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Veterans’ Benefits Scams and Insurance Fraud

On August 29, 2012, California legislation enacted a bill that would help protect senior veterans from insurance fraud and scams related to veterans benefits programs. Senate Bill No. 1184 adds a section to the Insurance Code that reads:

“An insurance broker or agent shall not participate in, be associated with, or employ any party that participates in, or is associated with, obtaining veterans benefits for a senior, unless the insurance agent or broker maintains procedural safeguards designed to ensure that the agent or broker transacting insurance has no direct financial incentive to refer the policyholder, or prospective policyholder, to any veterans benefits program offered through the government.”

This means that someone selling insurance to seniors may not obtain or suggest a policy including veteran benefits to a senior unless they adhere to extremely strict standards and safeguards that show they have no direct or personal financial incentive for obtaining those veterans’ benefits. Financial incentive would include standing to gain commissions, bonuses, or other monetary gain by virtue of the senior’s enrollment in a veterans’ benefits policy.

This addition to the legislation comes after decades of elder financial abuse surrounding veterans benefits and senior insurance fraud. While the approved bill marks a significant step in the right direction towards protecting seniors against insurance fraud, it is important to stay aware of the scams and fraud that continue to plague our society. As our veteran population ages, it is particularly important that we work to prevent scams targeted at elder veterans.

Veterans’ Associations and organizations in Sacramento, San Mateo, San Rafael, Martinez, and across Northern California provide aid, benefits, and support to aging veterans. Yet, elder veterans at these locations are often unfortunately and unfairly targeted by scammers and salespeople who seek to defraud the elder veterans while pretending to act in their best interest.

What Are Examples of Veterans’ Benefits Scams?

Veterans’ Benefits include various pension-based and other financial programs that are geared towards helping veterans and their caregivers cover costs like medical care or long-term care. Unfortunately, these benefits programs also attract unscrupulous insurance agents or brokers who fraudulently convince seniors to purchase these or similar programs, while profiting at the expense of the senior.

Aids and Attendance Scam

The Department of Veterans Affairs offers a needs-based “Aid and Attendance” benefit to help low-income uninsured veterans and their spouses pay for in-home or assisted living care. Because this benefit applies specifically to veterans with little or no savings and without insurance policies, it is only available to a specifically limited portion of the elderly veteran population. Yet, in recent months, California and other states have seen the rise of “Aid and Attendance” scams.

In these scams, insurance agents wrongfully tell veterans that they are eligible for this benefit; illegally “rearrange” the veteran’s finances to approximate eligibility; then reap the benefits in the form of lucrative commissions or even by pocketing a large portion of the monetary aid. This illegal activity not only harms the elder veteran by depleting their finances and preventing them from receiving adequate care, but also makes the elder veteran complicit in the fraud, which can create trouble if the elder later tries to apply for Medicaid benefits.

The official cut-off for eligibility for the Aid and Attendance benefit is financial worth of $80,000. If your finances and assets exceed $80,000 and an insurance broker tries to convince you to sign up for that benefit, he or she may be committing financial elder abuse or insurance fraud.

The Evans Law Firm litigates on behalf of victims of elder abuse in California; if you believe you or a loved one has been the victim of veterans’ benefits scams or insurance fraud, contact The Evans Law Firm for a free and confidential consultation at 415-441-8669 or email

Veterans “Investment Seminars”

Similar to the Aids and Attendance Scam, perpetrators of “investment seminar” insurance fraud pose as qualified investors who specialize in Veterans’ Benefits and affairs. In truth, these investors seek to scam veterans out of their pensions and savings by convincing them to commit illegal acts in order to qualify for various veterans’ and disability benefits.

One common fraudulent investment seminar scheme is the suggestion that veterans transfer their funds into irrevocable trusts so that it looks like the veteran has less money than they do and can qualify for low-income benefits. The investor will assure the veterans that acting in this way is in accordance with the law, when in fact the investor is encouraging illegal behavior that can have detrimental future consequences, including making the veteran ineligible for Medicaid. Furthermore, these seminar investors will often ask the veterans to sign policies and contracts that give the investor or insurance agent a significant commission of the benefit, leaving the veteran with a paltry amount to actually cover the required health or long-term care.

In addition, hosts of “investment seminars” for seniors and elderly veterans may also try to push for the purchase of annuities that are inappropriate for seniors.

Veterans Charity Fraud

In August 2012, the “Help Hospitalized Veterans” charity in California was sued by the state’s attorney general under claims that the charity illegally diverted $4.3 million and violated various other state codes. Not only are the allegations in this case egregious because they claim that the charity diverted money donated from American taxpayers to injured and disabled veterans, but the potential victims of this fraud would include seniors and elder veterans who needed and were not afforded the donated funds.

What Resources Are Available for Victims of Veterans’ Benefits Scams and Insurance Fraud?

The Department of Veterans’ Affairs is the official authority on all the details, rules, and eligibility for veterans’ benefits and insurance policies. The Veterans Affairs Office of Inspector General (VAOIG) has a hotline for reporting cases of benefits fraud at (800) 488-8244.

The Evans Law Firm litigates on behalf of victims of elder abuse in California; if you believe you or a loved one has been the victim of veterans’ benefits scams or insurance fraud, contact The Evans Law Firm for a free and confidential consultation at 415-441-8669 or email (seminars)

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