Tuesday, May 10, 2016

Tax Judge Finds Elder Abuse, Fraud

Using lies, deceit and abuse, a caretaker bilked an elderly Gilroy man out of nearly $1 million over two years and forced him to live in filth while she enjoyed a lavish lifestyle, then filed fraudulent income tax returns, a U.S. Ttax Ccourt judge ruled.

In an understated but scathing decision on April 21, Judge Mark Holmes opined that Angelina Alhadi, a nursing assistant at St. Louise Regional Hospital in Gilroy and a private caregiver, used undue influence and elder abuse to inveigle $451,891 in 2007 and $474,983 in 2008 from Arthur Marsh, who died in February 2009 at the age of 93.

The retired optometrist and award-winning oil painter at the time suffered from dementia and a host of physical ailments and became so emotionally dependent on Alhadi that he paid her nearly twice the going rate for her services and wrote her numerous large checks, typically at her insistence, according to the 37-page decision.

Among other things, there was money paid for a $100,000 down payment on a Gilroy home, a $60,000 pool and a $25,000 cruise for her family. Marsh was forced to go on the foreign cruise but was often neglected while Alhadi and her family partied, according to the court filing.

The decision was rendered under Rule 155 of the tax code. That means Alhadi and the Internal Revenue Service, which brought the case to tax court, must now meet and reach a settlement of the unpaid tax debt.

They have until June 21 to submit computations and positions for Holmes’ consideration and final decision.

After Marsh’s death, the Santa Clara County District Attorney investigated Alhadi’s involvement in his life but no charges were filed.

County and state guardians and senior welfare agencies also investigated and gave testimony to the Internal Revenue Service.

The IRS acted on the tax aspects of the case, alleging the woman failed to report income and filed false tax returns.

It’s unclear if Judge Holmes’ findings of elder abuse will trigger another probe into Alhadi’s conduct and the circumstances of Marsh’s death.

Alhadi claimed in her defense that the money represented nontaxable loans or gifts, but the IRS argued it was taxable income, and she should pay a penalty for committing fraud, because the funds were taken while Marsh was under “undue influence” and was being subjected to elder abuse, according to the court findings.

In deciding the case, Holmes noted Marsh came from humble beginnings and grew up during the Depression. After a successful optometry practice that served three generations, Marsh, who had never married and was known as Art to his friends at St. Mary Church and Gilroy Rotary, retired to his 800-square-foot, second-story apartment on Carmel St.

Holmes observed that the poverty of his life “…marked him for life and made him frugal. He rented his little apartment for $175 a month and got by largely on Social Security. But Dr. Marsh had been a good businessman, saving over $1 million before he retired in the ’80s and investing it prudently well into retirement until it reached nearly $3 million.”

And when he became ill and infirm and his mental faculties began to fail, he became a prime target for the kinds of people who pry on the elderly, said James Simoni, the Gilroy attorney specializing in senior law who handled Marsh’s affairs and tried unsuccessfully to stop Alhadi.

In 2000, Marsh had a fall that broke his hip and required hospitalization. It was while in the hospital that doctors noticed his decline, which then worsened.

Judge Holmes wrote, “In 2007, when he was 91, things grew still worse. He couldn’t drive a car, he couldn’t go to the doctor, and he could no longer even prepare his own food. He suffered from incontinence, atrial fibrillation, congestive heart failure, hypertension, chronic back pain, arthritis, hearing loss in both ears, and deteriorating vision; then he suffered a stroke in the right frontal lobe of his brain.

“His physician, Dr. George Green, diagnosed him with dementia and cognitive decline. These neurological problems showed themselves in Dr. Marsh’s poor short-term memory, diminished long-term memory, inability to perform simple arithmetic, and persistent deficiencies in visuospatial analysis. These problems also made him vulnerable…”

By that time, Marsh had hired Alhadi and soon was paying her almost double the normal rates for her caregiver services even though, according to the court decision, she ignored his most basic care and pressured him to pay her more and give her large checks for personal things.

The court document describes his tiny apartment as messy and filthy, relates Alhadi’s deliberate and successful measures to isolate Marsh from his nearest relative, by cutting off all phone contact with the niece, and her attempt to wrest from him legal control of his assets.

The Holmes decision relates testimony from the niece, Sheila Person, about the scene during her uncle’s funeral at St. Mary Church in Gilroy.

“Alhadi, dressed in full hijab and carrying a single red rose, tried ‘to crawl in the coffin or get inside there and she was screaming.’

“This was the last contact Ms. Alhadi had with Dr. Marsh,” Holmes wrote.

Simoni said when he became aware of a possible problem when his client asked him to authorize several very large checks for Alhadi including, three months before his death, an huge advance payment to care for him for the rest of his life.

He brought his concerns to Marsh’s financial fund managers who refused to release the money, he said Monday.

Judge Holmes wrote: “Ms. Alhadi made a last lunge for Dr. Marsh’s money. She took him to see an estate attorney, James Simoni, in November 2008 to have Dr. Marsh grant her a power of attorney.
Mr. Simoni, whom we also find a credible witness, testified that he learned about the blocked Vanguard accounts and supposed promise by Dr. Marsh to Ms. Alhadi to pay her approximately $300,000 in exchange for taking care of him for the rest of his life. We find that this trip to his office was a ploy by Ms. Alhadi to get those accounts unblocked and to get her hands on the last few $100,000 checks that Dr. Marsh had written. Dr. Marsh later told Mr. Simoni that Ms. Alhadi was pressuring him to get named in his will, and that he needed to create a separate trust for her so that his family members wouldn’t be able to interfere. Mr. Simoni refused to be part of this, and even tried to convince Ms. Alhadi to return the money she had already received. She told him: “Why should I, he gave it to me.’” The tax court decision can be read online here: http://1.usa.gov/1SewClv.

Full Article & Source:
Tax Judge Finds Elder Abuse, Fraud


Peter Clemmons said...

It is so scary. Everyone wants to be at home and be taken care of. But, the thieves have invaded home care now, so we all must be vigilant.

Betty said...

How could this have gone on so long? It's unbelievable to me.