All that glitters: As elder abuse rates soar, some fell for phony jewel scam

Dec. 20--Quick read

* Countywide, crimes against the elderly have increased 38 percent in five years.Violent crimes against the elderly are even more stark: a 67 percent increase between 2011 and 2016.

* Financial crimes are the most common. A dramatic example: the gemstone scam of Fairbanks Ranch's William Phillips and Lisa Sidney.

* The couple have pled guilty to swindling about $2.5 million from elderly victims. The experience, one said, left her "emotionally and financially drained."

Full story

When Marshall Fields first called Judy Cunningham, she rejected his investment proposals and hung up.

But he persisted, phoning the Rancho Santa Fe widow several times a week.

"Pretty soon he was like my best friend," said Cunningham, 73, who eventually paid Fields almost $250,000 for what he presented as valuable gems. "He kept calling and I kept sending money."

At least a dozen seniors fell under the spell of this chatty, charismatic man, who remembered their birthdays and inquired about their grandkids.

"You gained my trust & confidence that I was your very special friend (more than just a client)," Harald Norlien of Black Earth, Wis., wrote to Fields in September.

But "Fields" -- his real name is William Phillips -- had no friends among his clientele. Just victims.

In July, Phillips and his wife, Lisa Sidney, pled guilty to three counts of elder financial abuse and one count of grand theft. Using their shell company, Portfolio Development Inc., they had swindled about $2.5 million from elderly investors. These investors had sunk their retirement savings into piles of glittering, polished -- and virtually worthless -- gems.

While the Fairbanks Ranch couple has made $1.2 million in restitution, his victims remain scarred. Some are destitute. Norslien, for instance, had drained a family trust of $315,000 to buy low-grade gems. His last "investment" with Phillips was $23,000 for two sunstones. An independent expert recently assessed these yellow rocks' value: $50 for the pair.

Now 81, Norslien has to sell firewood to make ends meet.

"The financial impact of his losses from his interaction with Phillips is at the heart of his continued work," his daughter, Kirsten Norslien, wrote the authorities before Phillips and Sidney were sentenced.

"The action of these people is repugnant. Please, make this right."

On Monday, Phillips began his sentence in a local prison. The judge had sentenced him in September to four years in prison and five years and four months on community parole. His lawyer, however, sought a delay in sentencing by arguing that his client -- who will turn 70 next month -- was too sick to be imprisoned and in a earlier hearing, offered X-rays that purport to show fluid in both of Phillips' lungs. "Going to jail is a serious medical risk," he said.

The district attorney's office countered that others in jail have served terms with bouts of pneumonia. The judge agreed and Phillips was led away in handcuffs.

While most felony crime rates are declining in San Diego County, crimes against the elderly are skyrocketing.

"In the last five years, there's been a 38 percent increase in elderly abuse," said Summer Stephan, San Diego County's district attorney.

SANDAG, which tracks violent crimes against seniors, also offers grim statistics: a 67 percent rise in the six years from 2011 through 2016.

While abhorrent, muggings, murders and rapes of older Americans are relatively rare. Of all varieties of elder abuse, financial crimes are by far the most common. In San Diego, Greenwood said, they account for two-thirds of the cases his unit prosecutes.

What's behind this rise? Demographics provide only a partial answer. Since 2012, the county's senior population has risen by 15 percent. But in that same period, the annual caseload of Greenwood's unit jumped 57 percent.

"Elder abuse is going through the roof," he said.

In his 21 years prosecuting elder abuse cases, Greenwood has encountered numerous con artists. Still, he'd never seen anyone like "Marshall Fields."

Without uttering a threat, brandishing a gun, cracking a safe or robbing a bank, William Phillips stole millions. His most powerful weapon? His voice.

"He has this incredible voice," Cunningham said. "All of a sudden you have this confidence in this guy."

Modest penalties

On trial this summer, Phillips was confronted in person and in writing by several victims. Fred and Sheron Harshman, a retired Oregon couple, noted they are now scrimping by on their monthly $1,881 Social Security check. Florida's Carol Janwich, 77, outlined how she had hoped to use her "investments" with "Mr. Fields" to pay for her husband's cancer treatments.

"I had no idea that he was investing my money in costume jewelry and coins at grossly overinflated values," she wrote, "all the while lying to me about their value and my ability to quickly sell my portfolio if I needed to."

While a dozen victims were cited by the prosecution, Cunningham is sure there were more.

"He probably has hundreds of people he's swindled," she said. "I think that he and his wife have money stashed, knowing this day would finally come."

There are still a lot of unknowns in this case, which is true of elder abuse in general. National research into this area "lags as much as two decades behind the fields of child abuse and domestic violence," the National Center on Elder Abuse maintained in a 2016 report.

Solutions have also been in short supply. In October, Stephan convened a meeting of county law enforcement officials and senior-related nonprofits to discuss strategies to combat these crimes. By March, her office plans to outline a coordinated plan of attack.

Advocates argue that this is overdue, that these crimes don't receive enough attention nor these criminals adequate punishment.

Chris Murphy, co-founder of San Diego's Consumer Advocates for RCFE (Residential Care Facilities for the Elderly) Reform, has studied elder abuse in assisted living facilities since 2009. Recently, she noted, California lawmakers increased the penalty for a death suffered in one of these homes from $150 to $15,000.

That's a step in the right direction, Murphy indicated, but a small step.

"Last time I looked," she said, "the civil penalty for poaching an abalone out of season is $60,000."

Even with stricter laws, there's another reason why these cases are so difficult to prosecute: human nature.

Seniors abused by caregivers, for instance, often decline to press charges. A complaint may deprive them of their only outside assistance -- even if that assistance is haphazard or potentially harmful.

Older victims of con artists, too, sometimes shrink from contacting authorities. They're just too embarrassed.

"You feel so stupid," Rancho Santa Fe's Cunningham said.

Phillips finds a calling

For Franz Scheidl, a New Jersey man in the pharmaceutical trade, the deal offered by "Marshall Fields" was too good to keep to himself.

"I went to a few people, friends in my business and told them I'm participating in this and they could, too," said Scheidl.

This was in 1989. Today, the 79-year-old Scheidl's memories of this painful episode are hazy. He recalls "Fields" phoning him, urging him to invest in what were peddled as semi-precious and precious gems.

Scheidl invested $30,000 in the jewels. Or was it $60,000?

Either way, when Scheidl brought the stones to experts in New York City's Diamond District, they were revealed as penny ante rocks.

Scheidl sued in federal court. In July 1991, "Fields" settled the case, agreeing to reimburse his victims. They recouped most -- but not all -- of their losses.

For years, Scheidl worked to make up the difference to his snookered friends.

"I paid them all back," he said. "It was a very tough time for me."

Phillips and his lawyer, Baker, declined requests for interviews. Court records in New Jersey and San Diego paint a partial portrait of this con artist. Born in Rhode Island on Jan. 9, 1948, Phillips was raised in a poor family. After high school, the 17-year-old joined the National Guard.

In 1968, his unit was sent to Long Binh, a base east of Saigon. Later, Phillips would claim that frequent mortar attacks during his year in Vietnam damaged his hearing and led to an enduring case of Post-Traumatic Stress Disorder.

In 1969, Corporal Phillips was honorably discharged. In court papers, his lawyer noted that the veteran drifted for nearly two decades. He married, divorced, dabbled in drugs, vagabonded across India, returned to the States for his second marriage and a job cleaning chimneys.

Then he found his calling.

"William started in his gem business with good intentions," Baker wrote. "However, with limited training and a passion for talking to people, William saw tremendous success for the first time in his life."

Success, built on a simple larcenous formula.

'He never shuts up'

Fraudsters often follow a playbook, prosecutors say, returning again and again to the same methods.

There's the "grandmother scam."

"That's a big one," Stephan said.

This involves con artists calling an elderly person, insisting "bail money" is needed to secure a grandchild's release from a foreign jail. The criminals actually have no contact with the grandchild, and hope the panicked elder will send cash before discovering this.

There's the lottery scam.

In 2014, an 85-year-old retired priest was informed he'd won $1.6 million in the Publishers Clearing House sweepstakes. Before collecting, though, Father Michael Ortiz was informed he had to pay taxes of $40,000.

He sent a check to someone claiming to be an IRS agent. In fact, Earl D. Roberts was a con man whose fraud netted him a year in jail and five years' probation.

"There are people out there after your money," Ortiz told the Union-Tribune after Roberts' sentencing, "especially if you're elderly like me."

And then was the "Marshall Fields" scam.

Like the others, this one followed a time-tested formula. In 1986, William Phillips and Lisa Sidney created a California corporation, Portfolio Development Inc. They opened an "office" -- a post office box in upscale Marina Del Rey -- and printed slick brochures touting gemstones as a superior investment to stocks, bonds and precious metals.

Sidney was the company's president, Phillips its voice as "Marshall Fields." Claiming to be the best of Portfolio's army of 50 brokers, "Fields" called the brochure's recipients over and over, wearing down his targets' resistance.

That's how the couple ensnared Scheidl in 1989. And they used the same tactics for the next 28 years.

"He's a smooth talker," said Phillip Buckley, a North County real estate salesman who called Phillips on behalf of Cunningham, a family friend. "He never shuts up and you'll be on the phone for hours."

Some victims came to welcome these long, entertaining conversations. "Fields" would brag about his celebrity clients. He'd spin yarns about his worldwide travels, about the international wheeling and dealing that unearthed these rare gems, which were sure to gain at least 15 percent in value, year after year.

The stones were shipped in beautiful presentation boxes, accompanied by letters of authenticity from "authorities." "Fields" assured clients he'd gladly buy back any of the stones, at a price reflecting the inevitable profits.

That promise, the letters of authenticity, the stones -- all were bogus.

"There were several requests for liquidation," Kirsten Norslein wrote on behalf of her father, Harald Norslein. "Always to be denied for one reason or another..."

In fact, the stones were "rare" only in the sense that they were uncommon. Instead of diamonds, emeralds or rubies, Phillips dealt in gems like the blue-green paraiba apatite, and spinel, a rock that gleams with arresting purple-red hues.

Phillips also sold gold coins, and that was his initial dealing with Rancho Santa Fe's Cunningham. But even after she had paid Phillips $30,000 for coins, he kept calling.

"Judy," he said, "believe me, these stones are going to go up much more than those coins will ever go up."

She sold the coins back to Phillips and started acquiring his gems, a buying spree that continued until Phillips overplayed his hand. Although they had never met, conducting all their business over the phone, Phillips said Portfolio allowed him to offer one client a year a special deal -- she could buy premium gems with Phillips, sharing the cost 50-50.

"Well, that's stupid," Cunningham told herself. "He doesn't even know me."

Her suspicions raised, Cunningham contacted Buckley. He took several of her "precious" gems to experts in Los Angeles. The verdict: she had been defrauded.

When Phillips refused to buy back the stones, she cut off all contact with the man and wrote off the loss.

"It was an expensive lesson to learn," she said.

Then she read a 2016 Union-Tribune article about Greenwood's elder abuse unit. Buckley called the D.A.'s office.

"They came out to my house," she said, "and picked up all the gem stones I had."

Romance gone awry

In August 2016, investigators armed with a search warrant descended on the Fairbanks Ranch home of Phillips and Sidney.

"We took out 18 boxes of evidence," Greenwood said. "One of the good things for us, the husband kept meticulous notes of everything and everybody."

Phillips' jottings led other victims, including Rita Brehm, a former journalist living in Billings, Mont.

"I've always heard the term 'cold-blooded killer,' and in the view from my faith-based, Catholic Midwestern upbringing, I don't think I fully realized what that meant," she wrote. "In this case, I'm starting to discover that unfortunately I ran across a 'cold-blooded liar and thief.'"

There was also Mary McBroom, who loaned $100,000 to "Fields" as a loving gesture.

"She was under the impression that he was single and that they had a connection," Greenwood said. "Mary even flew out to L.A. in the hopes of meeting Phillips."

Those romantic hopes were not realized, just as her financial losses were not fully recovered. In the agreement negotiated by the D.A.'s office and the lawyers representing Phillips and Sidney, the couple agreed to pay back 75 percent of the $2,466,486, or about $1.8 million.

To date, Baker said, Phillips and Sidney have forfeited close to $1.2 million.

For some victims, the damage had been done. Before the settlement was reached, Carol Janwich's husband died of cancer. Carole Boshell, a retiree in Arizona whose late mother lost her retirement savings to Phillips, pronounced herself "emotionally and financially drained."

"This is devastating," Boshell wrote, "to know these gems are worthless."

Detrimental to his health

Frauds like this one cost older Americans an estimated $36.5 billion a year, the National Council on Aging reports.

Large as that figure is, the council termed it "likely underreported." Another source, the National Adult Protective Services Association, calculates that only one in every 44 cases of elder financial abuse is reported.

These cases are under-reported, Greenwood said, and under-investigated. Often, the prosecutor maintained, authorities drop these investigations on the belief that frail and forgetful witnesses will botch their testimony.

In Greenwood's experience, though, older crime victims are winning witnesses.

"Most of the time these victims have such jury appeal," he said. "I have tried to show other prosecutors that these cases are worth trying and are provable."

Before his sentencing, Phillips marshalled a written testimonial from his psychiatrist at the Veterans Affairs hospital in La Jolla. Dr. Jorge Porras noted he knew Phillips as patient -- coping with PTSD, bipolar disorder, attention deficit disorder and sleep apnea -- and as a man. Phillips and Sidney are caring for Sidney's 99-year-old mother.

"He and his wife were both hard-working and committed people that were challenged by the legal problems that they faced," Porras wrote. "Throughout that period, Mr. Phillips became depressed, and because stress triggers worsening of Post-Traumatic Stress Disorder and causes worsening of cognitive deficits. Mr. Phillips did suffer more as a result.

"Furthermore, I believe that incarceration for long periods of time will be detrimental to his mental health."

On Monday, Phillips began his sentence that was handed down in September. When he completes his time, his wife Sidney will begin her four-month jail term followed by five years probation.

The court agreed to let Phillips serve his sentence first, with Sidney going to jail only after her husband's liberation. That way, someone can always be with Sidney's mother.

'Like many of the couple's victims, she's elderly and needs help.

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