The transactions, the lawsuit alleged, were ‘highly unusual’, as Yaffe had made only one wire transfer with Chase, several years earlier, for US$1,200 (RM5,676), sent domestically, the lawsuit claimed. The bank should have acted on obvious signs that Yaffe was being victimised in a case of elder abuse, the lawsuit alleged. — Photo by Joshua Hoehne on Unsplash
A year after her husband died of pancreatic cancer, Diane Yaffe of Redwood City picked up her phone in August 2022 and her already difficult life spun into a financial catastrophe.
That’s according to a lawsuit that accuses JPMorgan Chase Bank of facilitating the scam that stole almost all the 77-year-old widow’s life savings – US$1.8mil (RM8.51mil) – through fraudulent wire transfers.
When Yaffe answered her phone that day, a man who said he was from Amazon asked her to identify charges for expensive Apple computers, according to the lawsuit filed Monday in San Mateo County Superior Court.
When she said she did not recognise the charges, she was transferred to “Officer Peter James”, a purported Internal Revenue Service investigator who sent her an image of what appeared to be an official agency ID, the lawsuit said.
Yaffe, after caring for her dying husband, had “difficulty reaching out to friends and was relatively isolated”, according to the lawsuit. Her health issues included three years of shingles, head trauma, and weakening eyesight, the lawsuit said. “Yaffe reports that she lacks technological literacy and is ‘not good at computers’, which is common for people of her generation,” according to the lawsuit.
The fake IRS agent told Yaffe her Social Security number had been stolen and she was “now affiliated” with companies involved in money laundering and trading drugs and weapons, according to the lawsuit. He told Yaffe she faced seven to nine years in prison and a US$75,000 (RM354,750) fine, according to the lawsuit.
“To prove her innocence, the blackmailer told Yaffe that she would need to ‘safeguard her funds’ and to listen for further instructions,” the lawsuit said.
The IRS itself warns of “IRS impersonation telephone scams”, which the agency says in an online advisory are “making the rounds throughout the country.”
Yaffe, “terrified” about the IRS’s power over her finances, did what the fraudster subsequently told her: Go to Chase and Bank of America and make large cash wire transfers, according to the lawsuit.
At Bank of America, Yaffe asked to transfer US$193,500 (RM915,255), and four days later, another US$248,850 (RM1.17mil), according to the lawsuit. Her requests were denied, and Yaffe learned later that the bank’s management had met over her requests and suspected fraud, the lawsuit said.
The scammer had persuaded Yaffe to keep him on the line on her phone, and her phone in her pocket, while visiting banks, and when she went to Bank of America a third time, he heard talk that led him to believe bank staff were onto the fraud, according to the lawsuit.
He became “impatient and angry” and demanded that Yaffe withdraw her money from Bank of America, and over the next two weeks, she did, and transferred her money to Chase, the lawsuit said.
On Sept 13, 2022, Yaffe wired US$99,850 (RM472,290) from a Chase branch to an overseas bank, the lawsuit claimed. When a bank staffer asked the purpose of the transfer, she told him, as the scammer had coached her to do, that it was for an “alternative healing business” in China, the lawsuit alleged. The staffer gave her a “perfunctory warning” that transferred funds could not be returned, then signed off on the transaction, the lawsuit claimed.
Over the next month, Yaffe made five more transfers from Chase branches in amounts ranging from US$248,850 (RM1.17mil) to US$352,950 (RM1.66mil), with a bank staffer asking each time about the purpose of the transaction, the lawsuit claimed.
On her sixth attempt, in Menlo Park, “an employee pulled Yaffe into a private room and told her that he would decline the transaction, stating, ‘If you were my mother, I would not let you do this’,” the lawsuit claimed.
“Nevertheless, on the very same day that Chase – Menlo Park denied the transfer, Yaffe was able to take a short drive to nearby Chase – San Carlos and transfer US$286,000 (RM1.35mil),” the lawsuit alleged.
The transactions, the lawsuit alleged, were “highly unusual”, as Yaffe had made only one wire transfer with Chase, several years earlier, for US$1,200 (RM5,676), sent domestically, the lawsuit claimed. The bank should have acted on obvious signs that Yaffe was being victimised in a case of elder abuse, the lawsuit alleged.
Chase in a statement described the scam as unfortunate. “Consumers should always be suspicious when someone they don’t know asks them to urgently send money,” the bank said. “Scammers impersonate companies, banks, government agencies and even family members to try to trick consumers. We urge all consumers to ignore phone or internet requests for money or access to their computer or bank accounts.
“When customers visit our branches to complete wire transactions, our bankers ask questions, raise awareness around various scam scenarios and provide clear warnings that once a wire is sent, you may not be able to recover your money.”
For Yaffe, the ordeal continues to take a heavy toll, according to her lawsuit. Left with about US$87,000 (RM411,510) to cover her living expenses in retirement, she sold her house so she can pay her bills, the lawsuit said.
“Although her social circle and support system had shrunk during her husband’s sickness and death, it became almost non-existent following the scam,” the lawsuit said. “Yaffe entered into a deep depression and didn’t speak to any family or friends. She stopped taking her beloved Newfoundland dog to the park, even though she used to go to the park daily.”
San Francisco lawyer Kathryn Stebner, who is not involved in the case but specialises in elder-abuse issues, said such scams are “rampant” and large banks often do a poor job of preventing fraud-linked wire transfers.
“They’re not making it a priority,” Stebner said. “The people who are the front gate aren’t trained.”
Stebner is suing Bank of America on behalf of an 85-year-old San Bernardino man, Chan-Hie Kim, who was allegedly told by scammers to transfer his US$2mil (RM9.46mil) in retirement funds into his Bank of America account. Kim sent the money overseas in dozens of wire transfers, the lawsuit in San Francisco County Superior Court claimed.
As in Yaffe’s case, the bank is accused of ignoring red flags indicating fraud. Bank of America, in a court filing, said, “banks owe no duty to police customer accounts.” – Bay Area News Group/Tribune News Service
