Question

Some defined benefit pension plans have been subject to abuse and some managers have gone to prison for their illegal activities. Can you cite and any particular case where this happened and explain why it did?

Answer 1

In some ways financial abuse is very similar to other forms of elder abuse in that it can be devastating to the victim and is frequently traced to family members, trusted friends, and caregivers. But unlike physical abuse and neglect, financial abuse is more likely to occur with the tacit acknowledgment and consent of the elder person1 and can be more difficult to detect and establish. As a result, financial abuse requires a distinct analytical perspective and response. Unfortunately, these differences are often overlooked.

Although the amount of attention given to it has increased in recent years, most commentary rests on a relatively thin empirical base and draws heavily on anecdotal observations and relies (perhaps inappropriately) on research and analysis addressing other forms of elder abuse, child abuse, and spouse/partner abuse. Because financial abuse is frequently addressed in conjunction with other forms of elder abuse, a brief overview of elder abuse in general is provided before turning specifically to financial abuse of the elderly.

What constitutes elder abuse is defined by state law, and state definitions vary considerably (U.S. General Accounting Office, 1991; Kapp, 1995; National Center on Elder Abuse, 2001; Moskowitz, 1998b; Roby and Sullivan, 2000).4 Not surprisingly, researchers have also used many different definitions in studying the problem (Choi and Mayer, 2000; Kleinschmidt, 1997; Macolini, 1995; National Center on Elder Abuse, 2001; Pillemer and Finkelhor, 1988).5 The variation in definitions has been cited as a significant impediment to elder abuse recognition, management, research, and analysis (U.S. General Accounting Office, 1991; Kleinschmidt, 1997; Lachs and Pillemer, 1995; Moskowitz, 1998b; Nerenberg, 2000a; Roby and Sullivan, 2000; Rosenblatt et al., 1996).

Elder abuse in domestic settings (i.e., within the older person's own home or in the home of a caregiver) is often differentiated from elder abuse within institutional settings (i.e., within residential facilities for older persons such as nursing homes) (Brandl and Meuer, 2000; National Center on Elder Abuse, 1996, 2001). Domestic elder abuse has been asserted to be more prevalent than institutional elder abuse (Kosberg and Nahmiash, 1996; Marshall et al., 2000; Moskowitz, 1998b), in part because it has been estimated that 80 percent of the dependent elders in this country are cared for at home (National Center on Elder Abuse, 1996). However, research directly substantiating this assertion is lacking.6 Another dichotomy frequently used distinguishes between elder abuse by individuals who have a special relationship with the elder person (e.g., spouses, children, other relatives, friends, or caregivers providing services within the elder person's home) and individuals with whom such a preexisting special relationship does not exist (Kosberg and Nahmiash, 1996; Marshall et al., 2000; National Center on Elder Abuse, 1996, 2001).7 Within domestic settings, it has been reported that the perpetrators of elder abuse are much more likely to be family members (National Center on Elder Abuse, 1996).