Foiling a Scam

October 23, 2009

Steve Rodgers

Alert CU staff thought something was wrong, and it was.

Bank of America didn’t catch it.

Citibank didn’t catch it.

Neither did Wells Fargo.

As employees at those banks were busy processing withdrawals, Joe Gonzales was busy draining 82-year-old Jack Whittaker’s accounts. In little more than a year, Gonzales had drained four of Whittaker’s bank accounts worth more than $100,000. Our cover photo was taken by a bank surveillance camera. It shows Whittaker filling out a withdrawal slip while Gonzales keeps a wary eye on the lobby.

Gonzales—an ex-felon—spent $50,000 of Whittaker’s money for a down payment on a house, $20,000 for new furniture, thousands more to pay off his truck and fix up his wife’s Cadillac, and $20,000 for a 14-day Hawaiian cruise, according to the Contra Costa Times.

And it could have been worse. Gonzales had convinced Whittaker to set up a trust naming him sole beneficiary. He stood to inherit the elderly man’s $400,000 home and more than $200,000 in annuities.

But employees at Delta Schools Federal Credit Union, Antioch, Calif., became suspicious when Whittaker came to the credit union to make a withdrawal the day after $23,000 was transferred out of his account. Whittaker was shocked to learn his account was nearly empty.

After that, credit union CEO Rob Greaff and his staff started keeping a close eye on the account. Alicia Schmid, a credit union teller who was aware of the red flags on the account, asked Whittaker about his plans for the funds. “I don’t know,” he said. “I just have to give somebody $500.”

That’s when Greaff went to the authorities with suspicions that Whittaker was being taken advantage of financially. And that set in motion a series of events that foiled an elaborate scheme to steal everything Whittaker owned. And it put Gonzales where he belongs—in prison serving a 10-year sentence for elder theft.

This story has a relatively happy ending, but many don’t. Our cover story is designed to help your credit union prevent similar cases of elder financial abuse.