Big Banks Watched as Con Men Wiped Out a Widow’s Life Savings (2024)

Across the Hudson River Valley, the trees were turning yellow and red when 83-year-old Annette Manes began showing up at branches, draining them of cash.

Her first try failed. The widowed social worker entered the bank’s brick building in the college town of New Paltz and asked to withdraw $39,000 in $100 bills — more than the tellers could scrape together. Over a week, she returned to Chase a few more times, taking a total of $169,000 out of her account. It was barely the start.

Nine months later, her son, Peter, was in Singapore for a medical conference, bleary-eyed from jet lag. The Yale University physician was heading to his hotel room after dinner when he glanced at his phone and saw an urgent message from adult protective services.

That’s how Peter learned that his mother, who had raised him alone, had quietly socked away enough money to become a multimillionaire — and that con artists impersonating JPMorgan’s fraud department and US agents had tricked her into handing them about $1.4 million. They also saddled her with six figures of credit-card debt and a crushing tax liability. Now 85, her nest egg is gone.

Frauds like these are exploding across the country as criminals target the record wealth controlled by elderly Americans.

It’s raising a burning question: How should a bank react if a customer’s behavior abruptly changes and their money starts whooshing out the door in a series of withdrawals, wire transfers and lavish international spending sprees?

In the case of Annette Manes, it began at JPMorgan in three bursts — each round bigger than the last.

Branch employees at JPMorgan and Bank of America Corp. eventually became concerned she was the victim of an ongoing crime. Nobody called law enforcement. JPMorgan said its credit-card arm eventually contacted adult protective services. Even then, more time passed before a social worker had enough information and authorizations to alert her family.

It took 279 days after Annette’s first big withdrawal for someone to contact Peter, who stopped the scam on a weekend.

It’s a snapshot of a broader US crime wave. Annual fraud losses suffered by people over 60 shot up 255% to $3.4 billion in the past three years, according to complaints filed with a Federal Bureau of Investigation internet crime center. Yet that tally is a mere fraction of the total, the FBI says, because most reports don’t specify ages. A first-of-its-kind study by the AARP estimates yearly fraud losses by people over 60 now exceed $28 billion. Media reports about retirees losing tens or hundreds of thousands of dollars are proliferating.

The con targeting Annette is in a league of its own. It coursed through the nation’s three largest consumer banks, two major investment firms, a regional lender, credit union and some of the world’s biggest credit-card issuers. It showcases how the industry responds to signs of elder fraud.

For this story, Bloomberg interviewed Annette and her son, and reviewed her financial records to illustrate what her sudden shift in behavior would have looked like to her longtime bank, JPMorgan, and then to firms where she opened accounts as the con expanded.

It highlights the impact of US laws, which strongly incentivize banks to head off certain crimes, such as credit-card fraud, in which lenders have poured tens of billions of dollars into technology to prevent losses that they end up shouldering. But banks have long staked out the position that US laws immunize them when customers are tricked out of their savings. On that front, banks offer educational materials to customers and train employees to watch for trouble — a line of defense that Annette’s scammers easily navigated.

Her case also reveals a startling breakdown in the way banks flag potential crimes to government authorities.

Adult protective services offices say they’re awash in vague tips from financial firms. In Ulster County, where Annette lives, the local social-services office said referrals often come from banks’ call center employees, who lack key information and decline to get more. Such tips can hit an immediate dead end. APS social workers aren’t allowed to pursue a case unless victims appear to meet three criteria: They are impaired, require assistance and don’t have anyone else willing to help.

“If an adult does not meet these criteria, APS provides information and recommendations and closes the referral at intake,” the social-services office said in a statement. If there’s uncertainty, the office said it can conduct an inquiry, which takes up to two months. It declined to comment on Annette’s case.

“We’re sorry Ms. Manes fell victim to a highly sophisticated scam,” JPMorgan said in a statement. It noted that the con artists coached her into making statements that misled bank employees. “We are helping law enforcement with their investigation and we continue to educate our customers about scams and how to avoid them.”

A representative for Bank of America said it takes swift action when it spots unusual transactions by at-risk clients.

“Unfortunately, despite our efforts and warnings, sometimes clients are insistent they are not a victim of a scam even when red flags are present, and they proceed with the transactions,” the bank said in a statement. “When that happens, we may have little choice but to make a decision to close the account to prevent further exploitation, return the remaining funds and contact adult protective services.”

Peter has since recovered less than $25,000. His attempts to free Annette from credit-card debts have been hit-and-miss.

Capital One Financial Corp. wrote off her entire $10,000 balance, telling Bloomberg “we take fraud and scam prevention and detection very seriously.”

JPMorgan wiped away almost $29,000 owed on two cards that the fraudsters opened in her name, but in late July, the bank told her it was sending another $17,000 balance to collections.

“I guess I was expecting a greater level of protection,” Peter said. “And I realized there was almost none.”

Annette has a determined spirit. Peter was in preschool when his dad died in 1980, leaving her to make ends meet. For 45 years, she worked in New York’s labor and education departments, helping people with disabilities to find jobs. She paid off her three-bedroom rambler and helped Peter through medical school on a salary that peaked at $73,000 before her retirement in 2017.

The secret to that success is obvious in her financial records: She spent almost nothing.

When her employer sent her on work trips, Annette packed food from home and deposited her stipend, saving up for a blue Honda. She spent so little that a social-services agent once expressed concern, asking what she had done with the money it sent for Peter’s care.

“I said to them, ‘Is it wrong to save it?,’” Annette recalled. “They said, ‘No. But people don’t do that.’”

All she told her son about money was that she didn’t want to be a burden. He figured she was scraping by, and that he would eventually help cover her expenses.

“Honestly, I didn’t think my mom really had much,” said Peter, 48. “When she goes to buy my kids presents, I’m like, ‘Don’t get them anything, I don’t want you spending money.’”

Her JPMorgan Chase checking account, the main gateway to her finances, inched higher for years, approaching $100,000. She bought groceries at ShopRite and a farmers market, met friends at a Texas Roadhouse in Poughkeepsie and treated her grandchildren to the zoo.

She was mindful that people might try to fleece her. Once, a caller claimed that her young grandson was in jail and needed cash quickly. She refused.

But for reasons Annette still struggles to understand, she began talking with the person who rang her home phone in October 2022. The conman said his name was Steve Baxter and that he worked in the fraud department at JPMorgan, which had just discovered that an employee had sold her information to criminals. He introduced her to a colleague he called Trevor Bingley, who said he was a fraud manager. Annette was skeptical.

“I hung up on them a couple times, and they kept calling,” she said. “Why I didn’t continue to hang up on them, I don’t know. There’s no way to know that.”

Prime Targets

There’s a reason criminals are targeting America’s elderly. Thanks to a long runup in stocks and home prices, the country’s retirees have never before commanded so much wealth.

They also have more direct access to their money. Fewer employers offer managed pensions, leaving people with the keys to their 401(k) plans, brokerage accounts and other vehicles.

Assets held in defined contribution plans, including 401(k)s, swelled to $10.6 trillion last year, more than triple what it was at the turn of the millennium. Two years ago, the median savings of households aged 60 to 79 shot past $400,000.

People are also living longer, raising the prospect that they will enter cognitive decline while handling their finances.

In the eyes of criminals, they’re prime targets.

Going Undercover

After a career assisting people with disabilities, Annette couldn’t resist when her longtime bank said it needed help catching a rogue employee and criminals preying on retirees.

The pair of scammers essentially asked Annette to go undercover as a victim, making it appear her money was getting siphoned away. For the operation to work, it was essential she keep everything secret, even from the bank’s branch staff and her family. When it was over, they would reimburse her, she said.

Baxter told her when to visit JPMorgan branches and how much to withdraw. By the time her bag of $100 bills at home weighed as much as a half-gallon of milk, she left it alongside a short wall by her driveway for a handler. She watched from a window as someone in a hoodie and sunglasses arrived in a vehicle to get it. “I never got a license plate because I wasn’t looking for a problem,” Annette said.

As the first burst of withdrawals emptied her JPMorgan account, she replenished it with her holdings at Vanguard. Baxter’s instructions kept coming.

“I would get up in the morning, and look at the cell phone, and there was all this kind of stuff,” Annette said. She jotted out tasks in a notebook, then took care of them between lunch meetings with friends or visits with her family.

Sometimes handlers told her to write checks from her Vanguard account, then either deposit them into strangers’ accounts or drop them into a mailbox, Annette said. One destination included a Bronx apartment house.

Baxter also told her to add the name “Rhan Walter” as an authorized user to all her credit cards. Soon, someone was ordering footwear from Nordstrom and other items to her house. Like the cash, Annette would leave them by the wall for pickup. Eventually, the criminals opened more Chase cards in her name.

Balances began to skyrocket. Before the end of 2022, spending on her Chase Slate card shot past $17,000. Though Annette hadn’t traveled overseas since before Peter was born, her statement listed $500 spent on a Canadian budget airline, $2,300 for Panama’s Copa Airlines and a stay at the JW Marriott in Panama City. There was also a $13,500 balance transfer.

Meanwhile, Annette opened another bank account at Bank of America, loading it with more than $400,000 as she prepared for withdrawals.

Banks say they train their tellers to watch for signs that vulnerable customers are being exploited. But the con artists working with Annette coached her on how to respond. Sometimes she might say a contractor was working on her house and preferred cash, or that a niece needed help with college. Her handlers suggested some explanations, but she got good at making them up, too.

If branch employees initially seemed suspicious, she said, they typically listened for a moment then handed over the cash.

Banks’ Defenses

Banks have long staked out the position that they aren’t responsible if a customer loses their savings to criminals, so long as their own security systems weren’t breached.

The industry points to a 1978 law that — somewhat ironically — was meant to protect customers from unauthorized transactions as banks began offering electronic money transfers, such as through ATMs. The Electronic Fund Transfer Act limits customers’ losses to $50 if such transactions are reported quickly, but banks say the law excludes wires — a common tactic scammers use to liquidate a victim’s accounts and quickly move the funds to their own.

Other regulations, such as the Uniform Commercial Code, set out specific rules for wires but exempt banks for losses if the request was made in good faith and passed through “commercially reasonable” security protocols. While those mechanisms might differ between banks, they can include phone calls, text messages or emails to determine a customer’s identity or to authorize a suspect transaction.

Banks have said this shields them from claims where funds were stolen through phishing or other fraudulent means — arguing that customers have an obligation to protect their accounts and personal information.

Even less regulated is what duty banks have if potentially vulnerable customers start turning their life savings into sacks of cash.

Meeting Her ‘Agent’

Annette’s handlers made sure her belief in the con was ardent.

At one point they asked her to drive her Honda to a post office parking lot in New Paltz to give cash to a man she thought was a federal agent. “I stayed in the car,” she said. “I put the passenger side window down and handed it to him.” Without speaking, the man gave her what appeared to be a $3 million cashier’s check with a Chase logo.

Baxter later told her that the check would more than cover her costs when her work was complete. Written across the memo line were two words: “INVESTIGATION RETURNS.”

Her handlers also divulged their supposed target: Adrian Lawrence. She searched online and found a recent Justice Department press release noting that a Jamaican national by that name had just been extradited to the US from Panama to face charges of defrauding the elderly. Lawrence pleaded guilty to a fraud charge and is scheduled to be sentenced later this year.

So Annette wasn’t bothered when Bank of America closed her account that February. She doesn’t remember whether it offered any explanation. Her bank statement doesn’t mention one.

Her relationship with JPMorgan was also growing strained. Sometimes her phone rang, and an employee would ask if she was aware of a transaction. She always said she was.

By the end of February, Annette had transferred more than $950,000 from her Vanguard funds into the two banks. From JPMorgan, she would eventually pull more than $730,000 for the criminals.

Later that year, when Peter tried to untie what happened, Chase sent him a letter saying that its branch staff had questioned Annette about her transactions and that she was always calm and insisted she wanted to complete them.

The bank said that in March — several months into the con — it blocked Annette’s attempt to wire a large sum of money because branch staff didn’t buy her explanation that it was for a new car. Annette was offended when employees said they were “concerned she was being scammed,” according to the letter.

JPMorgan also noted it contacted Ulster County Adult Protective Services, citing her increased credit-card spending. It didn’t specify when.

That April, JPMorgan sent her a check for $224,995.80 so she could bank somewhere else. She took it to a regional lender, M&T Bank, which was almost instantly concerned. When she tried to make a large withdrawal there, the bank put her on the phone with someone from its fraud department. When she tried another M&T branch, it put the same person on a call with her. That account was closed within a month. An M&T spokesperson declined to comment.

Her next stop was Wells Fargo. Baxter sounded relieved.

“I was told, ‘We deal with Wells Fargo so it will be easier to get things through,’” Annette recalled. “These phony people, whoever they were, had bank accounts at all these banks.”

She opened her account with $131,000 and within a week resumed making large withdrawals.

Tax Bill

The closest anyone in Annette’s life came to discovering the fraud was her longtime tax adviser, who realized while preparing her filing that her withdrawals from Vanguard had generated a $64,000 tax bill. Annette was stunned.

“I broke down and I went to the car,” she said. “He came out to the car and said, ‘You come back in. I don’t want you to drive home.’ And I kept saying, ‘I’m OK, I’m OK.’ And I sat in the car for a while.”

Peter had an inkling something was amiss with his mother but couldn’t get to the bottom of it. Was she sick? Did she have a boyfriend? He tried to break into her phone when she wasn’t looking, but couldn’t come up with her password. He had no idea it involved her finances.

That Easter Sunday he remembers his mom stepping away during a visit to his house. Peter could hear her muffled voice talking on the phone in one of the bedrooms. Afterward he asked her about it.

“I can’t tell you yet,” Peter remembers Annette telling him. “But when I do, it’ll blow your mind.”

By late May, the scheme was getting so bizarre that her handlers sent her a bill, seeking almost $300,000 in investigation fees. Attached to their invoice was a memo on letterhead for the US District Court in Manhattan. They thanked her but said the government still needed to liquidate some of her accounts. It listed six — along with their balances — and said she could choose which to drain.

Meanwhile, spending on her credit cards continued in Jamaica, Mexico and Panama.

‘Know Your Customer’

The indignity is familiar to many credit-card users: Attempt an unusual purchase and up pops a word: “Declined.” Banks spend heavily on technology to track customers’ habits so they can instantly spot aberrational behavior and thwart fraud.

For banks, it’s one thing to block what is essentially a loan. It’s another to break with the sacred tenet of holding deposits: that the money belongs to customers.

But firms shouldn’t forget their other duty to help customers build their assets, according to Judith Shaw, a former securities regulator in Maine and an elder-justice advocate. A few years ago, she successfully pushed for and helped write a federal law aimed at removing potential hurdles for firms to contact law enforcement if they spot suspicious transactions involving elderly customers.

“They are absolutely on the front lines and they can’t close their eyes to this stuff,” she said in an interview, arguing that the industry has the resources to do more. “You need to be thinking about what is available to your branches, the people in those branches and the people they serve.”

US efforts to catch drug lords, fight terrorism and punish rogue nations should theoretically help head off scams, too.

Federal laws require banks to watch out for illicit money flows and to “know your customer,” verifying identities of account holders. If victims start wiring money to or depositing funds in criminals’ accounts, the industry should at least know who got it.

Banks also are supposed to routinely flag cash transactions exceeding $10,000 to the US Treasury Department for further analysis. When an account generates a series of such transactions in a short span, banks typically take a closer look as well.

Even then, the industry and authorities have mostly focused on catching the world’s most dangerous people — not so much on customers being led astray.

‘It’s a Big Mess’

“I told them not to call you,” Peter remembers his mom telling him when he called from Singapore. She was annoyed that Ulster County Adult Protective Services refused to accept her explanation that everything was OK.

Finally, she let him in on what was happening.

Peter spent a night making calls before flying home. He reached someone at JPMorgan who said it had no employees named Steve Baxter or Trevor Bingley. He also contacted the police and asked if they could do a wellness check.

“I thought she’d lost her mind,” Peter said. But an officer told him she seemed fine.

In the hours after they spoke, Annette went to Wells Fargo and ordered a cashier’s check for $90,000, with instructions on where it should be deposited.

She also texted Baxter that her son and the authorities were now involved. It was their last exchange before her handler disappeared. “It’s a big mess right now because it was a private investigation,” Baxter wrote.

When Peter got home, he rushed his mom to a police station to file a statement, and when he heard about the Wells Fargo transfer, he stepped outside to call the bank and halt it. Surely, he figured, such a large amount would take days to clear.

“I got somebody on the phone who basically said ‘Nope. Sorry. It’s gone,’” Peter said. Adding to his frustration, he learned the money was deposited into another Wells Fargo account.

Wells Fargo later told Annette in a letter to take it up with the recipient, whom she didn’t know. After Bloomberg contacted the bank for comment, it returned $22,000 to his mom. That amount doesn’t match any transaction. The bank didn’t elaborate.

“In this case, despite our efforts to help the customer, she was the victim of a heartbreaking scam,” a Wells Fargo spokesperson said in a statement. “We took action against the bad actors, and to support the customer, including the recovery of some of her funds.”

Wells Fargo said Annette insisted on having access to her funds, despite warnings from staff about possible scams. The bank said it contacted adult protective services within the first month of her opening an account. Annette also never provided them with information about potential relatives to contact, according to the lender.

JPMorgan denied Peter’s request that it return more than $730,000 to his mother, disputing his argument that it had a fiduciary duty to protect her from thefts like this. In an Oct. 27 letter, the firm said a thorough investigation showed she gave branch employees explanations for her withdrawals and that she became “displeased” when pressed.

“Chase does not bear the responsibility for losses resulting from the transactions your mother performed or otherwise authorized,” JPMorgan wrote.

After the fraudsters stopped calling and texting Annette, they were replaced by the banks to whom she owed money. Some contacted her twice daily, pressing her to pay down balances.

Peter eventually reached a team of federal prosecutors in Manhattan, who interviewed him and Annette for several hours this year. That office declined to comment. He also reached out to several lawmakers, who either didn’t respond or said they couldn’t help.

“To this day, there’s a lot of things where people tell me ‘I’m sorry, but there’s nothing I can do,’” Peter said. “At some point somebody can do something. I just don’t believe we’re all so helpless and so powerless.”