Thursday, June 2, 2011

Red Flags Raised for Years Over Vulnerabilities in Guardianship System

A nonpartisan federal report released in the fall warned of flaws in the guardianship system that leave vulnerable people open to exploitation similar to that detailed in a criminal complaint against an Appleton man accused of stealing hundreds of thousands of dollars from clients.

The report from the Government Accountability Board is the latest to raise a red flag about the system. A 2007 study released by U.S. Sens. Herb Kohl, D-Wis., and Gordon H. Smith, R-Ore., suggested improvements to safeguard people who rely on guardians, and a 2006 report by the AARP Public Policy Institute cautioned that checks on guardians were lax.

Jeffrey M. Schend, who owns the company Outagamie County hired to serve as guardian for 48 people, hasn't told investigators where about $500,000 went after disappearing from some clients' accounts. But there were signs Schend wasn't properly reporting financial transactions, including a $4,700 judgment Shawano County won against him in 2010 for his mishandling of a client's account.

Confidentiality concerns
Sylvia Rudek, a director of the National Association to Stop Guardian Abuse, says Wisconsin's system is weighted so heavily in favor of confidentiality that it prevents adequate oversight of guardians, who are hired mostly by counties after a court has determined a person cannot make safe and sound financial decisions. Most of the people represented by guardians are mentally ill, disabled or old.

Rudek said she ran into roadblock after roadblock after learning that a guardian had stolen more than $78,000 from her great-aunt, a Wisconsin resident. Though the guardian, Kathleen Simane, ultimately was sentenced to two years in prison on two theft convictions by a Rock County judge, Rudek said getting the case into the criminal justice system took Herculean efforts.

"We had no idea of what was going on," Rudek said. "I couldn't get any information."

In many states, she said, families can examine a guardian's books, but Wisconsin keeps those records sealed.

"The legislators will tell you the files are closed to protect the ward," she said, using a term often applied to a person represented by a guardian. "In reality, closed files protect the guardian team from oversight."

The report released in September by the federal Government Accountability Office backs up Rudek's contention that guardians are not properly supervised.

The office wasn't able to determine whether abuse by guardians is widespread, but researchers found hundreds of cases in 45 states between 1990 and 2010. Researchers thoroughly reviewed 20 of the cases to try to find commonalities.

"In 12 of 20 cases, the courts failed to oversee guardians once they were appointed, allowing the abuse of vulnerable seniors and their assets to continue," the report says.

Schend was required to file annual reports with Outagamie County's register in probate, Sue Lutz, but she declined last week to discuss his record keeping, citing confidentiality provisions. In all, Outagamie County has 1,065 people served by guardians.

Clients suffer
Sorting out the finances of clients represented by Schend likely will be a long process. Investigators searched his home as well as two rental storage complexes at which Schend rented space and seized several documents from one storage unit. Schend at a Thursday hearing said police took all of his financial documents.

Assistant Dist. Atty. Kyle Sargent said last week some of Schend's clients had limited assets that can make it hard to tell the difference between legitimate expenses and thefts, while some clients had sizable estates that vanished.
"It could get bigger," Sargent said. "It all depends."

Schend has been unable or unwilling to tell investigators where the money went, but two former employees say Schend lived a luxurious lifestyle, taking expensive vacations, buying expensive cars and gambling frequently.

Schend was bonded, which means that his clients might get some of their money back, but Rudek, the director of the National Association to Stop Guardian Abuse, said those victimized by inept or criminal guardians bear the weight of the problem for years.

"I still feel it, mentally and physically," she said. "My aunt saved; she was frugal. (She was) a good woman who worked all her life."

Full Article and Source:
Red Flags Raised for Years Over Vulnerabilities in Guardianship System

See Also:
Read the GAO report: GUARDIANSHIPS - Cases of Financial Exploitation, Neglect and Abuse of Seniors

NASGA: Helen Fabis, Wisconsin Victim

Remembering a Treasured Aunt 10 Years Later

Guardian System Flaws Allow for Exploitation


jerri said...

how many red flags will it take for those in power in the aging committee before someone actually does something about it? the consequences for the years of denial and inaction is irresponsible and to think we pay their salaries and this is what we get in return so folks be ready for the next 5 or 10 or 15 years for more examples of a system gone terribly wrong

Tina said...

Well said, jerri. The Senate Special Committee on Aging has had three previous hearings on the subject. No action, just hearings.

The result? They probably think they've convinced the public that they care. But, they're wrong.

Sue said...

Is anyone paying attention?

How many more victims will it take to get someone's attention?

I truly believe this is adding to our nations financial crisis the question is does anybody see it?

Do they 'get it'?

Thelma said...

Well, Tina,the Committee came up with the idea of training. What a joke!

Lawyers and judgegs need training?
Gimme a break!

If the feds are to do something, it should be to protect their citizens!

Anonymous said...

Heartbreaking to know there are people stored away somewhere while a stranger ~ in this case the stranger appears to be a thief ~ is in charge of their lives and all that they previously owned. This is hard for me to accept as good for society when there is so much wrong.

I pray for those poor souls who have been disregarded and forgotten.

Norma said...

This article tells it like it is. Guardianship abuse is well known by those who should be working to stop it, ie the Senate Special Committee on Aging and Senator Kohl.

Cleaning up 50 states will take 50 years. FEDERAL INTERVENTION IS NEEDED NOW. Are you listening Senator Herb Kohl?

izzy said...

Right in Senator Kohl's backyard....
The people elected to represent us need to put action behind their words. Thank you for continuing to put the overwhelming information together.

honeybear said...

Great reporting! I hope this reporter gets an award for the work he's putting into the Jeffrey Schend story!

Anonymous said...

Guardianship law was created to protect those that need help. People who don't need help are being forced into guardianships so guardians can steal their money and/or the Area Agency on Aging/nursing homes can steal federal funds.

How many of the 48 wards have families/friends who would be happy to help the ward for FREE?

How many of these people actually need help?

A big thanks to the reporter for taking an interest in the story.

Anonymous said...

The guardianship industry is unregulated and no one knows the number of ward of the state on a give date.

But we know how many tv's were sold, and we know how many hamburgers were sold at the large chains ie Burger King and McDonald's for a given year don't we?

We are a nation of statistics yet the guardianship industry is able to keep the numbers off the charts.

How is they are allowed to use the courts to increase their substantial profits and no one knows the amount of money generated by this industry of turiing people into products.

In addition, many in the business of guardianships are listed as non-profit status which earns them big rewards, bonuses less $ to the IRS and state and more $ in their pockets.