HCSO Busts Stockbroker in Massive SCC Scam

By Mitch Traphagen  (mitch@observernews.net)

SUN CITY CENTER - The Hillsborough County Sheriff’s Office, in conjunction with the Pinellas County Sheriff’s Office, has arrested Joe E. Herndon, 51, of St. Petersburg for grand theft, organized scheme to defraud and exploitation of the elderly.

The victim was reportedly an 81-year-old resident of Sun City Center.

The HCSO is charging that Herndon, acting as a stockbroker, stole more than $800,000 from the victim between 1997 and 2003.

The HCSO investigation alleges that the suspect purchased a $130,000 airplane, $21,000 in jewelry and purchased two diesel engines for his 31’ boat for more than $32,000 all using funds from the victim.

The HCSO also alleges that Herndon received checks from the victim totaling $476,800.

According to the investigation, that money was obtained as a ruse where the victim was issued limited shares of various corporations to convince him to continue paying for items purchased by Herndon.

Additionally, the HCSO investigation stated that the suspect obtained a $120,000 equity loan on the victim’s home.

Herndon was arrested on June 13 by the St. Petersburg Beach Police Department and Hillsborough County Sheriff’s deputies on HCSO warrants.

HCSO detectives were notified by the victim’s attorney that his client may be the victim of a crime on the part of Herndon.

For Sergeant Ira Arman of the HCSO District IV office in Ruskin, the crime is too close to home.

"This is big," said Arman. Something this big usually happens to multitudes of persons - it’s rare having only one victim."

Arman is greatly concerned that other south county residents may unknowingly be the victims of similar crimes.

Sgt. Arman supervises a group of detectives at the District IV office including a white collar crime unit. Although the most common such crimes include identity theft and telemarketing scams, the unit’s detectives have experienced and resolved a broad spectrum of criminal activity.

South county is often seen as quiet, even pastoral, but Arman’s detectives are able to tell a different story.

"We made an arrest," said Arman. "But people have to be vigilant."

Arman strongly encourages any south county resident to contact the Ruskin HCSO office if they suspect that they, or someone they know, is the victim of such a crime. In addition to the District IV headquarters, the various community resource deputies are also available and ready to provide assistance.

Exploitation of the Elderly

The first two charges, grand theft and organized scheme to defraud, are self-explanatory. The third charge, exploitation of the elderly, however, is somewhat less common.

According to a report by the Orange County Commission on Aging, exploitation is commonly defined as, "A person who is in a position of trust and confidence, such as a caregiver, with a vulnerable adult who knowingly, by deception or manipulation, obtains or uses a vulnerable adult’s assets, funds, or property for the benefit of another."

While the charge is more frequently applied to nursing home staff and other caregivers who commit crimes against seniors, a stockbroker, someone who operates as a trusted financial advisor, also may easily fit that description.

As the nation’s senior population grows, exploitation of the elderly and other fraud crimes are also growing at an alarming rate.

According to the National Center for Victims of Crime, 60 percent of financial exploitation crimes were committed by the offspring or close relatives of the victim. That leaves 40 percent who were victimized by non-relatives.

As Sgt. Arman said, "Be vigilant." Particularly if someone else is managing your affairs.

While such crimes appear to be rampant, many seniors are hesitant to seek help because they fear they will lose control at the hands of well meaning adult children.

For that point it is important to note that fraud crimes occur in virtually every age group but seniors are specifically targeted for a number of reasons.

Not only are seniors often financially independent but, as the Orange County report points out, they come from an era where a man’s word was his bond.   Seniors may tend to be trusting of the friendly voice on the phone or the motivated stockbroker often feeling that the person could just as easily be their grandchild just trying to make a living.

As such, the report refutes the notion, the one often taken by the previously mentioned well-meaning children, that seniors are frequently victims due to frailty, incompetence or social isolation.

Seniors are frequently victims simply because they offer a clear target due to their circumstances.

The topic was recently the subject of a monthly Hillsborough County Sheriff’s Office seminar at Kings Point in Sun City Center and

was summarized by John Bowker in the July edition of the News of Sun City Center.

No Happy Ending

The HCSO made an arrest and their suspect, Joe E. Herndon is, as of press time, at the Orient Road Jail in Tampa with a $100,000 cash bond required for his release before trial.

While a quick arrest is good news, there is little else to cheer about. An 81-year-old man is still out $800,000 of hard earned savings, but that is just the tangible damage.

The amount, of course, is relative. For some losing $10,000 or even $1,000 is devastating, possibly life-altering. The victim pays not only in monetary terms but also in quality of life terms. A trust is violated and even a quick arrest will do little to repair that damage. Also, the victims, having spent decades successfully managing their lives and affairs begin to second guess themselves.

If someone is managing your financial affairs, even if that person is a child or a friend of many years, keep an eye on your accounts, always know where your assets are.

"I have no one else," said the victim of this crime. He was referring to the fact that he had no close family members. But that also pointed out that if the crime hadn’t come to light, it may never have been discovered.

That is often the morbid reality of crimes against the elderly. "[The perpetrators] of these crimes are waiting for people to die," said Sgt. Arman.

Additional Information:

The Orange County Commission on Aging offered the following tips to determine if someone is a crook:

  • May use high-pressure sales tactics or offers that are only good today.

  • Wants you to make an immediate decision.

  • Offers a free prize and then wants money for taxes, service charges, etc.

  • Offers investments with high returns and with little or no risk.

  • Makes excuses for not sending you information.

  • Will not provide local references that you can check.

  • Offers to send someone to pick up your money or wants you to send the money by overnight delivery.

  • Suggests that you should make a decision based on trust.

  • Makes an offer that sounds too good to be true.

South County Law Enforcement Numbers:

HCSO District Four headquarters: 247-0455

Community Stations:

Sun City Center (Dep. Rob Thornton): 672-7817

Ruskin (Dep. Jeff Service): 672-7426

Apollo Beach Community Station (Dep. Janet Vicks): 671-7785

Riverview (Dep. Susan Shute): 672-7822

Wimauma (Dep. Jesse Villareal and Dep. Robert Woods): 672-7439

Gibsonton (Dep. Tom Larson and Joe Venero): 671-7716

Community Resource Deputies for other areas including Bloomingdale, Summerfield and Boyette Springs are available by calling the HCSO District Four headquarters.

Links for information associated with this story:

Hillsborough County Sheriff's Office

Orange County Commission on Aging Fraud Prevention Guide (Requires Adobe Acrobat Reader)

Senior Sleuths of Florida


Observer News Front Page