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AG Derek Schmidt seeks authority to compensate seniors who become victims of financial fraud

Release Date: Aug 12, 2020

TOPEKA – (August 12, 2020) – Federal funding to compensate victims of crime should be made available to senior citizens defrauded of their life savings, Kansas Attorney General Derek Schmidt today told congressional leaders.

In a bipartisan letter signed by 40 state and territory attorneys general, Schmidt asked Congress to expand the 1984 Victims of Crime Act to allow states to reimburse seniors for certain fraud losses. The provisions are contained in Senate Bill 3487, known as the Edith Shorougian Senior Victims of Fraud Compensation Act. The bill is named for Edith Shorougian, a Wisconsin senior, who along with her family was defrauded out of more than $80,000 by a longtime financial adviser.

“When seniors become victims of fraud, the harm often is much deeper than the financial loss,” Schmidt said. “The damage from losing a lifetime of savings cannot be measured only in dollars and cents. Expanding the scope of the VOCA through Edith’s Bill will give states the option of a vitally important tool to help victims recover at least a portion of what was lost and to mitigate some off the associated harms.”

Current federal law provides for state-run victim compensation programs, which can help pay certain costs incurred by victims of violent crime through no fault of their own. The proposed federal legislation would expand that program to also assist certain senior victims of financial fraud.

The program is funded by penalties and fines paid by convicted criminals, not taxpayer dollars. The fund reimburses states for 60 percent of payments to victims of crimes, but only for certain eligible items such as medical bills, lost wages and funeral and burial expenses. Edith’s Bill also would make more funds available by directing fines and penalties and related funds from white collar prosecutions into the program.

Passage of Edith’s Bill would not mandate that states provide compensation to senior fraud victims but would make available the option to use federal funding for that purpose. In Kansas, funds are distributed to eligible victims through the Crime Victims Compensation Division within the Office of Attorney General.

During his service as attorney general, Schmidt has made justice for seniors a priority by targeting elder abuse, consumer fraud and related issues. Seniors can be particularly vulnerable to predators becomes of their accumulated income and assets, potential cognitive decline and dependence on others to care for them.

A copy of the letter to Congress can be found at https://bit.ly/3gRwB7u.

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