Putting a loved one in a nursing home is one of life’s hardest decisions. So you can imagine how devastating it is to discover that a trusted nursing home administrator has been forging a resident’s signature or stealing his or her assets. It can happen. This type of fraud can cost nursing home residents more per incident than frauds committed by opportunistic strangers or relatives. How can you protect your loved ones?

Estimated Losses

Although it peaks at year end, elder financial abuse occurs throughout the year. Americans age 60 and older lost an estimated $2.9 billion to financial exploitation, according to the Metlife study. This estimate exposes just the tip of the iceberg, however. It covers only reportedfinancial abuse cases involving senior citizens.

For each case of financial exploitation that authorities prosecute, the New York State Elder Abuse Prevalence Study estimates that another 44 financial exploitations go unreported. That’s why elder financial abuse has been dubbed “The Crime of the 21st century.”

The Trusted Thief

Most stories about elder financial exploitation focus on family or friends who abuse their roles as caretakers and guardians. News agencies also report numerous incidents of Medicare or Medicaid fraud that cost taxpayers millions of dollars each year. These high profile financial scams overshadow another costly scam perpetrated by trusted professionals — nursing home fraud.

Nursing home administrators commit an estimated 6% of financial exploitations, according to the Metlife study. But frauds committed by legitimate businesses — including nursing homes — tend to result in a higher average loss per incident than losses from friends, family members or strangers. In fact, nursing homes and other businesses caused 39% of the total losses from senior financial abuse.

Examples of nursing home frauds committed by bookkeepers, office managers and other nursing home administrators include:

• • • Diverted Social Security checks,
    • Forged or coerced signatures,
    • Checks written for cash or the administrator’s personal expenses,
    • Misappropriated nursing home account refunds,
    • Identity theft, and
    • Improper use of conservatorship.

One prosecuted case involves a business office coordinator of a convalescent and rehabilitation center in Mississippi. The individual pled guilty to 29 counts of exploitation of a vulnerable person and one count of conspiracy. She allegedly stole more than $100,000 from residents’ trust funds.

Protecting Your Loved One

You might wonder how a crime like this happens — and just how prevalent it is. One USA Today investigation reports that more than 100 cases involving thefts from nursing home trust funds have occurred in the United States since 2010.

So, what can you do to help parents, grandparents and other loved ones living in a nursing home from getting swindled?

Do your homework. When you’re selecting a rehabilitation or nursing facility, ask questions about the internal controls they’ve implemented to prevent and detect elder financial abuse:

• • • Does the facility conduct credit and criminal background checks on all employees (not just doctors, nurses and other caregivers)?
    • Does the facility have a written statement of residents’ rights?
    • Has the facility ever caught an employee stealing — and how was it handled?
    • Does the facility have formal policies and procedures in place to investigate fraud allegations?

Involve family members in financial matters. Many residents start in their facility’s assisted-living wing and move to rehab or convalescent wings as their needs change. Residents have the right to handle their personal finances — and people in assist-living arrangements often do. But it’s a good idea for high-functioning seniors to fill trusted family members in on their finances, including account numbers, names of advisors and personal balance sheets. They also might assign power of attorney to someone who’s trusted, unbiased and financially secure themselves.

As a senior’s cognitive abilities start to decline, family members may invoke financial power of attorney or be granted guardianship. Most facilities don’t mandate control over their residents’ finances. Relatives can retain control, although it can be time consuming to manage another person’s income and expenses.

If the nursing home handles a loved one’s finances, watch for these warning signs:

• • • Sudden changes in account balances, banks or professional advisors;
    • Unusual purchases or gifts to caregivers;
    • Unauthorized ATM withdrawals;
    • Unfamiliar signatures on checks or legal documents;
    • Unexplained disappearances of valuable possessions;
    • Unpaid bills, despite adequate financial resources; and
    • Deteriorated credit scores.

If you notice any of these red flags, notify the nursing home and your attorney immediately.

Listen to your loved ones. Above all, if an elderly relative reports financial exploitation, take him or her seriously. It’s easy to dismiss a complaint as part of a faltering mental condition, especially if the senior appears to be otherwise well cared-for. But the costs of elder financial abuse go beyond monetary losses and may include feelings of insecurity or loss of self-worth — especially if no one listens to them.

The good news is that if a nursing home administrator is convicted of stealing your loved one’s assets, the facility’s insurance will reimburse your economic losses. If a senior takes valuable assets — such as cameras, furniture or jewelry — into a nursing home, list and photograph the items to help support insurance claims if the possessions are lost or stolen.

To Catch a Thief

When nursing home employees are caught red-handed, it’s usually through an internal audit or a tip from a co-worker. But others may notice unusual trends, too.

Banks on the Front Line

Many states require banks to report suspicious withdrawals, coercive caretakers and other unusual behaviors. These obligations override a customer’s privacy rights, according to guidance issued by eight federal agencies in September, including the:

• • • Board of Governors of the Federal Reserve System,

    • Federal Deposit Insurance Corporation (FDIC),

    • Federal Trade Commission (FTC), and

    • Securities and Exchange Commission (SEC).

So, encourage senior relatives to get to know tellers, as well as to update their signatures and contact information at their banks or credit unions.

Bank employees can be an elderly person’s front line of defense. For example, the office manager of a Texas nursing home was caught when a bank teller noticed that endorsements on checks didn’t match the signatures on file at the bank. She pled guilty to stealing more than $350,000 from 110 residents — and was ordered to serve 10 years of supervised community release.

Take Matters in Your Hands

You can help protect a loved one from nursing home fraud by requesting monthly trust fund statements and copies of all receipts.

Although it’s prudent to examine these documents monthly, would-be fraudsters don’t know how often these records are reviewed. Just the idea that someone is looking over their shoulders is often enough to make dishonest people think twice about stealing. Frequent, unplanned visits and outings also dissuade fraudsters — and they give lonely seniors something to look forward to.