearing.
Thanks for all of you for sharing your testimony,
especially Mr. Foreman. I know there are so many like you who
are not willing to come forward and share your testimony of
what you went through, so thank you so much for that.
These scams are coming in so many forms, and I will tell
you, as a veteran myself, there is a special place in hell for
these people who are scamming on our heroes who raised their
right hand, took an oath of office, were willing to give the
ultimate sacrifice, and they come home and now in a vulnerable
place and in their older years or whatever age. These people
are going after them.
I really appreciate this hearing, and we need to do more to
do everything it takes in order to find them, track them down,
and hold them accountable. This is infuriating.
These scams come in many different forms, as you all have
shared, one of which was highlighted in Arizona recently where
you have civilians who think they are meeting a military member
on a dating app or some other way, and they are serving
overseas, and they need some help. This is where now civilians
are being roped into caring for our military, and Luke Air
Force Base has said they are receiving many calls from
civilians asking, ``Is this person really in the military? Are
they really deployed?'' and they are having to kind of help
sort that out, so somehow or another, tying people's love for
our veterans and our military and their willingness to help, to
scam other civilians, so this trend is going up as well.
I do not know if you can share anything on this perspective
of how we can--because veterans and military identity are
basically being stolen to create these false profiles for that.
Any perspectives on that, DA Richardson or Mr. Harris, on what
else we can do in order to protect veterans' identities as
well, that they are scamming others? Everybody is getting
scammed in this.
Mr. Harris. Continue expansion of the messaging we are
providing. Generally speaking, in order to protect PIIs, it is
something we should do. Hearings like this, other community
outreach. Identity theft is an international epidemic. Veterans
are impacted, just like the rest of society. We need to take a
societal approach to solving this, a whole-of-Government
approach from the government side, but it is also outside of
government. It is being that foxhole buddy for someone that
needs a friend, having someone to check before you make a
financial decision.
Senator McSally. Thank you.
We hear these awful stories, and then as you say, Mr.
Foreman, you do not trust anybody now. You do not trust
legitimate charities calling or soliciting you, and that can
have a really negative impact on those who really do need our
support.
I want to highlight another scam. As a veteran, I get some
of these things in the mail, and this is maybe not an official
scam in the way it is identified. I get these letters. I have
been getting gone of them a week lately, and I brought them
with me to D.C. because I am so mad about it. Administrative
notice: ``Our review has indicated your VA loan waiting period
has been marked as expired. Please keep a copy of this notice
for your records. VA guidelines require waiting periods''--it
is all nonsense--``and my equity reserves.'' I knew something
was off because name is Sally Martha Mic on here, Okay? These
guys cannot even get their facts straight.
This is an actual bank, Federal savings bank. I am going to
call them out right now. This is preying upon our veterans.
Someone betting this is going, ``Oh, some waiting period has
expired? I need to call these people.'' It looks like it is
from the Government, and then you thinks g has expired. They
are preying upon our vets to cash out or to pay ridiculous
closing fees for legitimate--I mean, it looks like it is a
legitimate loan, but it is misleading. It is confusing, and we
are seeing more and more veterans complaining about these types
of things. I am getting one of these a week.
Imagine veterans who call this number and then end up
refinancing their home loan that they do not need to be doing
for some interest rate and some closing cost that is robbing
them of their hard-earned resources. This stuff needs to stop
too, and I am going to see if we can work on this with the VA
Committee to see how we can tighten up these types of scams too
because they are confusing and misleading to our veterans.
Are you aware, Mr. Wells, of these types of other
activities going on that are also robbing our veterans?
Mr. Wells. Yes. I get a bunch of those, and I throw them
out. I get them about my home, refinancing my home, or I use
the VA-backed mortgage benefit, and since then, I have gotten
plenty of them telling me that either my VA-backed mortgage is
going to go up or I need to refinance it or I need to have some
communication with some entity. I luckily have the wherewithal
to read the fine print and recognize that it is not an official
document, but I can only imagine, if I think back to my veteran
that I was working with----
Senator McSally. Yes.
Mr. Wells [continuing] in failing health and struggling,
and something like this comes across them, and why not?
Senator McSally. Great. Well, let us work on those as well.
Thank you all for your testimony today. Appreciate it.
The Chairman. Thank you very much.
Senator Sinema?
Senator Sinema. Well, thank you to our Chair.
The Chairman. I apologize. I did not see that Senator
Blumenthal had come back. He was here at the very beginning. I
apologize.
Senator Blumenthal?
Senator Blumenthal. Thank you very much, Madam Chair, and
thank you for having this hearing.
As long as I have been a prosecutor, when I was Attorney
General in Connecticut, as long as I have tried to help
veterans, this issue has been a perennial one.
I have to say I was particularly moved by Senator Casey in
this opening remarks when he referred to his dad and the
comment about our seeking to be worthy of the services of our
veterans, and one of those areas where I think we often fail is
to protect them from exactly these kinds of scams.
I recently sent a letter to Secretary Wilke along with our
colleagues calling attention to this problem. I just came from
a hearing of the Veterans Affairs Committee involving new
judges at the Court of Veterans Claims. This issue is one that
is pervasive and ongoing.
I want to ask perhaps first Mr. Foreman, if I may. Thank
you, along with the others, for being here today and for
yourself. I appreciate your sharing your personal experience
with us. I imagine it is pretty frustrating to be here.
Mr. Foreman. Yes.
Senator Blumenthal. You have shared that you frequently
donate to charities that actually support veterans.
Unfortunately, this kind of scam is one of the most prevalent.
If you had to advise your fellow veterans in identifying a
legitimate charity versus a fraudulent one, what would be the
signs that you would point out to them? Is there any way of
telling?
Mr. Foreman. Not really. Longevity is what I use today,
those that I know that have been around, and using names,
American Legion, VFW, USO, like Wounded Warriors, some of those
that I am familiar with, but it could be an outstanding charity
that I never heard of. I am not going to donate.
Senator Blumenthal. Some of them are lookalikes, right?
Mr. Foreman. Yes.
Senator Blumenthal. Or sound-alike and lookalike.
Mr. Harris, can the VA do more, in your experience, to
protect veterans?
Mr. Harris. Thank you for the question, Senator.
I am incredibly thankful for what the VA has done for me
and other veterans over the years. I have been a recipient of
care at the VA. I have had multiple procedures. We can always
do more. Any Government entity can find opportunity to do more,
and I appreciate any attention, guidance, and oversight that
they are given so that they can optimize the way they watch out
for, care for, inform, empower, and inspire veterans.
Senator Blumenthal. I guess I know that you are sympathetic
to the VA, and so am I. I am wondering whether they devote
enough resources to making veterans aware, alerting them, and
also reporting doing the kind of work that Mr. Wells has been
doing with his colleagues and fellow veterans. Should they be
doing more?
Mr. Harris. I cannot speak as to all of their programs. I
am not a subject-matter expert on it.
I can say they have been a good partner of the Inspection
Service. They have allowed us to extend messaging through their
podcasts. They have allowed us to extend messaging on their
blog, but I am not a subject-matter expert on exactly what they
have in place as far as prevention programs, besides the ones
with which we have partnered with them.
Senator Blumenthal. Well, let me just say the Postal
Service and Postal Inspectors do great work in this area. They
are really unappreciated, I think, in a lot of what they do.
People think of law enforcement as the FBI or the DEA, but what
I found as U.S. Attorney and then as Attorney General was that
the guys who really put these cases together are often the
Postal Inspectors and they are able to track down some of the
perpetrators of these frauds. I am hopeful that the VA can take
advantage of those skills and make use of them better.
My time has expired, but I really appreciate all of you
being here today. Thank you very much.
The Chairman. Thank you.
Senator Scott?
Senator Rick Scott. I want to thank Chairman Collins and
Ranking Member Casey for putting this together.
I served in the Navy, and I have not had a situation where
they have tried to scam me that I know of. Maybe they have and
I did not know it. When you really think about it, it is guys
like my dad who went and serve. He had a sixth grade education,
and he never had any money. It would have been devastating to
him if any of this ever happened to him.
I do remember one time where somebody came to buy one of
his cars, and they never came back. He was such a trusting
person. He had been an easy person probably to be a target.
In 2018, the Federal Trade Commission received 3 million
fraud and identity theft complaints. I introduced a bill that
is called the Identity Theft Victims Protection Act, which is
basically if you have been the victim, rather than go on your
record, that they mess up your credit, it goes on the record of
the person that did it to you.
I know the VA has a hotline to deal with identity theft.
What else should we be doing with regard to identity theft to
help our veterans? Like my dad, my dad probably would have
been--he is a pretty easy target.
Mr. Wells?
Mr. Wells. Off the top of my head, I am not an expert on
this, but I would imagine that if we had a system where
identity theft specifically for veterans potentially rose to a
higher level of prosecution, to have it be something as maybe a
protected class or just a higher level.
I think also protecting the veterans' information and
dissemination of that information, whether it is through
outreach, through the VA, or through other systems. When you
get out of the military, they want you to register for all of
these things, so you kind of get in this mode of I am going to
put down my name and Social Security number, name and Social
Security number, and maybe have some sort of awareness or
training at the end of the active duty servicemember's
enlistment that says maybe stop doing that.
It is very common to go to the medical in the military,
name and Social Security, name and Social Security, on all your
forms always, so maybe introduce a little bit more awareness as
these things are out there and to protect your own personal
information.
Senator Rick Scott. Mr. Foreman?
Mr. Foreman. I think one of the things is a failure to
recognize that a lot of us veterans, especially from my era, do
not have computers, smart phones. They are not on Facebook.
They are not on all of these new things. I have gone 21 years
without a television. I have no computer in my house.
I do not have all of this. I read the paper. I listen to
the radio. That is where I get my information, from magazines,
newspaper, radio, so all of the efforts that are being done on
some of these more modern fancy things, they are going over my
head.
Senator Rick Scott. It would not help you.
Mr. Foreman. I am sure there is a lot of--you figure the
homeless vets, they are missing out too. There is a lot of us
older veterans that are not in the social media.
Senator Rick Scott. Mr. Richardson?
Mr. Richardson. I would think, similar to what Mr. Foreman
said. It is a matter of meeting those veterans or meeting those
potential victims where you find them. As he stated, some may
not use one type of media or may use another. Many of them may
have been reached through mail, where the Postal Service might
get involved or whether maybe the VA can get involved, not only
creating awareness of the potential scams. There are scammers
out there that are trying to reach potential victims.
Especially with vs, especially with our older population, if
they have money, the scammers want that money. It is a matter
of finding and reaching those potential victims and veterans,
where you find them, and reaching out and raising awareness to
them as far as what to look for because, as the crimes often
evolve, we also have to raise awareness and evolve the way that
we--create awareness to those potential victims.
Senator Rick Scott. Mr. Harris?
Mr. Harris. I would echo what DA Richardson shared,
enhanced education and awareness with the target audience and
the veteran population. They have an incredible infrastructure
with which they can do this. They have face-to-face time
through all the other activities that already exist as part of
what the Department of Veterans Affairs is doing to care for
its veterans.
I would say the opportunity exists, and I appreciate you
asking that question.
Senator Rick Scott. Thank you, Chairman Collins.
The Chairman. Thank you very much.
Senator Sinema?
Senator Sinema. Thank you to our Chair and our Ranking
Member for today's hearing on protecting our Nation's veterans
from criminal fraudsters.
Arizona has a long and proud tradition to military service.
One in ten Arizona adults is a veteran, and more than half of
our veterans are age 65 or older. These men and women
safeguarded our freedoms, and we owe them a deep debt of
gratitude.
It is horrible that scammers deliberately target veterans
for their pension or their benefits or take advantage of their
desire to contribute to charities that serve their fellow
veterans.
A story from Arizona, Jack Holder, he is a World War II
veteran, and he is a resident of Sun Lakes, Arizona. He
survived the attack on Pearl Harbor, and he fought in aerial
combat overseas. In 2016, he was targeted by criminal
fraudsters in a sweepstake scam, and it robbed him of $43,000.
That was nearly his entire life savings.
Jack survived Pearl Harbor and watched his wife of nearly
70 years succumb to Alzheimer's disease, but he describes
realizing when he had been a victim of a scam as the worst day
of his life. He shares his story, despite the embarrassment he
feels, because he does not want this happening to anyone else,
and that is why I have made it my mission to protect Arizonans
form financial crimes.
Last year, I was proud to work with Chairman Collins to
pass the Senior Safe Act into law, which empowers financial
institutions to report suspected instances of elder financial
abuse and fraud, and this year, we have continued our work by
introducing the Senior Security Act, which would create a task
force at the Securities and Exchange Commission to protect
seniors from financial crimes, and the Anti-Spoofing Penalties
Modernization Act, which would increase penalties for criminals
who use robocalls to harass seniors and veterans.
There is still so much work to be done, and that leads me
to my first question, which is for Inspector Harris and DA
Richardson. Earlier this year, in this Committee, I shared the
story of Maggie, whose elderly parents in Tucson were robbed of
their life savings in a sweepstake scam. Maggie's father is a
20-year veteran of the United States Air Force living with
Alzheimer's, and their family lost much of what they had saved
from his military pension.
In cases like Maggie's family and Jack's, are there ways to
help people financially recover after they have been robbed?
Can they get help through their military pension, requiring
restitution from the criminals, the Tax Code? If there are not
ways for them to get restitution, what barriers prevent
veterans from getting some of their life savings back?
Mr. Richardson. Thank you for the question, Senator.
From the criminal standpoint, one of the barriers is that
being able to locate and try to secure those assets. In many
instances, these criminals are spending it just as they get it.
In my case, Palasini did this over a period of years, and
from the investigation, as she continued to defraud different
victims, some of them, she used that money to pay benefits that
she told other victims that they would receive month to month,
and so she would have spent that money but then had to scam
others in order to pay Paul when she had stolen from him.
If there is an avenue to allow prosecutors to tie into
resources of that defendant and be able to--they are required
to make payment, but oftentimes what we look into or what we
find is that it is over a period of time, and instead of a
nominal fee and that family's loss, thousands and millions of
dollars.
Mr. Harris. I would echo the same sentiments. The challenge
we face in some of the investigations we conduct is that they
have been burning through, in a typical Ponzi scheme, where
they have spent what they had from before.
Sometimes getting assets to recover, they just do not
exist. They have already been expended or distributed, so in
those cases, it is challenging.
One thing I do feel compelled to share is through AARP's
Fraud Watch Network, families can reach out, and they can get a
live person that can help them navigate these difficult
circumstances. If they think they have a loved one who is being
victimized, they can get help. They can get a live person, and
many of the people that work these lines had been involved in a
scam or a scheme before. They have a deep passion. They are not
judgmental, and they can help people. They can determine
resources. They can help determine which Federal law
enforcement agencies to refer to, and they can help with level
setting a financial status to get someone back on track in
life.
Senator Sinema. Thank you.
Thank you, Chairman.
The Chairman. Thank you.
Senator Gillibrand, perfect timing there.
Senator Gillibrand. Lucky timing.
Thank you, Madam Chairwoman and Mr. Ranking Member.
Mr. Richardson, thank you for your important work to
prosecute these scammers and to bring justice to these victims
of financial fraud.
We know from your testimony how these scammers like to take
their schemes across State lines, so they are harder to track
down.
Do you think we could be facilitating more coordination
between investigation and enforcement agencies?
Mr. Richardson. Yes, definitely so. As I tell everyone that
I work with, there is always more that we can do.
In this particular instance, I received calls from other
agencies that were conducting other investigations later on
down the line.
Senator Gillibrand. Yes.
Mr. Richardson. When my office was first contacted about
the Ward case, Palasini had already been doing this for a
number of years throughout the State of Mississippi, and
because there was no communication or there is no way for me to
know in northern Mississippi what is happening in southern
Mississippi, then there is no way to bring awareness to my
victims----
Senator Gillibrand. Right.
Mr. Richardson [continuing]. or to hold her accountable.
Senator Gillibrand. Do you think we could centralize some
services, like a national data base, to help law enforcement
and prosecutors bring these financial fraud cases to justice?
Do you think we should put resources and organization behind
that?
Mr. Richardson. I would definitely think--Senator, thank
you for the question. I would definitely think that resources
to provide awareness or to provide a centralized location for
agencies, whether it is providing more funding to one
particular agency, to provide that source, because what we find
is that the numbers are not going to stop.
Senator Gillibrand. Right.
Mr. Richardson. If there is not communication between
States, between local agencies within a State, then there is no
way to stop those individuals because, in this instance, once
Palasini was caught in Mississippi and had been in jail and
knew the convictions were coming, she moved to California.
Senator Gillibrand. Right.
Mr. Richardson. It was only through the Postal Service that
California stopped some of those.
Senator Gillibrand. Mr. Harris, you have done great work
with Operation Protect Veterans to raise awareness, investigate
these horrible scams. As a veteran and Marine Corps reservist
yourself, you know how to communicate effectively about this
complicated issue, but could you use some help? Do you think
the Federal Government, like the FTC, could be doing more to
listen to experts like you and to disseminate information
regarding mail, telemarketing, and internet fraud that target
older Americans?
Mr. Harris. Thank you for the question, Senator.
I will always welcome help. Our organization seeks to
partner actively. We have worked well with the FTC and other
Federal entities in the past, and we will continue to do so to
the best of our ability.
We believe in sharing information, de-conflicting cases,
using a whole-of-Government approach to bring the full bear of
Federal law enforcement in cooperation with State and local to
get the best impact and find all the facts.
Senator Gillibrand. What else can Congress and the U.S.
Government do to verify legitimate veterans' charity
organizations against fraudulent loans? What role should the
Federal Government play to ensure that the credibility of a
veteran's charity organization is maintained, and that
individuals who want to contribute or to volunteer at these
organizations can do so with full confidence that they are not
being scammed?
Mr. Harris. I am aware of the Department of Veterans
Affairs' list they maintain to determine what is a good
charitable organization that can support veterans. I do not
know how they adjudicate that list, but I welcome support being
given to them as subject-matter experts in the arena to make
sure that anyone who is interacting with a veteran is not doing
so with a nefarious purpose.
Senator Gillibrand. Thank you.
Mr. Wells, thank you for coming to share your important
story about how to identify and prevent these scams before they
happen.
Does the Federal Government need to step up and do more to
provide resources to organizations like Vet2Vet to carry out
fraud prevention activities designed to protect older
Americans?
Mr. Wells. Absolutely. Vet2Vet in its current form has just
gotten a 503 status. It is fun by one full-time and one part-
time staffer, and then they manage and organize 60 volunteers
and they have 100 interactions. That is a drop in the bucket
for how many veterans that are in just the State of Maine and
as we talked about in other States. I think that Federal,
State, anybody who has the funding, the ability, the resources
could make that more robust.
Senator Gillibrand. I was very moved by Mr. Foreman's
story.
Mr. Richardson, what are the experiences of victims after a
scam, and what options do they have for justice? Could a victim
be able to get their money back? Who can they turn to for help?
Mr. Richardson. Well, in every instance, they need to
report it to law enforcement, but the question of whether or
not they get their money back, it is a sad conversation to
have, but in each and every one that I have had, whether it is
my victim or victims in others cases, the same case throughout
the State, they knew they were not going to get the money back.
The harsh reality is that I could not find the words to say
``It is not going to happen. You will not.'' If they can get
some sense of justice--and the victims that I have spoken with
after the case is over, what many of them wanted was to receive
some of their family's benefits back because, in each and every
instance, the family lost everything, and they knew they were
not going to get it back.
The Chairman. Thank you.
Senator Rosen?
Senator Rosen. Thank you, Madam Chair and Ranking Member,
for always bringing such thoughtful hearings here. I really
appreciate the work all of you are doing, and I am so sorry
that you were a victim. I am thankful that you are here to
illuminate this issue for others.
I represent the great State of Nevada, and we are home to
over 220,000 veterans and nearly 20,000 servicemembers.
According to Nevada's Attorney General's office, the most
common scams affecting our servicemembers, the people we are
speaking about, this fraudulent mortgage relief forms, high
interest military loan scams, and identity theft.
In fact, it is such a problem, Nevada is one of the top
three States in the Nation per capita of reported identity
theft.
Veterans in my State who experience scams or fraud, thy can
turn to our Attorney General's Office of Military Legal
Assistance, which provide them free legal assistance and
representation, and the OMLA, as it is referred to, is doing
excellent work to try to protect our veterans who have
sacrificed, like you all, to protect us.
In my State, we also have the Nevada Senior Medicare Patrol
program. It routinely has a presence as community events and
health fairs, geared toward veterans. For example, we have just
had our third annual veterans extravaganza in Pahrump, and
these happen all over the country. They are filled with all
kinds of information for veterans. The hardworking volunteers
for SMP, they try to educate and empower older veterans about
Medicare, Medicaid, fraud, best practices, so on and so forth.
Mr. Wells, would you please talk about the training that
your volunteers at the Vet2Vet in Maine get in order to help
them identify and target these scams, so when they are out at
the community events that happen all across the Country, they
are more able to discuss this?
Mr. Wells. Yes. Part of what we are given training on was
just how to identify personal information, PII, and just the
general sort of rules of do not give out your Social Security
number. Be wary about anybody that is asking you to open
checking accounts or give checks for services or credit card
numbers and so forth.
We were also giving awareness of the legitimate programs
that do exist that can provide benefits and how to identify
what those programs are and what the need is, and I think that
is a really important part, that if somebody knows that there
is an organization that can fill your need and can direct you
toward them, it is an established vetted organization, it has
been around, that is going to curb a lot of the, at least in my
case, looking for other organizations or potentially fraudulent
organizations.
Senator Rosen. I think that your organization does a great
job, and I hope that we could find a way to package your
training and export that to communities across the country, who
could really benefit from this.
One of the other questions that I really have also in the
training is how do--when senior centers, when churches or
synagogues or just community centers have these events for
veterans or for seniors, how do they know--how can we help them
best vet as organizers, people who are coming and showing up
and paying for a booth at one of these veterans fairs or
seniors fairs that, again, happen all across the country? Does
anyone have an idea about that? Best practice perhaps?
Mr. Wells. Yes. I can help a little bit with that. I would
say having a centralized data base. I know that there is work
that is done at the VA currently.
In our VA in Maine, in Togus, if you were to contact the
OIF/OEF coordinators, there is a social worker that is on staff
that periodically updates her list and the brochure list of
active organizations that she has had contact with, that she
knows about, that she has made referrals to, and can say as a
matter of fact that this veteran organization, charitable
organization does the work, does good work or bad work, and can
give you some insight on that. That is just a single office and
a single entity.
Senator Rosen. I wonder if we need something like the
Better Business Bureau, one of those things, that these are the
certified places, if you are going to plan to have an event,
like I said, at your church or community center or senior
center, these are the ones that get the stamp of approval, and
maybe there is a central way that we could check across the
country to avoid people being targeted right in their home
area.
Thank you.
The Chairman. Thank you, Senator. I think you bring up a
very good point. If you go to a fair of veterans services and
see a booth there, you are going to assume that someone
screened it, that it is legitimate, and with all the sound-
alike charities and all the needs out there and the generosity
that people feel toward the veterans population and veterans
toward one another, it is very easy to see how these scams
succeed. I think your point is a good one.
DA Richardson, I want to ask you my final question of this
hearing. First of all, you deserve great praise and credit for
putting the notorious con artist Tammi Palasini behind bars.
That was a great win. I know you had to deal with California as
well, and it was a complex case. I am grateful to you and your
office manager for not giving up and for the critical role that
you played in tracking her down and bring her to justice.
It is discouraging to know that none of the victims have
been repaid any significant restitution, and many of them lost
their family's entire life savings to this total unscrupulous
individual.
I am also concerned to learn that it could be that Ms.
Palasini will be released as early as June of next year, having
served only a fraction of the 20 years that she was sentenced
both with the State and Federal charges against her, which run
concurrently.
That makes me wonder whether we need to look at then
punishments and penalties for this kind of fraud. Do you have
any advice for us?
Mr. Richardson. I would, and I do. Thank you, Chairman
Collins.
In this Palasini case, if you look at it, yes, she was
sentenced to 20 years to serve on three different counties in
Mississippi, one county 10 years, one county 7 years, my county
3 years, all to run consecutive. I wanted to make sure when she
was convicted that our sentence was the last one, that our
sentence ran after the rest of them, because we noticed the
magnitude of the crimes that she committed against our elderly
and our veterans.
The harsh reality is that in Mississippi for a nonviolent
offense, you are only required to serve 25 percent of your
time, and you can also receive other trustee status to get time
knocked off.
For our victims, that is what they are angriest about. I
have talked to the Tolands lately, last week. I have talked to
the Wards. They cannot imagine how is it that she is getting
paroled after what she has done, and she has not paid us a
cent.
In the case in Wayne County, there was a Baptist minister
who had practiced for 25 years, Brother Wright. In working on
our Ward's case, we noticed through Facebook, and we found
communications about the Wright family, and their Facebook page
Brother Bobby Wright, be his voice. In that case, Palasini also
took not only his but his brother-in-law's entire life savings.
In that instance, that is the only case that I have seen
that she has paid any restitution, and that is because she paid
an initial sum of $20,000 when she pled guilty and was ordered
ultimately to pay $229,000 in total, so she still owed a debt
of $209,000. That, they will never see.
He is currently in a nursing home, suffering from
Alzheimer's, and what can be done and what should be done is
that in Mississippi and on the Federal level, I do not know if
it is the case, but there is enhanced punishments for crimes
against the elderly, but that is only on violent offenses. What
I would recommend and what I would support is that if there is
some type of enhancement to crimes when you are dealing with
elderly victims in call cases or you are dealing with veterans
in all cases--and maybe there is some type of mandatory
sentencing when you are looking at the financial burden that is
imposed on those victims, and maybe there is a graduated scale,
because in this instance, over $2.5 million was totally ordered
in restitution. I can assure you that there is still victims
out there.
If we put out a public service notice and ask for anyone to
call us about any crimes by Gina Palasini, we would find other
victims.
If there was something to ensure that she is held
accountable or scammers like her are held accountable and not
only receive the same penalty as the average person that
committed a nonviolent offense, but it is a different problem
when you are scamming and you are taking away the life savings
of our veterans and our elderly, and so something to hold them
accountable.
Thank you.
The Chairman. Thank you so much for that recommendation.
She clearly is a criminal without any conscience at all, and
essentially, in some cases, seemed to be running a pyramid
scheme.
What is so tragic about this is when the victims are
elderly, there is no way for them to recoup that money. They
need that money at a very vulnerable time in their lives, such
as the gentleman that you mentioned with Alzheimer's who is in
a nursing home, so you have long-term care costs, and it just
seems to wrong that there is not some sort of consideration or
enhanced penalty when the victims are not receiving
restitution. They are older Americans, and they have served
their Country. It seems that there should be some sort of
additional penalty that the judge would at least have the
discretion to impose.
Yes.
Mr. Richardson. What is most disheartening in this case is
that Palasini--and as I looked at her status in the Bureau of
Prisons, her release date has been moved up a month. Now she
has a tentative release date of May 15, 2020.
What is most disheartening is we spent just as much, if not
more time, tracking her down and having her brought back to
Mississippi and being brought back to justice as she would have
probably served in custody. That is not fair to our victims.
The Chairman. I totally agree with you, and that is a very
good summary of what is wrong. Thank you.
Senator Casey?
Senator Casey. I just want to put something on the record,
as we conclude. We made reference to the letter that we are
sending to the VA addressed to Hon. Robert Wilke, who is the
Secretary of the Veterans Administration. I wanted to put in on
the record because it is not something we are doing as a
routine matter.
Here is the progression of facts and information. AARP--I
think I erroneously said before was the GAO--AARP said nearly
``80 percent of veterans have reported being targeted by a scam
that is related to their veteran's status.'' That is point
number one. Point number two, GAO in this recent report, just
in October of this year, made a number of findings, but here is
the basis. Here is the crux of the findings. The GAO says the
VA receives reports of potential fraud and exploitation, but--
and here is the problem--the agency does not centrally collect
or analyze the information to, number one, assess the
prevalence of the scams, number two, inform outreach efforts,
or number three, help law enforcement pursue scammers. GAO
sends the findings to the VA. The VA's response in part was
recommending that an alternative approach be pursued that would
be a referral process to the Federal Trade Commission.
The reason why virtually every member of the Committee
signed our letter to the VA is because we all concluded not
good enough, VA. We do not just criticize them on a regular
basis, but when the VA responds to a GAO report like that and
suggests some other agency should be taking responsibility or
the full measure of responsibility for it, we had to send this.
We had no choice. We had to send this letter.
Just for the record, here is what we are asking the VA in
this letter, not tough questions, but important ones, basically
five questions. I will summarize them quickly. number one, has
the VA examined the extent to which America's veterans have
been victimized by this type of scam? Number two, how is the VA
working with Federal and State agencies and stakeholder groups
to protect veterans from financial frauds? Number three, what
has the VA done to educate veterans? Very important that they
do that. Number four, how will the VA's proposed approach in
response to GAO's recommendation provide the agency with the
ability to assess the prevalence of scams targeting veterans
and inform outreach and education efforts? I think a very
reasonable question for the VA. Number five, and finally, what
plans does the VA have in place to increase these efforts? What
further legislative or regulatory authority does the VA need to
do so?
I think very reasonable questions. Now, if the VA comes
back to us and says, ``You the Congress need to give us more
authority,'' then we should work on that. If they say, ``You
the Congress need to give us more appropriations,'' we will
work on that. The response to say this is a job for the Federal
Trade Commission or some other agency just is not good enough,
so that is why they are getting a letter, and we do not always
agree on everything around here, but we agree on this.
Madam Chair, thanks for the time for that.
The Chairman. Thank you very much. You know that I totally
agree with you that the VA could do more in this area, just
because they are a central point of contact for so many
veterans.
I know I said I had asked my last question, but, Mr.
Harris, just a very quick one for you. This excellent brochure
that the Postal Service Inspection Service has collaborated
with AARP on, in addition to being in post office lobbies, is
it also at VA clinics and hospitals and CBOCs, community
veterans centers?
Mr. Harris. Thank you for that question, Chairman Collins.
We have been in consultation with the Department of Veterans
Affairs in seeking to get distribution through their network.
To date, we have not.
The Chairman. Well, that is something that I can assure you
we will followup on because a lot of veterans have contact with
the VA and with community-based clinics. This would be a great
publication for them to pick up, so thank you for your good
work.
I want to thank all of our witnesses for their
contributions to our hearing today.
As we have heard, America's veterans are now confronting a
newer enemy, and that is relentless criminals. I am not going
to call them scammers or con artists. Let us call them what
they are. They are criminals who are seeking to steal the life
savings from our veterans, from those who have done their part
and served our Country, and to profit from their personal
information as well.
Sometimes these criminals seek to perpetuate the same scams
that we have examined many times, but even more insidious,
oftentimes these criminals are targeting our veterans with the
kinds of schemes that we have heard described today. We have
learned that there are many ways to fight these schemes that
are targeting our veterans. Operation Protect Veterans seeks to
prevent scams through education. Vet2Vet in Maine uses
comradery between veterans as a way to fight back. Veterans
like Mr. Foreman, who are also on the lookout for their fellow
veterans, and Inspector Harris as well also play an important
role. Of course, there is no substitute for the kind of
persistence that DA Richardson and his staff demonstrated in
tracking down and prosecuting these criminals.
Like Senator Casey, I want the VA to step up its game as
well and assist us in protecting our veterans.
I am very appreciative of your all being here today.
Committee members will have until Friday November 15th to
submit questions for the record, and I would turn to Senator
Casey for any final comments.
Senator Casey. Chairman Collins, thank you for holding this
very, very important hearing today. In my second line of my
closing remarks, I crossed out ``scammers and con artists'' and
put ``criminals.'' I am going to read it as she suggested. The
criminals, because that is the right word, the criminals who
steal from our veterans are the worst kind. As I said in an
earlier interview, the scum of the earth. I do not know what
more I can say. There are just so many ways to describe how bad
they are.
After a commitment to serve our Country and defend our
freedom, veterans should not have to fear answering the phone
or being confronted by perpetrators of fraud. No one should,
veteran or not.
As I said to LaVerne earlier, I am not a veteran, but I
would have sent the $20, then the $25 and $35. I think a lot of
people would.
This Committee has consistently worked to combat frauds and
scams and will continue to do so, but I am pleased that we held
this hearing today ahead of the Veterans Day holiday coming up
next week.
The criminals perpetrating these schemes will undoubtedly
double down in the coming days, which means those of us trying
to prevent them from being successful must also double down,
and I hope the VA will do that as well.
I want to thank the Chairman again for her willingness to
have this hearing, and thank you to each and every one of our
witnesses for being here today, and of course, thank you to our
veterans for what they have contributed to our Country. We will
say Happy Veterans Day early. Thanks very much.
The Chairman. As the daughter of a World War II veteran who
was wounded twice in the Battle of the Bulge, this is an issue
that matters greatly to me as well, and I am sure we will
continue our efforts to combat it, as I know our witnesses
will.
Thank you all for being here. This hearing is now
adjourned.
[Whereupon, at 11:23 a.m., the Committee was adjourned.]
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APPENDIX
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Prepared Witness Statements
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