While the insurance agent was helping senior citizens with their retirement funds, prosecutors say, he allegedly pocketed more than $80,000 of their investment money.

But Scott Michael Powell, 49, of Palmyra, Lebanon County, picked the wrong senior citizen when he allegedly defrauded a 97-year-old Lancaster County woman last spring, officials said.

The woman's son, it turns out, is a private detective and a retired deputy inspector general — the state agency that investigates fraud, waste and abuse of taxpayers' money.

When Jeff Fry looked into his mother's $24,000 "investment" last May, according to court documents, he immediately became suspicious and called Lancaster County detectives.

Detectives searched Powell's home and business computer records, discovering a total of 11 people who had trusted Powell to invest their retirement money in phony certificates of deposit and mutual funds.

The case was turned over to the state Attorney General's Office because the victims, almost all of whom were senior citizens, were from several counties — four from Lancaster County, five from Dauphin County, and one victim each from Philadelphia, Lebanon and Cumberland counties.

This morning, Powell was charged by the state Attorney General's Elder Abuse Unit with participating in a corrupt organization, plus 11 counts each of theft by deception, insurance fraud, forgery and theft, all of which are felony offenses.

"This scheme targeted seniors across central Pennsylvania, selling thousands of dollars worth of fictitious investments to a list of unsuspecting victims in their 70s, 80s and 90s," state Attorney General Tom Corbett said in a prepared statement, announcing the arrest.

"These victims trusted Mr. Powell with their money and their financial futures, only to learn that these 'investments' were allegedly part of an elaborate plot to steal clients' money for personal use."

According to court documents, Powell was a licensed insurance agent in Pennsylvania, doing business as SMP Financial Services of Palmyra, up until April 2008, but he was never registered or licensed to sell securities or other investment products.

While selling legitimate insurance policies to some consumers, Corbett said Powell was also marketing his non-existent CDs and mutual funds.

Powell tried to conceal the fraudulent nature of the investments by providing victims with fabricated statements that showed they were earning interest and dividends on the accounts, according to the criminal complaint.

Rather than invest consumers' money, prosecutors said, Powell allegedly diverted at least $83,000 for his own personal use.

Some of the alleged victims he knew through his work at a bank or by handling their insurance, according to court documents.

Others he met by presenting insurance and investment programs, including at a senior center and a retirement community, where he sold the bogus certificates of deposit and non-existent mutual funds.

According to documents, when Powell was confronted by investigators, he admitted "he got in financial trouble in 2006 trying to support two families."

The money, investigators noted, went to making domestic relations payments and starting another business.

Fry, whose mother lives in a Manheim Township retirement community, once served as director of the Lancaster Crime Commission and now also educates business groups on how to prevent identity theft.

The other Lancaster County victims, prosecutors said, included an 86-year-old Gap man, who gave Powell a check for $9,960, and a Mount Joy couple, ages 84 and 82, who gave him $6,164. Prosecutors said they met Powell through friends.

"With one of the largest senior populations in the country, financial abuse is a serious threat to older Pennsylvanians," Corbett said.

"The Attorney General's Elder Abuse Unit is dedicated to investigating and prosecuting criminals who exploit our seniors for their own personal gain."

Powell was arraigned before District Judge David Miller this morning and released on $25,000 unsecured bail. A preliminary hearing has been scheduled for next month.

Corbett thanked the Lancaster County District Attorney's Office and Pennsylvania Insurance Department for assisting with the investigation.

Concerns about elder financial abuse, and of other forms of fraud targeted at senior citizens, can be reported by calling the Attorney General's toll-free Elder Abuse Hotline at 1-866-623-2137.


Staff writer Janet Kelley can be reached at jkelley@LNPnews.com or 481-6026. blog comments powered by Disqus