Authorities target senior fraud

It started with a phone call, or that's how Reuvo Bagley remembers it.

On the other end: a "very nice" woman selling an insurance policy that Bagley said sounded too good to be true, though she can't quite recall what made that policy different or better than any other.

"I trusted the saleswoman, is I guess what it was," Bagley said. "She was a very nice person."

It wasn't until later, after a dinner meeting with investment adviser Kelly F. Bills, that she began to wonder. And not even then, really.

"The policy took me $2,000 to get it, and then they were taking out the yearly payment out of the principal," said Bagley, who is in her 80s. "I didn't know how it worked."

Here's how it "worked," according to Bills, who spent about a year working on Bagley's behalf as part of his affiliation with The St. Jude Project, a Utah-based volunteer group he founded to retrieve money for seniors who've been victimized by investment or other financial companies:

The Bagleys were advised by an investment adviser from their bank, who advocated using their life savings to buy an insurance policy that ostensibly would provide tax-free income for their retirement while at the same time adding to the estate they left to their children. In reality, Bills said, the policy was grossly overpriced and did not provide an income payment of any kind.

"What I remember is that they made it sound like it was the only way to go," Bagley said. "It was kind of over my head. She (the woman who sold Bagley the policy) was a really nice lady, and that's why I was hesitant to try to get the money back. I didn't want to hurt her. But then I realized it just wasn't a very good deal."

In the end, Bagley said, Bills retrieved the entire amount of her investment in the policy — about $60,000, as she recalls, plus interest. But others aren't so lucky. And, according to a passel of studies recently released by senior-focused organizations, as the baby boomer generation reaches retirement and beyond, seniors are, and will be, prime targets for fraudsters.

A new survey from the North American Securities Administrators Association found that an estimated 44 percent of all investor complaints to state securities regulators are by seniors. About a third of all enforcement actions taken by state securities regulators involve senior investment fraud, the NASAA reported.