Investment Scams Targeted at the Elderly

A 46-year-old South Florida Man pleads guilty to Multi-Million Dollar Investment Scams in Key West, Florida.

Recently, Florida has recorded a rise in complaints involving investment scams, primarily due to the Covid Pandemic. Criminals have invented various ways to exploit the uncertainties caused by the pandemic, and it seems most have become victims of their craft. 

Several schemes have been introduced or emphasized to cub the effect of the pandemic on income flow generally. Con artists target these schemes to exploit investors. Some examples of these schemes are the work-from-home and pyramid schemes. More and more people fall into employment scams as most Americans remain unemployed. Ponzi schemes are reorganized and redesigned to look legitimate.

Sadly, people in their 50s and 60s are more likely than others to be victims of losing money to investment scams. However, it is no news that the elderly are susceptible to these schemes; the case of Isaac Grossman, who directed a fraud scheme targeted at the elderly, buttresses this concept.

46-year-old Isaac Grossman, of Parkland, Florida, on Thursday, July 15, 2021, pled guilty in the federal district court in Ft. Lauderdale to wire fraud and mail fraud. He also asserted guilty to money laundering charges for directing an elder fraud scheme. He sold stock in his fictitious technology company Dragon-Click, based in South Florida, to elderly investors across the country and embezzled the money for personal use. 

Grossman’s pitch to potential investors was that Dragon-Click was developing an internet application to revolutionize their online shopping experience. His program promised to enable users to find desired products online. Prospective clients would compare prices among retailers by simply uploading a picture. The program would then provide the link to the website the user can purchase the item. This process sounds good, but how did Grossman raise $2.4 million in investment funds for his company from September 2014 through April 2018? 

Grossman admitted in court that he falsely told investors that he would use their investments to complete the development of the application. He also told investors their funds were for legal fees regarding the application’s patent. He admitted to falsely telling potential investors that they would double, triple, or quadruple their investment. This outrageous expectation was because Dragon-Click planned to sell to a large technology company like Amazon, Google, or Apple for over $1 billion. 

Grossman omitted his runnings with the authorities. He was barred permanently by the Financial Industry Regulatory Authority (FINRA) from acting as a broker-dealer or association with any broker-dealer firm and permanently banned by the U.S. Commodity Futures Trading Commission (CFTC). He sold this scheme to elderly retirees across the nation.

Grossman used the money for his expenditure. He admitted spending $1.3 million of investors’ funds on diamond jewelry, home mortgage payments, tuition fee for his children’s education, and luxury cars. He also attested to gambling an alleged sum of $426,000 and other personal expenses. Grossman’s wife Adriana allegedly spent $293,000 of investors’ funds between 2014 and 2016. 

The Grossman’ LLC, Dragon Management, was organized by Adriana, listing her as the sole signor. 

Isaac Grossman was scheduled for his sentence at the federal district court by U.S. District Judge Raag Singhal on September 23, 2021. Grossman and Adriana were also previously hit with a civil lawsuit by the SEC (Securities and Exchange Commission) in June of 2018. The United States Acting Attorney for the Southern District of Florida, Juan Antonio Gonzalez, commended the FBI and SEC for their role in the investigations and assistance by SEC. Grossman faces up to 50 years in prison. 

Isaac Grossman is just one of many who defraud the elderly. Sean Kerwin Bindranauth of Key West was, on Wednesday, October 6, 2021, found guilty of laundering $1 million from lonely older women. He will receive his sentencing by U.S. District Judge K. Michael Moore on January 10, 2022, at 1:00 pm at the federal district court in Key West. He faces a maximum statutory sentence of 20 years in prison for money laundering conspiracy. The 44-year old also faces 20 years in prison for each money laundering count and five years in jail for unlicensed money transmitting. 

On December 13, 2021, former financial advisor Paulo Ricky Meta got a 168 months sentence in federal prison for real estate investment fraud. The activities of the 58-year-old caused his clients to lose more than $12million. Most of his victims were older adults who invested all their retirement savings. The list is long, and these con acts targeted at the elderly seem to be a lucrative discovery for criminals. 

Following these activities, the Florida Department of Justice has prioritized fighting these crimes targeted at the elderly. FBI agents work closely with partner law enforcement and regulatory agencies such as the Internal Revenue Service (IRS), the Commodity Futures and Trading Commission (CFTC), the Securities and Exchange Commission (SEC), the U.S. Postal Inspection Service, the Treasury Department’s Financial Crime Enforcement Networks, the Financial Industry Regulatory Authority (FINRA) among others. 

Seniors and everyone generally should become cautious and literate to a safe extent to decipher con methods. Watch out for unlicensed salespersons and those who present their business with complicated jargon and language too difficult to understand. 

At times, when offered a guaranteed high return on investment, and it sounds too good to be true, often it is too good to be true. They come with unsolicited offers like free money and other incentives and too much pressure to take advantage of the offer. They come in different ways and when you are unsure, relax, take your time, check, do a double-check, and check again.