ROSSMOOR -- Dozens of silver-haired seniors listened intently Tuesday as some of the country's top attorneys and a cadre of white-collar crime investigators taught them how to avoid becoming a victim of a Bernie Madoff-type fraud scheme.
The four-hour summit on investor fraud was the first and only California stop on a nationwide tour prompted by a spike in fraud cases the past three years, experts said. Seven U.S. Attorneys from the West Coast, the head of the Department of Justice's fraud unit, the SEC regional director and a group of investment fraud experts from the FBI, Google and other agencies spoke on various topics.
U.S. Attorney Melinda Haag of the Northern District, which includes the Bay Area, and a colleague noticed there was a need after finding that in the previous 18 months, 85 of the 93 U.S. Attorney districts had prosecuted a significant investor fraud case, exceeding $20 billion and 100,000 victims. Haag, A UC Berkeley law school graduate whose friend's mother lives in the Rossmoor retirement community near Walnut Creek, thought Rossmoor would be the perfect venue for the event.
"This is our audience," she said. "Seniors are often targeted, and our point is to educate."
The older generation has significant savings, and retirees are trusting, polite, often lack technological skills and are frequently home to take scam phone calls, experts said.
"We're the perfect targets here," said Andy Okumoto, 80, of Rossmoor.
Jim and Shirley Peterson can vouch. The Arizona retirees, who spoke at the summit, lost $300,000 in an investment scam introduced to them through their best friends.
"It really sounded too good to be true but they were our best friends and telling us how much money they were making and they were showing us their books," said Jim Peterson, who blew his nest egg accumulated from decades working at John Deere.
"If we can just help one of you today I will fell really good about it," his wife told the crowd.
Investment scams, often Ponzi or pyramid schemes, change over the years, often shaped by current events. In past years, hedge funds were big, where fraudsters would persuade investors they could gain access to what was previously only for the ultrarich. These days, oil, gas and gold schemes are hot, along with fraudulent "crowdfunding" opportunities in which investors are told they can chip in to help fund a startup, experts said.
Although featuring different products, the schemes are all the same. New investor money goes toward paying old investors -- if any money goes to investors at all -- with the scam artists pocketing most of the money and often spending lavishly.
Many of these scams are coming to light now, said Denis McInerney, chief of the Department of Justice's fraud department in Washington D.C.
"In a financial crisis and tough economic times people start asking for their money," he said. "That is why the jig is up for a lot of these fraudsters."
U.S. Attorney Jenny Durkin, who oversees the Seattle area, brought up an old axiom.
"If it's too good to be true," she said, "why would they share that info with you?"
Contact Matthias Gafni at 925-952-5026. Follow him at Twitter.com/mgafni.