Today TaxMama® wants to talk to you about the latest con games affecting people you know – especially seniors.
Dear Friends and Family,
I just heard the most frightening story. Unfortunately, it’s true.
An elderly woman is trying to figure out how to pay taxes on a major withdrawal of funds from her retirement account. Although this starts out as a tax problem, that’s just the symptom of the problem. The disease goes much deeper.
This woman met someone on the Internet who became her really good “friend.” He convinced her that he was a millionaire and after a while, told her a story about someone being hospitalized, and needing funds – that he would pay her back. He was able to “prove” to her that he had a million dollars in a bank account. (By giving her an account number and phone number to call. Uh huh.)
She agreed to help him. How? By wiping out her total 401(k) account. Then, since it wasn’t enough, she borrowed money from a friend. How much in total? $250,000!
When her daughter started seeing these funds going out, she tried to get her mother to file a police report. But Mom was adamant. “This is a close friend that I’ve known for a long time.” But the daughter had never heard of this fellow. (Apparently, that’s what the victims are told to say.)
This is absolutely powerful stuff! These overseas con artists must be incredibly smart and smooth to convince someone who was otherwise business savvy enough to generate this much in a retirement account. In fact, they are well-trained. And they gain your confidence – which is why they are called “con” men.
We have long known about the Grandparent scam, where they call pretending to be a grandchild in trouble – and they get a few thousand dollars. But this is a new one to me. It’s not new to the FBI. They call it the Romance Scam. $250,000 this woman gave him!!!
How lonely does a person have to be to fall for this kind of persuasion? Even after her daughter tried to intervene, this woman trusted some total stranger instead of her daughter!
Friends, please, please, stand firm. When your parent or friend is sending money to anyone you don’t know, STOP IT! Even if they get angry with you.
And if it’s you! And you are believing someone you’ve never even met, about how much they care about you, and rely on you, and how they will pay you back…Even when they give you ways to “verify” who they are or how much money they have. None of it is true. Get advice from someone you DO know and trust before releasing a dime. And never, never, ever use money from your retirement savings or borrow funds. If you don’t actually have the cash on hand – just say “NO!”
Block them, or hang up on them. And, if you’re really smart, you will report them to the authorities. There is no way to find or stop these people if you don’t tell the cops. Sure, it’s embarrassing. Especially if you already gave them some money. And no, you won’t get the money back. But you might prevent someone else from getting scammed. And, by filing a police report, you will be able to write off the theft loss.
This nice lady refused to report it…so it’s not theft. She gave away $250,000 willingly. And still owes about $50,000 to a friend – and taxes on $200,000 of income – that SHE never got to spend on herself.
To make comments and toss in your own ideas, please drop into the TaxQuips Forum.
And remember, you can find answers to all kinds of questions about scams and other tax and business issues, free. Where? Where else? At www.TaxMama.com.