lives of senior citizens. I am pleased to provide you with the following information relative to the activities of the Postal Inspection Service during fiscal year 1976. Although the Inspection Service does not maintain age group statistics concerning the number of individuals who have fallen victim to the various types of postal crime, experience has shown that the elderly are particularly susceptible to certain fraud schemes.

MAIL FRAUD

Through the years, swindlers and con artists have continued to devise new schemes, or put new gloss on old ones, seeking the imagined anonymity of the mails to perpetrate their frauds. However, in the more than 100 years since its passage, the Mail Fraud Statute, title 18, U.S. Code, section 1341, has proven a most effective and flexible weapon against fraud and deceit. Under the authority of this statute, the Inspection Service completed 5,793 fraud investigations during fiscal year 1976, resulting in 1,674 arrests, 1,458 convictions, and the discontinuance of 2,786 dubious promotions. The arrest and conviction totals are both in excess of the figures for the preceding year. The number of postal customer complaints alleging mail fraud which were received by the Inspection Service during fiscal year 1976 rose to 135,717. Court-ordered and voluntary restitution to victims of postal fraud amounted to $6,103,211.

Ancillary to this criminal investigation activity, the Inspection Service consumer protection program, to which I referred in my previous report, accounted for the satisfactory resolution of approximately 32,845 (90 percent) of 36,315 customer inquiries. As you may remember, this program involves direct contact by the Inspection Service with mail-order firms involved in unsatisfactory transactions. Oftentimes, such transactions are the result of inadequate business practices or simple lack of communication between consumers and businessmen.

Still another effective means to protect postal customers from fraud by mail is provided by the False Representation Statute, title 39, U.S. Code, section 3005. When an investigation discloses evidence that mailed advertisements seeking remittances contain misrepresentations, the case may be referred to the Postal Service's Law Department for proceedings before an Administrative Law Judge. Should the alleged misrepresentations be substantiated, a false representation order may be issued, directing post-masters to return to the senders all mail addressed to the questionable promotion and to refuse to honor postal money orders payable to the firm. During fiscal year 1976, the Inspection Service requested administrative action in 260 cases.

Although the several types of fraudulent promotions which can have a decided impact upon the quality of life of our senior citizens have been described a number of times in the past, I believe that summaries of certain of the more prevelent schemes bear repetition in an effort to achieve increased public

awareness.

Medical frauds.—Spurious medical promotions probably affect senior citizens more than any other age group. Through cleverly conceived advertising, promoters tout all manner of miracle cures for a long list of geriatric disorders. Due to the rising costs of medical attention and, perhaps, previous unsuccessful attempts to alleviate their suffering, the elderly are often tempted to try these purported cure-alls. In some instances, the products advertised have no effect whatsoever on the symptoms complained of. However, in other cases, products have actually proven hazardous to an individual's health. During fiscal year 1976, the Inspection Service, in cooperation with the Postal Service's Law Department, secured the discontinuance of 121 of these bogus medical promotions. The worthless nature of the products under scrutiny was often established through expert testimony furnished by personnel of the Food and Drug Administration.

Work-at-home schemes.-Retired persons or invalids are naturally attracted to promotions which offer the opportunity to supplement their limited incomes by working at home. The most common such scheme is that which advertises the possibility of earning a substantial income by stuffing and addressing envelopes. In reality, such an operation is a pyramid scheme, with income claims well out of proportion to what will actually be realized; in some instances the income estimates are totally outlandish. In many cases, supposedly free materials are not free, receipt, being contingent upon the payment of certain fees. The Inspection Service conducted 317 investigations which concerned work-at-home schemes, resulting in the discontinuance of 211 fraudulent operations.

Distributorships and franchises.-Regaled with promises of high profits and guarantees of success, senior citizens are frequently induced to invest significant sums of money in worthless distributorships, franchises, vending machine operations, or similar job opportunity ventures in the hope of expanding upon their fixed incomes. Quite often, the promoters fail to fulfill their contractual obligations to the franchise holders. Exclusive territories assigned to the victims are rarely exclusive buy back guarantees are not honored, and the product to be distributed is seldom as attractive or efficacious as was represented. In some instances, after the receipt of the victims' money, no efforts are undertaken by the promoters to satisfy their obligations. The Inspection Service was instrumental in halting 19 job opportunity frauds during fiscal year 1976. A total of 145 cases remain under investigation.

Home improvement/land frauds.-Senior citizens desirous or purchasing a retirement homesite can be victimized by unscrupulous land promoters. The quality of the land itself, or the amenities which are to accompany its purchase, can be misrepresented, or the land could be nonexistent. Instead of a desirable retirement home, victims are left with swamp land, barren desert plots, previously encumbered real estate, or low quality structures. They may find that the property is served by inadequate roads, sewerage, or utilities; or they may find no property

at all.

Since older people are often unable to accomplish home improvements for themselves, they may be susceptible to shady contractors' blandishments concerning extensive home repairs or additions to the existing structures. Frequently, the quality of the work done is substandard and the price inflated.

Such frauds were the subjects of 63 investigations concluded during fiscal year 1976. Fifteen questionable promotions were terminated.

Merchandise frauds.-The Inspection Service conducted over 1,000 criminal investigations in which specific intent to defraud was suspected when a particular mail-order firm failed to furnish ordered merchandise or make refunds. A total of 420 fraudulent or suspect promotions were discontinued. The goal of this criminal investigation effort coincides with that of the consumer protection program mentioned earlier, to maintain the integrity of the postal system as an avenue for the conduct of business, to the mutual advantage of buyer and seller. In conclusion, I would like to urge any senior citizens who feel that they have fallen victim to a fraudulent scheme to make their complaint known to a responsible employee at a postal installation near them. I can assure you that their inquiries will receive both prompt and conscientious attention. Sincerely,

BENJAMIN F. BAILAR.

ITEM 24. RAILROAD RETIREMENT BOARD

DECEMBER 16, 1976.

DEAR MR. CHAIRMAN: With reference to your letter of November 10, 1976, I am pleased to enclose a statement summarizing major activities of the U.S. Railroad Retirement Board on aging during 1976. It is anticipated that payments under the Railroad Retirement and Railroad Unemployment Insurance Acts will be somewhat higher during 1977 than in 1976.

We look forward to your committee's 1976 report on developments in aging. Sincerely yours,

[Enclosure.]

R. F. BUTLER, Secretary.

The U.S. Railroad Retirement Board is the Federal agency that administers a comprehensive social insurance and staff retirement system for railroad workers and their families, separate from but coordinated in several ways with social security. Programs of the system include the following: (1) Old-age, survivor and disability benefits under the Railroad Retirement Act; and (2) unemployment and sickness insurance benefits under the Railroad Unemployment Insurance Act. In addition, certain administrative services under the Federal health insurance (medicare) program are performed with respect to aged and disabled railroad workers and eligible members of their families.

BENEFITS AND BENEFICIARIES

During fiscal year 1976, benefit payments under the railroad retirement and railroad unemployment insurance programs totaled over $3,687 million, an in

crease of $560 million from fiscal year 1975. Retirement and survivor benefit payments amounted to $3,470 million, an increase of $409 million over the preceding fiscal year. Unemployment and sickness benefit payments during fiscal year 1976 totaled $218 million, which was $151 million more than in the preceding fiscal year.

The number of beneficiaries on the retirement-survivor rolls on June 30, 1976, totaled 1,021,000. The vast majority (over 81 percent) were aged 65 and older. At the end of the fiscal year, over 464,000 retired employees were being paid a regular annuity averaging $351, about $27 higher than a year earlier. In addition, 157,000 of these employees were being paid supplemental annuities averaging over $59.

Almost 224,000 wives of retired employees were receiving an average annuity of $165. Of the 338,000 survivors on the rolls as of June 30, 1976, 291,000 were aged widows receiving an average annuity of $250. Some 871,000 individuals who were receiving or were eligible to receive monthly benefits under the Railroad Retirement Act were covered by hospital insurance under the medicare program at the end of fiscal year 1976. Of these, 846,000 (97 percent) were also enrolled for supplemental medical insurance.

Unemployment and sickness benefits under the Railroad Unemployment Insurance Act were paid to almost 170,000 railroad employees during fiscal year 1976. However, only about $970,000 (less than 1 percent) of the benefits went to individuals aged 65 and older.

DEVELOPMENT IN 1976

LEGISLATION

On October 18, 1976, technical amendments to the Railroad Retirement Act of 1974 were enacted. The amendments (Public Law 94-547) were mainly for the purpose of correcting certain defects in the law which were not apparent upon enactment of the Railroad Retirement Act of 1974; of providing borrowing authority for the Railroad Retirement Supplemental Account; and of excluding certain payments from railroad retirement taxes.

These amendments now insure that a widow's annuity under the 1974 act will not be less than the annuity she received as a spouse before her husband's death. A previous guaranty provided by the 1974 act was not fully effective under certain conditions.

Also, certain modifications were made in the way survivor benefits are calculated, mainly with respect to widows entitled to either their own railroad retirement employee annuities or social security benefits in order to more fully carry out the intent of the joint labor-management committee that recommended the 1974 legislation to Congress. In addition, there is a provision to retain existing rates of employee or spouse annuities being paid at the end of 1974 in cases where the annuity otherwise would have increased unintentionally because of a transition recalculation required under the 1974 act.

To conform with existing practices, the amendments also provide that supplemental sickness benefits, payable under nongovernmental plans, and certain travel and meal allowances will not be taxable or creditable for railroad retirement purposes.

Authority was given to the board to borrow funds from the regular Railroad Retirement account during any period in which the Railroad Retirement supplemental account is temporarily insufficient for benefit payments. These funds are to be fully repaid with appropriate interest.

ITEM 25. VETERANS ADMINISTRATION

DECEMBER 15, 1976.

DEAR MR. CHAIRMAN: In response to your request of November 9, 1976, I am pleased to forward the enclosed report on the Veterans Administration activities relating to developments in care of the elderly for the year 1976.

The VA has a significant interest in our aging population because two-thirds of the 29.6 million veterans in this country have passed their 40th birthday, and more than 4 million are 60 years of age or older. In order to meet the above expanding veteran population needs we have devised a comprehensive integrated approach to provide health care to the aging veteran.

The Veterans' Administration's integrated program for the aging veteran constitutes a major contribution of the agency to the national effort to meet the growing needs of the increasing number of older Americans.

I hope the enclosed information will be helpful to the committee. Please let us know if we can provide any further assistance.

Sincerely,

RICHARD L. ROUDEBUSH, Administrator.

[Enclosure. ]

VA ACTIVITIES AFFECTING OLDER VETERANS IN 1976

DEPARTMENT OF MEDICINE AND SURGERY

1. INTRODUCTION

A major thust within the Veterans' Administration is toward comprehensive planning and coordination of health care resources for the elderly. The needs of present veteran elderly and the needs of an exponentially growing future older veteran population can not be met adequately by simple expansion of existing VA programs. The Department of Medicine and Surgery has begun, therefore, a longrange program to insure comprehensive geriatric care through the fostering and utilization of geriatric innovation and research and through the efficient coordination of resources.

Basic to this goal was the formation in September 1975, of the medical service, headed by the Assistant Chief Medical Director for extended care, which brought together under one organizational roof all those long-term care facilities within the VA which served primarily older veterans. A major outcome expected from this reorganization was cooperative planning among the diverse extended care programs in order to achieve a more total approach to geriatric care.

To aid in this cooperative plan the Geriatric Research, Education and Clinical Centers (GRECC's) were mandated to develop and demonstrate models for innovative geriatric care, to further significant research in all areas of aging, and to provide educational enhancement for staff associated with extended care programs. In essence, the GRECC's were designated specifically to develop the areas of expertise necessary for the redesign and execution of a comprehensive geriatric health program.

During 1976, both the extended care service and the Geriatric Research, Education and Clinical Centers have made some major strides toward improved geriatric care for veterans. Two new VA nursing home care units were opened during this year. These nursing home units and those additional units planned for the immediate future reflect the most recent environmental and design concepts developed for nursing homes. Recognizing the psychosocial impact of living environments, the staff of the extended care service have worked to firmly establish the integrity of nursing home care units as unique, freestanding facilities and not just redesignated hospital wards. Consistent with this perceived need for more widespread education about the impact of nursing homes upon elderly residents, a continuing education conference on this subject was held this year at the Bay Pines, Fla. GRECC. The conference was geared toward administrators, architects, and construction engineers most directly responsible for the design and management of nursing home facilities.

During the past year, the extended care service has evolved a forward-looking, far-reaching plan for the revitalization of the VA domiciliary program. New standards for modern domiciliary living are being set which call for smaller, 200-bed facilities, increased privacy for residents, and a more homelike, less institutional atmosphere. Changes in these environmental factors within domiciliaries have been shown to result in significant improvements in the living, dining, and recreational behaviors of resident veterans.

Construction and design for new domiciliary buildings is allowing also for possible conversion to nursing home units when the need is present. Considering that the average age of current domiciliary members is 60 years, this kind of anticipatory planning seems most advantageous. Construction of the first new 200-bed domiciliary is scheduled to being in fiscal year 1977 at Wood, Wis. Longrange plans envision one such model domiciliary in each of the VA medical districts for comprehensive coverage of older veterans' needs across the country.

In 1976, an additional geriatric center was initiated at the VA hospital, St. Louis, Mo.; therefore, the current Geriatric Research, Education, and Clinical Centers in existance total eight. The new St. Louis GRECC will have a particular emphasis upon preventive medicine and restoration programs for the elderly.

Most of the GRECC's have been actively engaged in geriatric research, educational conferences and professional training, and clinical demonstration work in geriatrics during 1976. A total of 25 basic research projects have been funded among four of the eight established GRECC's. The topics for this research include such areas as amino-acid metabolism and aging, connective tissue research, the neurobiology of aging, cardiological research, and attitudes of professionals toward the elderly. One GRECC has been particularly strong in its initiation of demonstration projects. One of the four demonstration projects conducted in 1976 was a successful remotivation program, integrating elderly veterans with young people. The two remaining GRECC's have just recently completed the full-time appointment of two nationally known individuals as their respective geriatric center directors.

Two of the GRECC's have opened their planned 10-bed geriatric units which are intended for intensive clinical study of disease processes associated with older patients. The remaining six centers are at various stages in the development of their geriatric units; however, most units should begin operation during fiscal year 1977.

All of the extended care components have been involved in various educational efforts during the past year. Six of the GRECC's have worked actively with local medical school representatives to strengthen their ties and to encourage and foster medical school commitments to the area of geriatrics. Two of these GRECC's have now succeeded in establishing medical residency positions in geriatrics at their respective hospitals. This is a precedent-setting move toward more specialized training for medical students and physicians in the care of geriatric patients.

There has been a concentration on local conferences and workshops over the past year aimed at enhancing VA and community staff understanding of geriatric issues and care. Three GRECC's have been directly involved in the continuing education conferences organized by the extended care service during 1976. A total of six continuing education conferences were held by extended care involving approximately 280 VA and approximately 300 non-VA participants from across the country. The conferences consisted primarily of intensive workshops and symposia dealing with such topics as cardiopathy of the aging, the aging brain and senile dementia, and training of VA nursing home care personnel. The Veterans' Administration has also been involved in many interagency coordinative efforts in its attempt to insure comprehensive geriatric care. The growing numbers of older veterans requiring health care, specialized extended care services, supportive living environments, and nutritional supplements are indicative, of course, of similar demands being made by a growing elderly population in general. Agencies at the Federal, State, and local levels and within the private sector are working to develop comparable geriatric care programs. To minimize duplication of efforts and promote efficient use of resources, the VA has been actively participating in coordinative efforts on behalf of the elderly citizen.

The extended care service has supported policy decisions which allow for improved utilizing of community nursing homes, and State hospitals, domiciliaries, and nursing homes by older veterans. Very recent legislation now allows the Veterans' Administration to place veterans in intermediate community nursing home care. Previously, only community nursing home placements involving skilled care was permissible. This broadening of feasible community alternatives is likely to result in more appropriate placements of older veterans. States interested in initiating, expanding, or updating their State programs for older veterans receive consultation and aid from extended care specialists. The Veterans' Administration is cooperating enthusiastically with the experimental technology incentives program (ETIP) of the National Bureau of Standards to test technologically innovative devices appropriate to an elderly population.

The extended care service has worked closely with the Administration on Aging (AoA) to coordinate Federal programs on behalf of the aged. For instance, extended care and the Department of Veterans Benefits have been involved in the implementation of a working agreement among the VA, 13 other Federal