Saturday, December 12, 2020

Canton Court Clerk and Collector fired, arrested for forgery and financial exploitation


CANTON, Mo. (WGEM) -- Lewis County Sheriff David Parrish reported Wednesday the arrest of the now fired Canton City Collector and Municipal Court Clerk.

Parrish said La Trisha Crist, 38, was charged with one count of forgery, a class D felony, two counts of financial exploitation of an elder/disabled person, a class D felony, and two counts of financial exploitation of an elder/disabled person, a class E felony.

Sheriff Parrish stated Crist is alleged to have created a false document related to her role as the clerk in charge of water and sewer bills in June, 2020.

Parrish added at that time, she allegedly removed herself as the primary account holder and placed the water bill under the name of a family member who had been renting a property Crist owned at 116 South Fifth Street, Canton, Missouri. There was approximately $300.00 owed to the city of Canton for non-payment.

Parrish reported that Crist then began the process to have the family member sent to a collections agency. 

All of these incidents occurred without the authorization of proper city of Canton personnel, Parrish added.

In addition Sheriff Parrish stated in June the Sheriff's Office received a report that Crist was stealing money from an elderly and disabled family member.

During this investigation, the Sheriff's Office learned Crist had been over-seeing the financial matters of the family member since 2017.

After extensive review of various financial records, Parrish reports that Crist is alleged to have used the family member's debit card, stimulus check and other credit cards for her own personal gain in excess of $6000.

Lewis County Assistant Prosecutor, Chelsea Fellinger, filed formal charges and sought a warrant from the court.  A warrant on all counts was received on December 8.

Crist's bond was set at $5000 with corporate surety allowed by Associate Judge Thomas P. Redington.

The Sheriff's Office was assisted by the Canton Police Department.

Canton Mayor Jarrod Phillips said the city terminated Crist on December 4.

 
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Erie Attorney Disbarred After Pleading Guilty to Felony Forgery, Theft Charges

An Erie lawyer has been disbarred after pleading guilty to several felony charges for keeping settlement money from clients.

Robert Barbato Jr., 32, will no longer be able to practice law in the state starting Dec. 17. The order was handed down Tuesday by the Disciplinary Board of the Pennsylvania Supreme Court after Barbato submitted a verified statement of resignation.

Barbato entered the guilty plea to a felony count of forgery and four felony counts of theft Nov. 3. Nine other charges were dropped.

Investigators said Barbato collected settlement-type checks and failed to forward them to his clients.

A total theft of more than $270,000 was reported between January 2014 and Jan. 29, 2020. He was arraigned on the charges in late February.

The Disciplinary Board placed Barbato on temporary suspension in March.

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Pandemic leads to an increase in financial exploitation of senior citizens

By: Seena Sleem

NASHVILLE, Tenn. (WTVF) — The pandemic has isolated many people, especially Tennessee senior citizens.

"I think that's especially true with our elderly population," said senior advocate Joseph McAnally, with the Office of Family Safety. "They have fewer interactions with communities, fewer doctor appointments, religious services."

It's a worry for McAnally because he says since the pandemic, the Office of Family Safety has seen an increase in elder abuse but there are fewer opportunities for people to spot it happening.

"Then you put on top of that the economic hardship of the pandemic that has resulted in a lot of people losing jobs so you have a lot of adult children depending on elderly family members more now," McAnally said.

Ashley Hunter is the director of the "Victory Over Crime" program at FiftyForward.

They've also seen this uptick when it comes to financial exploitation with elderly folks specifically.

"Adult children are getting into a weird place financially because of COVID and needing help from family," Hunter said, "so they're moving in with mom dad grandparents who are older adults and then a situation occurs where older adult is financially supporting child or grandchild and they're not able to financially able to support themselves to take care of themselves with the things they need."

Signs of financial abuse are unusual withdrawals or insufficient fund activity, forged signatures on documents or confusion of missing funds.

Elder abuse can also be in the form of physical and emotional abuse. Look out for bruises or broken bones.

During this is a time when everyone is being told to stay home but still, make sure you check in with your vulnerable relatives, neighbors, and friends.

Advocates say many of these situations go unreported because victims are scared or don't want to get their family member in trouble.

FiftyForward does client check-ins and assessments. Their "Victory Over Crime" program supports older adults who have been victimized by crime. If you know of an older adult in need, you can call them Monday-Friday at 615-743-3416.

 
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Friday, December 11, 2020

Guardians seek changes to assist in final arrangements

Pryor
Dillman

by Olivia Covington

In the year of COVID-19, court-ordered adult guardians have faced a grim reality: their clients, many at a high risk for medical complications, are getting the virus and passing away.

For Becky Pryor, a longtime guardian and guardianship advocate, a typical year might include one client death, maybe two. But by October of 2020, two of her wards had died after a positive COVID-19 diagnosis. By November, three had.

“It’s no joke. This is real,” said Lisa Dillman, a partner at the elder law firm of Applegate & Dillman. Like Pryor’s guardianship practice, Dillman’s firm has dealth with more deaths in 2020 than normal.

Aside from the emotional toll of losing a guardianship client, another longstanding issue in the guardianship world has been exacerbated by the pandemic, Pryor said. When a client dies, guardians are unable to finish their duties, she said, specifically overseeing the disposition of the body.

Under Indiana law, a guardianship ends at the time of a ward’s death. While a guardian will have financial and administrative duties to tie up, Pryor said the statute gives her and other guardians no authority to oversee post-mortem matters.

Instead, the law lists several other parties who can tend to those matters, including surviving spouses and powers of attorney, to name a few. But to Pryor and others working in guardianship, the question is, what if a spouse or power of attorney isn’t willing or able to do the job?

To that end, a guardianship task force has recommended that the Indiana Legislature amend state statute to give guardians authority over dispositions if necessary. While the concept received general support in a recent meeting of the Probate Code Study Commission, the question remained: how do you balance the authority of a guardian with that of another party, such as a POA?

That issue, Pryor said, is one that must be resolved in order to get a bill passed.

Making the list

Pryor presented the legislative proposal to the Probate Code Study Commission on behalf of the Working Interdisciplinary Networks of Guardianship Stakeholders — or WINGS — Indiana Adult Guardianship State Task Force. The group representing nearly 200 advocacy organizations proposed amendments to Indiana Code § 29-3-12-1(e) and I.C. 29-2-19-17(2) to allow a guardian to oversee a ward’s disposition.

The former statute provides that “(w)hen a guardianship terminates by reason of the death of the protected person, the powers of the guardian cease, except that the guardian may pay the expenses of administration that are approved by the court and exercise other powers that are necessary to complete the performance of the guardian’s trust … .” But under the latter statute, those “other powers” do not include disposition of a body.

Instead, I.C. 29-2-19-17(2), Indiana’s funeral planning declaration statute, names 10 individuals, listed in order of priority, who can sign off on a disposition. Among them are a power of attorney, a surviving spouse or “any other person willing to act and arrange for the final disposition of the decedent’s remains … .”

Bennett
Ken Bennett practices guardianship law at Bennett & McClammer in Indianapolis and is also CEO of the nonprofit CARE, or Center for At-Risk Elders Inc.. When the issue of disposition has arisen in CARE’s cases, he said the organization has relied on the “any other person” provision — number 10 in the list of 10 individuals — to allow CARE to oversee final disposition.

The problem, though, according to Pryor, is that the number 10 option comes with a caveat: the individual acting as “any other person” must “attest in writing that a good faith effort has been made to contact any living individuals described in subdivisions (1) through (9).”

Guardians are often asked to attest that they do not know of any other individual who could sign off on disposition, Pryor said, which may not be the case. An adult under guardianship may have living family or a power of attorney, she said, but those individuals may have proven themselves to be unwilling or unable to carry out these duties.

Willing and able

That issue proved to be a sticking point when the Probate Code Study Commission met in October to discuss the amendments. Under the WINGS proposal, the funeral planning declaration statute would be amended to give guardians the second priority spot on the list, bumping powers of attorney down to the third spot and spouses to the fourth.

Probate attorneys on the commission questioned that move, noting that powers of attorney generally have greater authority under Indiana law than guardians. Commissioner and Vincennes lawyer Jeff Kolb opined that POAs likely knew the incapacitated adult while guardians could be strangers. Similarly, lawyer and commissioner Jim Martin said a power of attorney would have to be revoked to give a guardian greater authority.

Pryor did not question their legal arguments, but instead pointed to what she said is a practical reality: If an adult is under guardianship, the POA, who is often a family member, likely has been unwilling or unable to perform their duties. She and other guardians will frequently petition courts to revoke a POA in those situations, she said.

What’s more, Pryor continued, guardians usually know their clients well and are familiar with their needs and wishes.

Pryor told IL if a client’s spouse is living, they will be consulted in issues regarding disposition. But if a guardianship was ordered, the spouse likely was unable to adequately care for their husband or wife.

Two or three?

Pryor said Sen. Tim Lanane, D-Anderson, has agreed to carry legislation in the 2021 session that would make the changes the task force is seeking. IL was unable to reach Lanane for comment.

The big question that needs to be answered, Pryor told IL, is what place on the list guardians should take. But there are other statutory issues that may arise.

Bennett, for example, noted there are conflicts in Indiana law regarding the authority of a power of attorney and the authority of a guardian. If a guardianship is in place, he said, the guardian seems to be the more natural decision-maker.

Additionally, Indianapolis probate lawyer Jeff Dible told the commission that there are three other lists in Indiana probate law that track with the list of individuals in the funeral planning declaration statute. If one list is changed, Dible said, the other three would have to follow.

Like Pryor and Bennett, Dillman supports the proposal but offered some practical advice if a bill is not passed this year.

“If a client goes and hires a lawyer to do a power of attorney, the job doesn’t stop there,” Dillman said. “… If the client is not sure what they want yet, they should appoint someone who has the authority. This could all be handled in a preplanning situation.”•
 
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Protected or Prisoner Part 7: Can the Britney Spears case be the tipping point for change within a system rife with abuse?

By Apryl Marie Fogel 

In this Thursday, Oct. 18, 2018, file photo, singer Britney Spears makes an appearance in front of the Park MGM hotel-casino in Las Vegas. Spears wants to be freed from her father. In a recent series of court maneuvers, Spears has sought greater say over her life and affairs, which for years have been under the control of a court conservatorship run mostly by her father, James Spears. (Steve Marcus/Las Vegas Sun via AP, File)

Policy changes and pop stars – two topics that aren’t frequently discussed together. With the growing spotlight on Britney Spear’s contested conservatorship, that is changing. Many in our nation are getting a first glimpse at a broken system that has ruined lives, drained bank accounts, and destroyed families across the nation.

Don’t get me wrong; even Britney will tell you: there’s a time and a place for the court to examine all evidence, hear all sides and make well-informed judgments on the appointment of a trusted and qualified conservator to protect those who cannot protect themselves. It’s been said Britney herself has agreed that her own conservatorship was initially needed. But her lawyer is claiming the situation in her case and, all too often in our own communities, the people who the court claims they are trying to protect actually find themselves prisoners. 

With Spears’ birthday this week and recent court arguments coming to light, we can all hope there is a tipping point coming. Not only a time for a change in Britney Spears’ case but also a time for state and federal lawmakers to reexamine and fix the problems that have repeatedly been acknowledged by families, national advocates, the Bar Association, and even the Government Accountability Office.

The #FreeBritney movement has taken hold and captured the attention of the nation and the world, and my hope is that the same people watching the case unfold come to see the bigger issue – that this is happening in cities and counties in each and every one of their backyards.

Multiple petitions to release Britney Spears from her conservatorship have gained the support of hundreds of thousands of people. The Twitter hashtag #FreeBrittney brings up countless tweets in many languages. With Britney’s 39th birthday on Dec. 2, the timeline is currently flooded with warm wishes and messages that include hopes that she will be freed from her conservatorship.

Articles can be found in nearly every media outlet across the web. From PeoplePage 6, and Vanity Fair to more traditional news outlets like CNN, ABC News, and NBC. It seems every outlet is detailing her case. A case that began in 2008 with a temporary order placing Britney under her father James Spears’ control during a mental health crisis is now on year 12, with no discernable end in sight. 

As Alabama Today reported previously in our second in this series, “The American Bar Association published a study in 2017 on the Restoration of Rights in Adult Guardianship that found, “an unknown number of adults languish under guardianship” when they no longer need it, or never did. The authors wrote that “guardianship is generally permanent, leaving no way out—‘until death do us part.’ ”

Earlier this week NPR did a story on conservatorships based on Britney’s case noting that a DOJ study found that there are an estimated 1.3 million people who are involved in conservatorship cases in the U.S. They play the tearful audio of the only time Britney detailed her feelings on her conservatorship publicly. She compared it to a prison sentence but said even then you know when you’re going to get out. She went on to say it was like groundhog day. 

It was widely reported that during a November hearing, Brittney’s attorney told the court, “My client has informed me that she is afraid of her father.” Going on to say, “She will not perform again if her father is in charge of her career.” ABC News Reports detail how Britney is not only not getting a say in choices that affect her life; her estranged father isn’t even informing her of major decisions and changes that impact her.

It is unconscionable that a system designed to protect the vulnerable from being victims is making so many feel victimized and taking away their rights and their voices.

The system hasn’t spared us in Alabama or even Jefferson County, AL. either. We’ve had our own share of “egregious” violations of civil rights as well as a lack of transparency and accountability.

In the case that spurred months of investigative journalism and this series by Alabama Today, that of Joann Bashinsky (aka Mrs. B), the Alabama Supreme Court issued a scathing rebuke of Judge Alan King’s actions. Actions that others say are commonplace in courtrooms around the state. Emergency orders that went on for long periods of time and wards, or would be wards, left without representation or their voices heard.

As reported in the Washington Post the in the case before the Alabama supreme court, “Justices said Bashinsky’s basic due-process rights were egregiously violated when the probate court made the emergency decision without giving her time to obtain counsel after her lawyers were disqualified. The permanent petition remains pending before the court.

Joann Bashinsky is the widow of Sloan Y. Bashinsky, Sr. who owned the majority stock in Golden Enterprises, Inc., and who was the founder, chairman, and chief executive officer of Golden Flake Foods. Her personal estate is estimated to be worth $80 million, and her entire estate was valued at $218 million.
 
Is the Bashinsky case unique? No. How many more are like it? We don’t know, but we’re trying to find out. We have heard from others that Judge King was known to put wards under the supervision of his handpicked court-ordered conservators, even when family members were willing and able to fulfill the role.

We don’t know how many though. As the Government Accountability Office and other watchdog groups have noted, data on contested conservatorship and/or guardianship cases is mostly unknown.

I asked the Jefferson County probate court first in a series of emails and then in an official public record request, a series of questions about how many cases have been processed here in the last several years. My request was first dated June 15, 2020.  As of December 7, 2020, I have no answers. The probate office, in the first 48-hours, did provide a litany of excuses for not providing the records. First, they stated they needed a judge’s permission. Specifically, they said they needed Judge King’s permission, even though he retired prior to my request.  Second, the supervisor blamed the lack of ability to produce a response on the county’s dated computer system, even though the person at the desk told me that they used to be able to provide the data. Finally, I was told the delay was related to staffing shortages. The underlying cause of both the bad system and the staffing issue was apparently due to a county commission’s lack of funding. So what can we do? Besides following the Britney Spears case, we can contact our local, state, and federal lawmakers about reforming contested conservatorships and making the system more transparent. 

Alabama can adopt recommendations from the American Bar Association that would address this problem by making the type of information I’m requesting (the number of conservatorship and guardianship cases assigned to county-designated conservators public in both contested and uncontested cases) and requiring it to be presented to the state and made publicly available online by county.

The ABA, in a policy statement on the issue, said among other recommendations, it “encourages the federal government to provide funding and support for training, research, exchange of information on practices, consistent collection of data, and development of state, local and territorial standards regarding adult guardianship.”

A google search for “Britney Spears conservatorship” brings up over 2,530,000 hits. I hope that from her story, there is additional transparency and accountability for many who don’t have her fame, her wealth, or her legions of fans. You can help by calling your county commissioners and state legislators and telling them it is time to protect those who can’t protect themselves.

This is the latest installment in an ongoing investigative series. You can earlier posts Part 1 here, Part 2 here, Part 3 here, and Part 4 here, Part 5 here, and Part 6 here. 

 
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Which nursing homes have COVID-19 deaths? Ohio Department of Health says it doesn't know

More than half of Ohio's COVID-19 deaths in nursing homes

COLUMBUS — A stunning admission from state health officials: those in charge of tracking the coronavirus in Ohio claim they have no idea which nursing homes have had COVID-19 deaths.

Deaths in nursing homes account for more than half of Ohio's 7,187 COVID-19 deaths. More than 3,800 nursing home residents have died from COVID-19 and we do not know where, according to the Ohio Department of Health. 

The revelation follows a joint investigation with our partner Scripps station, WCPO-TV in Cincinnati, that first began last August and resulted in a lawsuit filed in the Ohio Court of Claims seeking health department records identifying how many have died in the more than 900 individual nursing homes across the state.

Ohio only released total nursing home deaths by county, unlike other states including Michigan, Pennsylvania, Kentucky and Indiana that make pubic the total number of COVID-19 death by individual facilities.

In court documents seeking to dismiss the case, the Ohio Department of Health argues "the records do not exist".

Jack Greiner is a Scripps attorney who has filed a motion opposing the health department's efforts to dismiss the case, arguing that failure to produce the records "suggests rank incompetence at ODH" adding that "the statement does not appear to be true" based on additional information in the form of an affidavit obtained by Scripps.

By failing to report COVID-19 deaths by individual nursing homes, the public has no idea how safe a facility may be.

Paula Mueller heads up Elderly Advocates, a group that seeks to help families with loved ones in nursing homes; she says these records should be released.

"The most important reason that families need this information to make informed decisions on where they might place a loved one," Mueller said.

Meanwhile, the lawsuit seeking records in the public interest continues and it could be at least a month before a judge rules on our request for information. 
 
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Thursday, December 10, 2020

Former Alabama judge sentenced to prison for theft


ATHENS, Ala. (AP) — A former Alabama judge who pleaded guilty to felony ethics and theft charges was sentenced to four years in prison during a hearing Tuesday.

Douglas Patterson, who resigned from his job as district judge in Limestone County in July, also was ordered to pay almost $73,000 in restitution, and sheriff's deputies took him into custody immediately, news outlets reported.

After serving his sentence, Patterson must spend six years on supervised probation and could be sentenced to additional time in prison if he fails to comply with its provisions.

Patterson, 38, pleaded guilty in October after being indicted last year on charges of financial exploitation, theft and using his position for personal gain. He was was accused of taking more than $47,000 from a juvenile court fund as judge and stealing from the conservatorship account of a disabled person while working as a private attorney.

Former Gov. Robert Bentley appointed Patterson to the judgeship in March 2016, and he later ran unopposed and won a six-year term.
 
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Former Brooklyn lawyer accused of $8M deed theft scheme

Sanford Solny accused of reaping $600K in rent on unlawfully obtained homes
 
By Georgia Kromrei

From left: 161 East 29th Street in East Flatbush, 2 Jardine Place in Ocean Hill and 163 Montauk Avenue in Cypress Hills (Google Maps)

A former Brooklyn attorney has been indicted for carrying out a nearly $8 million deed theft scheme, a practice that is not uncommon in areas with high foreclosure rates.

Brooklyn District Attorney Eric Gonzalez accused Sanford Solny of stealing deeds to eight properties in foreclosure by tricking victims into handing over their homes. He allegedly collected over $600,000 in rent from the properties, which are located in Bedford-Stuyvesant, East New York, Cypress Hills, Flatbush and Ocean Hill. The homes were valued at $7.8 million.

Solny was served a 63-count indictment for grand larceny, scheme to defraud and possession of stolen property.

“Brooklyn’s valuable real estate market continues to be an attractive target for fraudsters willing to deceive homeowners,” said Gonzalez. “These victims, who trusted the defendant to help them avoid foreclosure, instead allegedly had their homes stolen by him and were left facing financial ruin.”

The alleged deed thief, who lost his license to practice law in 2012, just before the alleged scheme began, received homeowners desperate to avoid foreclosure in his Borough Park office. Solny convinced them he would sell the properties to a third party in order to save their homes from foreclosure, and paid the alleged victims between $1,000 and $18,000 to take control of their properties.

According to Gonzalez, the homeowners believed that after Solny sold their properties to a third party, the lender would forgive the loan amount. Instead, Gonzalez alleges that Solny never made any effort to sell the properties.

In some cases, the alleged victims would sign the deeds over to Solny directly, believing that doing so was necessary to carry out the short sale. In other cases, Solny would instruct the homeowners to sign paperwork they thought was related to the transaction, but instead ceded ownership of their homes. After the transaction was completed, he convinced the homeowners to vacate the property.

Solny’s alleged scheme is not an isolated occurrence, especially in minority communities, where foreclosure rates are elevated.

When a foreclosure filing is made public, which happens long before the lender takes back the keys to the property, homeowners are often met with a barrage of solicitations from lawyers, real estate brokers and house flippers with cash offers. The onslaught is such that foreclosure prevention specialists often struggle to distinguish themselves and reach the homeowner.

The pressure to sell rather than refinance or seek assistance is particularly severe in neighborhoods like East New York and Cypress Hills, where foreclosure rates are higher than the rest of the city. In November, the New York Department of State declared parts of those neighborhoods a “cease and desist zone,” a move that the Long Island Board of Realtors opposed.

Homeowners in parts of East New York and Cypress Hills can now add their names to a published list, which forbids real estate brokers from contacting those facing foreclosure without their permission. The restrictions will be in place until 2025.

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Advocating for the Nation's Elder Population


OIG has a long history of protecting the health and well-being of HHS beneficiaries, including residents in long-term care facilities such as nursing homes, many of whom are seniors. As part of our commitment to this important work, our oversight agency collects and investigates tips and complaints about fraud, waste, and abuse in these facilities.

Unfortunately, during the COVID-19 pandemic, we have seen a spike in the number of reports of elder harm and neglect. Also, of great concern is the rise in the number of bad actors preying on unsuspecting individuals in our country, including many Medicare and Medicaid beneficiaries.

As we continue to aggressively investigate those who cheat our programs or hurt beneficiaries, we want you to know that the public can effectively advocate for this vulnerable population by reporting patient safety and fraud concerns. While there are many ways that long-term care residents can be subject to harm, here are a few:

Harm or Neglect

  • If residents have bruises, fractures, lacerations, abrasions, contusions, or other bodily injuries, this may indicate potential physical abuse, sexual abuse, or neglect.
  • Behavioral changes or non-verbal signals that a resident may be in fear of specific staff or caretakers. This may indicate possible abuse.
  • Poor hygiene and sanitation practices and delays in transferring ill residents to hospitals can result from failures in quality of care.
  • Employees who do not follow COVID-19 health and safety precautions demonstrate inadequate infection control measures and risk exposing residents and other staff to the virus.

Fraud

  • Fraudsters visit facilities and offer medical services in exchange for Medicare and Medicaid numbers that are then submitted in fraudulent claims to insurers.
  • Scammers reach residents via unsolicited telephone calls, television commercials, and internet pop-up ads attempting to obtain personal information and commit medical identity theft.
  • Fraudulent health care providers and prescribers may provide medically unnecessary treatments and products to residents and bill for the illegitimate services.

Take the Lead:
Report Fraud, Abuse, and Neglect

If a senior is not in urgent danger, but you suspect fraud, abuse, or neglect has or is occurring, please report your complaint to local law enforcement, state agencies, including your state Medicaid Fraud Control Unit (MFCU), or to HHS OIG at tips.hhs.gov.

In addition, should you, or someone you know, be in urgent life threatening danger, please call 911 for an immediate response. Medical authorities can address the issue quickly and alert the proper authorities that a nursing home may be failing to keep residents safe.

 
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Wednesday, December 9, 2020

Pa. National Guard leader abruptly retires amid investigations into veterans' nursing home, Horsham air base

By WILLIAM BENDER

PHILADELPHIA, Pa. (Tribune News Service) — Pennsylvania Gov. Tom Wolf's top military affairs official abruptly retired over the weekend amid investigations into dozens of coronavirus deaths at a state-run veterans home in Chester County and allegations of sexual harassment and retaliation at a National Guard station in Montgomery County.

Wolf on Saturday announced that Maj. Gen. Anthony Carrelli was retiring from his cabinet-level position, effective immediately. The administration would not explain the reasons for his departure.

Carrelli, as adjutant general and head of the Department of Military and Veterans Affairs, was in charge of the state's National Guard units, as well as six state-run nursing homes for veterans and their spouses.

Both institutions have faced scrutiny this year.

In August, two Philadelphia-area congresswomen asked Carrelli to address allegations of misconduct at the Horsham Air Guard Station. The letter to Carrelli followed an Inquirer report in which the base's former sexual assault response coordinator said she was unfairly terminated, and other women described years of rampant sexual harassment and discrimination.

A National Guard brigadier general from West Virginia is now investigating the Horsham base, according to people who have recently been interviewed. Carrelli is a former commander there.

Carrelli's department is also facing an outside investigation into how it responded to the coronavirus pandemic at the Southeastern Veterans' Center, where at least 42 people died of COVID-19.

The Inquirer has reported on how the pandemic tore through the 238-bed home in Chester County, while residents and their families struggled to get information. Officials were slow to adopt infection-control procedures and initially discouraged nurses and aides from wearing face masks.

Employees there told The Inquirer in May that the facility had been mismanaged for years under Commandant Rohan Blackwood and his senior staff. Blackwood and his director of nursing were suspended in May as the state investigation got underway.

Pennsylvania Auditor General Eugene DePasquale released a report last week that criticized the nursing home's slow response to the virus.

Carrelli could not immediately be reached Monday about his retirement.

Lyndsay Kensinger, a spokesperson for Wolf, declined to elaborate on the circumstances of Carrelli's departure, other than to say in an email: "Maj. Gen. Carrelli's decision to retire last week after 35 years of public service was not made at the request of the administration."

Wolf has appointed Maj. Gen. Mark Schindler as acting adjutant general.

Carrelli, who was paid $176,760 a year, is a former Air Force fighter pilot who served in Afghanistan and Iraq. He was named adjutant general in January 2016.

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Former Limestone County judge sentenced to 4 years in prison


MONTGOMERY — Attorney General Steve Marshall announced on Tuesday that former Limestone County district judge Douglas Lee Patterson has been sentenced to serve four years in prison.

Patterson pleaded guilty on Oct. 30 to three felony charges: use of official position or office for personal gain, financial exploitation of the elderly in the first degree, and theft of property in the third degree.

He is set to serve four years in prison followed by six years of supervised probation. Patterson, according to a news release from Marshall, is required to serve all of the four years in prison, and if he fails to abide by the terms of probation, he could be ordered to serve another 12 years in prison. He was also ordered to pay restitution totaling $72,822 to his victims.

“It is fitting that Patterson has received a stern sentence for his crimes and that we have brought a measure of justice for his victims,” said Attorney General Marshall. “He betrayed the citizens of Limestone County and exploited those who trusted him, stealing from the most vulnerable among us — children, the disabled and the elderly. This sentence serves to restore the public confidence in our judicial system and sends a strong warning that such despicable actions will not be tolerated, and all will be held equally to account under the law.”

FBI Birmingham Special Agent in Charge Johnnie Sharp Jr. said, “Everyone, even judges, are subject to the rule of law. The sentence handed down today demonstrates the FBI’s firm commitment to work with our law enforcement partners to address public corruption at every level and hold public officials accountable when they violate the law, their oath of office and the public’s trust.”

As part of Patterson’s plea agreement, he admitted to stealing $47,800 from the Limestone County Juvenile Court Services Fund, which was designated to support the children of Limestone County.

Patterson also admitted in court that, while serving as a private attorney, he financially exploited Charles Lee Hardy, for whom he served as a court-appointed conservator. Hardy died in December 2015 and was left with nothing to inherit to his family.

Patterson also admitted to stealing from another client, Rudolph Allen, while in private practice. According to Tuesday’s announcement, Patterson stole $601 from Allen three years after he died in July 2015. Patterson spent the money on himself rather than turn it over to Allen’s family.

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Two charged in ‘grandparent scam’


CLEVELAND — Two Tampa, Fla. men are charged in a nine-count federal indictment involving the scamming of elderly people throughout the Northern Ohio district.

John Tyler Pla, 25, and Johnny Lee Palmer, 25, both of Tampa, are charged with conspiracy to commit wire fraud and wire fraud, according to U.S. Attorney Justin Herdman. A federal grand jury sitting in Toledo returned the indictments.

“Protecting our district’s elderly and vulnerable populations from scammers and fraudsters is an important part of the work we do every day at the Justice Department,” Herdman said. “Manipulating and exploiting our district’s elderly in any way, for any reason, will be met with swift prosecution.”

FBI Special Agent Eric B. Smith said his unit is increasingly watching over the elderly to prevent scams.

“The FBI encourages everyone to educate their elderly family and friends on financial scams such as this,” Smith said, referring to the case against the Florida men. “These two fraudsters played on the heart-strings of grandparents. Discussions prior to receiving a possible phone call from scammers can prevent your loved one from being a victim.”

According to the indictment, from July 20 to Aug. 28 this year, the defendants are accused of conspiring together to orchestrate a “grandparent scam” on elderly victims in Brecksville, Parma, Gates Mills, Lorain, Mansfield, Fairview Park, Westlake and Mentor.

To conduct their alleged scheme, the defendants are accused of calling elderly victims in these areas claiming to be a relative — such as a grandson, granddaughter, or an attorney for the relative — and informing the elderly victim that he or she had been arrested and needed money for bail.

The indictment states that the conspirators would then arrange for a purported courier to pick up the money in person. The defendants would then rent a U-Haul vehicle and travel to the victims’ residence to collect the money in person. In total, the victims suffered a combined loss of $383,932.

The investigation preceding the indictment was conducted by the Cleveland Division of the FBI and Westlake Police Department. This case is being prosecuted by Assistant U.S. Attorney Brian McDonough.

According to Herdman, this case is part of the Justice Department’s 2020 national Money Mule initiative. The Money Mule initiative seeks to stop the financial exploitation of the nation’s elderly and vulnerable populations.

Since President Donald Trump signed the bipartisan Elder Abuse Prevention and Prosecution Act into law, the Department of Justice has participated in hundreds of enforcement actions in criminal and civil cases that targeted or disproportionately affected seniors.

In particular, in March, the department announced the largest elder fraud enforcement action in American history, charging more than 400 defendants in a nationwide elder fraud sweep.

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Tuesday, December 8, 2020

Financial exploitation a menace as pandemic isolates elders

Credit: Ben Gray

By Ariel Hart

The signs of trouble are clear to J.D. Frazier as he works to help a woman sliding into dementia.

The state-registered decision-making guide is helping her contact experts to arrange and protect her assets. But she is easily swayed, and family members who lost income in the pandemic are on her doorstep. She agreed with them to cancel her appointment with a lawyer.

Now Frazier is having trouble reaching her.

It’s an additional toll among older people during the pandemic: Their diminished social contacts make it less likely that others would notice problems that could put them at risk of exploitation.

“The pandemic, it’s a perfect storm,” Frazier said.

Elder financial exploitation ballooned following the 2008 housing bust: everything from scam calls and con jobs to the most common type of all, family financial exploitation. And exploitation and fraud are likely ballooning now, experts say.

“Imagine 22 million people lost their jobs in the last nine months and 10 million have not regained their job,” said Kristen Lewis, an attorney in special needs estate planning who helps her clients try to protect their assets. “People do desperate things.”

The U.S. Department of Health and Human Services’ Office of the Inspector General said it has seen a spike in elder harm and neglect and is concerned about the level of fraud. The FBI said in a statement that fraud in general has increased, driven in part by COVID-19 related schemes, and that elder fraud was an FBI priority.

It’s nearly impossible to get numbers that tell the true story, however.

J.D. Frazier, state-registered decision-making guide, says that elders experience with the pandemic creates a "perfect storm" for risk for exploitation. (Ben Gray for the Atlanta Journal-Constitution)
Credit: Ben Gray

“About 1 in 23 cases are reported,” said David Blake, a financial forensic specialist with the Georgia Department of Human Services, in a November webinar on the subject. “It’s like an iceberg.”

About 90% of perpetrators of elder abuse, neglect or fraud are adult children or spouses, and often caretakers, Blake said. The acts can range from unduly pressuring an elder person to give money, or asking at all when the person has lost their cognitive ability; to outright fraud or identity theft.

Blake added: “It becomes worse in the pandemic.”

The elderly can also be at risk from other caregivers and from strangers.

In Georgia, a caseworker with the state’s Adult Protective Services was arrested in September on suspicion of stealing money from a Toccoa man he was supposed to be protecting.

The Federal Trade Commission has warned that social isolation of the coronavirus lends itself to successful scams. As seniors isolate, scammers are offering help in running errands or performing tasks, like landscaping, but taking off with the money. Older people are also targeted with telephone scams, told a loved ones needs money immediately to pay a hospital bill, get home from a foreign country, or pay off a debt.

“My in-laws just received a call, claiming my daughter was in jail for a car accident & wanted $16,000,” one reader posted on the commission website. “She sounded like my daughter.”

Frazier, who is a quadriplegic, is registered as a “neutral” with the Georgia Office of Dispute Resolution. He has seen in his work how the psychological stress of the pandemic plays a double whammy on older people who are vulnerable.

First, he said, it isolates them from regular contact with people who might raise red flags, like church friends. Second, the isolation can become a stress of its own, possibly muddling a person’s decision-making abilities when someone comes asking for money, while also making people yearn for connection.

“And they don’t know how to deal with it, and in many times they can’t, they’ve lost cognitive ability,” he said.

For some families, he stressed, the helping hand of a relative can work out well. For troubled ones, though, it can lead to draining the the life savings of someone who has nothing else to live on.

Lewis, the attorney, said that of the cases she knows, they’re reported so late in the game that “maybe 15% of the time” was there anything left to recover for the elder person.

“One important way to minimize the risk of this happening is knowing common characteristics of perpetrators,” she said. “And having a substance abuse problem is way up on the list. Because people need something to feed their habit.”

And “during a pandemic,” Lewis added, “people turn to booze or pot for their stress.”

When the story of fraud and abuse in the pandemic is finally known, “I think it will be easier for the perpetrators to get away with it,” Lewis said. “And the dollar amounts will probably be higher.”

As for Frazier, he is trying to figure out if there’s a way to ensure his client’s best interests still get served. “The bad news is, this stuff happens,” he said. “We usually get to people after the damage is done.”

POSSIBLE SIGNS OF FINANCIAL ABUSE

  • New “person of trust” isolates the victim
  • Change in status: used to save every penny, now they are withdrawing money every week
  • They appoint someone new to handle their affairs
  • Missing jewelry
  • Quick deeds, of family property or businesses

WHERE TO REPORT IN GEORGIA

If abuse happens in a private home or in the community:

If abuse happens in a long-term care facility, nursing home, or personal care home:

 
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Appellate court upholds former attorney’s disbarment


by Mark Reagan

The 13th Court of Appeals has affirmed a former Hidalgo County attorney’s disbarment.

The appellate court issued the ruling on Wednesday in an 89-page memorandum of opinion on remand.

The Commission for Lawyer Discipline took Mark A. Cantu to trial in 2016 alleging he committed professional misconduct during bankruptcy proceedings that also involved his wife, Roxanne Cantu, and a company they owned and controlled called Mar-Rox.

In a 10-2 decision, the jury decided Cantu violated the Texas Disciplinary Rules of Professional Conduct during those proceedings by making false statements; taking a position that unreasonably increased the costs or other burdens of the case; and knowingly offered or used false evidence, among other violations including dishonesty, fraud, deceit and misrepresentation, according to the ruling.

In 2018, Cantu had secured a victory in the 13th Court of Appeals that reinstated him and granted him a new trial after the appellate court ruled that “erroneous” testimony had been allowed during his ethics trial.

The Texas Supreme Court, however, reversed that ruling after deciding that neither the admission of the judge’s testimony nor the admission into evidence of the judge’s memorandum opinion constituted reversible error.

“The supreme court remanded the case to this Court to consider Cantu’s remaining issues,” the most recent ruling states.

Those issues were numerous and include challenges to the admission of expert testimony, the jury charge, jury deliberations, the legal and factual sufficiency of the evidence, the propriety of sanctions based on actions he took in his individual rather than professional capacity, the trial court’s findings of fact and conclusions of law, and the award of attorney fees.

The 13th Court of Appeals ruled against each and every one.

“We affirm Cantu’s judgment of disbarment,” the ruling states.

Cantu, his wife and Mar-Rox, their company, filed for voluntary bankruptcy on May 6, 2008, which was converted to a Chapter 7 liquidation on June 24, 2009, and a trustee was appointed to administer the estate.

“At the time of the voluntary bankruptcy filing, the Cantus owned University Inn [M]otel, Palm Plaza Motel and RV Park, La Vista Mobile Home Park, and Dominion Apartments. They owned Mar-Rox, Inc., through which they owned The Atrium, an office building in McAllen, four restaurants, and several other commercial properties for real estate holdings valued at about $24 million,” the ruling states.

Personal property owned by the Cantus in their bankruptcy schedules was valued at $3.9 million, according to court records.

“Mr. Cantu owned a successful law practice. At the time of the voluntary bankruptcy filing, the Cantus had more than $37 million in secured debt and more than $10 million in unsecured debt. Their company, Mar-Rox Inc., had more than $20 million in debt,” the ruling states.

As part of those proceedings, Cantu was required to make statements of his financial affairs under the penalty of perjury and the Commission for Lawyer Discipline alleged he failed to include significant assets and transactions.

“Respondent failed to disclose Respondent’s interests in two contingency fee cases, failed to disclose jewelry sales of more than $100,000.00 and failed to schedule two life-sized bronze horses worth about $20,000.00. The horses were placed on property belonging to Respondent Cantu’s sister in an apparent attempt to conceal them,” the ruling states.

He also failed to disclose a transfer of $50,000 to a friend, which was part of a $150,000 settlement as part of a bankruptcy court claim.

“Cantu was not honest with the Court regarding how that money was spent,” the ruling states.

The court also found Cantu failed to provide records of his use of estate funds, records of cash withdrawals from the estates, including withdrawals of cash from the businesses University Inn and La Vista, which was a violation of bankruptcy court orders regarding cash collateral.

“Cantu interfered with the sale of estate assets and failed to turn over assets belonging to the estate. He [interfered] with the sale of the Atrium building, he interfered with the turnover of valuable artwork from his offices, [and] he attempted to hide the horse statues,” the ruling states.

The commission says he made material false oaths regarding the existence of water damage cases in which Mar-Rox had an interest, the  existence of contingency fee interests, jewelry sales and the transfer of $50,000 to his friend.

“Throughout the bankruptcy proceeding, Respondent Cantu disregarded the requirements of the bankruptcy code and demonstrated a pattern of omission, obfuscation and non-compliance in violation of his obligations to the court. This pattern of behavior obstructed the administration of the bankruptcy estate and the [c]ourt, increased the expense and inconvenience for the trustee, the estate and the court and otherwise interfered and complicated the bankruptcy case . . . and its administration,” the ruling states.

 
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Long-Term Care Medicaid visitation changes


By Jacob Notermann

BISMARCK, N.D. (KFYR) - The Centers for Medicare and Medicaid Services have doubled the number of days Medicaid residents in skilled nursing homes can visit their families.

Days before the holiday season, residents can now live with their families for 48 days this year. North Dakota, like many other states, requested the expansion after getting calls from families.

Visitation in long-term care has been a regular point of contention as we get closer to the holidays.

Families want to see their loved ones, but the facilities and the federal organizations that oversee them are trying to prevent the spread. For the remainder of 2020, residents can stay with their families for an additional 24 days.

The reason there’s a cap in the first place is so residents can save their spots in the facilities and for the organizations to maintain federal funding.

The Department of Human Services says those interested should talk to their loved one and discuss the pros and cons. Adding it’s all about giving people choices.

“This isn’t about the flexibility that all residents would take up or should take up. But it really is about giving people the option about whether or not they want to bring their loved one home,” said ND Medicaid Director Caprice Knapp.

For those who leave the nursing home, the CMS asks you limit contact with people and shared items, be cautions with food serving practices, and be on the lookout for COVID-19 symptoms.

DHS is warning residents may have to quarantine for up to 14 days upon returning to their skilled nursing facility, even if a rapid test says they are negative earlier.

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Monday, December 7, 2020

A prosecutor and police chief were adored in their community. Then their scheme unraveled.

Retired Honolulu police chief Louis Kealoha and his then-wife, Katherine, leave federal court in Honolulu on Oct. 20, 2017. (Caleb Jones/AP)

By Kim Bellware

What’s described as the biggest corruption case in Hawaii’s history started with a stolen mailbox and unspooled into a seven-year legal saga that concluded Monday with a once-esteemed Honolulu power couple handed 13 and seven-year prison sentences for conspiracy, bank fraud and other charges.

For federal public defender Alexander Silvert, who has since retired, it began in 2013 with a low-level crime and a familiar plea. Gerard Puana, accused of stealing his niece’s mailbox, insisted he was being framed.

Silvert was appointed to the case, which he quickly sized up as a loser: Puana’s accusers were his popular and powerful niece, Katherine Kealoha, the third-ranking boss in the Honolulu prosecutor’s office, and her husband, Louis, the Honolulu police chief.

They claimed to have Puana on video committing the crime.

“I took the case assuming he was guilty but that I could help him avoid being over-sentenced,” Silvert told The Washington Post. Still, he found the case unusual from the start. “In my entire career, I’ve never heard of a charge of a mailbox theft going to federal court.”

Silvert, and later federal investigators, would reveal how the Kealohas leveraged their powerful roles in law enforcement to frame Puana and cover up an array of schemes that fueled a lavish lifestyle at the expense of those who trusted them most.

Among the victims was Florence Puana, Katherine’s 100-year-old grandmother; Puana lost her home of 58 years after Katherine pocketed the money from a reverse mortgage plot. Before Florence died in February, she wrote a letter to Katherine that was read in court during sentencing Monday.

“I trusted you,” Florence wrote her granddaughter. “Yet you betrayed me.”

Reversing the flow

Katherine Kealoha oversaw investments for those in her orbit, including her uncle and grandmother. She was even put in charge of the trust funds for the surviving 10- and 12-year-old children of a family friend who died. But under her control, the money never grew — it disappeared.

Court records show the Kealohas’ expenses included Maserati and Mercedes car payments, a trip to Disneyland and $2,000 concert tickets to see Elton John. In 2009, Katherine racked up a $23,976 brunch tab at the Sheraton Waikiki to fete Louis after he was appointed police chief.

To conceal the fraud, Katherine invented a notary and faked witness signatures on financial documents; she filed bogus identity-theft claims to deflect negative questions about the couple’s credit history; she had statements for the reverse mortgage diverted to a P.O. box that only she could access.

The Puanas learned of the fraud only because of an administrative error: When the mortgage debt was sold to a new company several years on, the new statements were mistakenly sent to the property address instead of the P.O. box.

Florence Puana, by then in her 90s, realized that Katherine hadn’t paid off any of the outstanding balance as promised and that she was about to lose her home. Alleging elder and financial abuse, the Puanas filed a lawsuit against Katherine.

Watch your back

Initially, the lawsuit against the Kealohas didn’t raise eyebrows in the community, where there was little appetite for seeing a prominent native Hawaiian couple disgraced.

“The community adored them — and they were very powerful people,” said Lynn Kawano, a reporter and anchor for KGMB/KHNL Hawaii News Now. “Not just because of their titles, but because of their family. Your family name goes a long way here.”

Kawano, a Hawaii native, told The Post that she faced pushback in the early days of covering the case. Some encouraged her to drop the story altogether and told her and her husband to “watch their backs.”

By 2016, two years after the mailbox arrest, the corruption allegations were gaining traction, but the community still clung to doubts.

“People told me, ‘No way is this about a mailbox,' ” Kawano said. The couple’s supporters found ways to rationalize how even top-ranking public employees could afford luxury cars, Rolex watches and a home in the tony suburb of Kahala, considered the “Beverly Hills of Honolulu.”

A wealthy local lawyer who estimated his income as being three times that of the Kealohas, encouraged Kawano to keep digging, she recalls. “He told me, 'I can’t even afford to live in that neighborhood.’ ”

Attention from Honolulu police

Facing pressure from the lawsuit, the Kealohas devised a countermeasure to intimidate and discredit Katherine’s uncle, Silvert said.

The couple told police that Gerard Puana stole their mailbox, worth $380 — a value that would bump petty theft to a felony charge. Tying in the U.S. mail would make it a federal case, while their surveillance video (which would later be revealed as doctored) would easily lock a conviction against him.

A felony conviction might silence Puana, or at least provide ammunition to weaken and discredit him as a witness in the civil trial, Silvert said.

But the plan started to fall apart under basic fact-checking. The suspect in the grainy surveillance footage looked younger and smaller than Puana. Appraisers and investigators found the Kealohas had lied about the type of mailbox they owned and falsely claimed one of higher value in an apparent effort to crack the $300 threshold for felony theft charges.

Silvert combed through old photos from Google Maps to prove that the mailbox that was stolen in the setup was a different brand entirely — and cost less than $200. Plus, he couldn’t square why that crime would attract so much attention from Honolulu police.

“There was a homicide detective assigned to investigate a petty mailbox theft,” Silvert said. Eventually, he was able to prove that every police report — from the Kealohas’ initial 911 call to logs the assigned officers kept — had been falsified.

‘Rue the day’

At Puana’s theft trial in 2014, the U.S. attorneys in Honolulu planned to cast him as an embittered schemer in contrast to the Kealohas’ status as pillars of the community. To undercut that narrative, Silvert opened with what he calls the “rue the day letter.”

“HOW DARE ANYONE make such MALICIOUS and FALSE STATEMENTS against me!” read a letter Katherine wrote in response to her grandmother’s lawsuit. “They will rue the day that they decided to state these TWISTED LIES!”

“We were well-prepared for trial thinking we could convince the jury,” Silvert said. But in the second hour of the trial, the unthinkable happened.

On the stand, Louis, the police chief, introduced prohibited testimony, which caused a mistrial. Silvert and other observers believe it was done on purpose.

“The chief has a master’s degree in criminal justice and years of experience. He trains rookie cops on how to testify,” Silvert said.

Kawano, the reporter, was sitting behind Silvert in the courtroom and recalled how the federal public defender “threw his arms up and slammed both fists on the table.”

Silvert remembers it the same way. Furious, he soon made the unusual move to reach out to the opposition — the FBI. He hoped that if Puana’s case didn’t get retried, federal investigators could still expose the Kealohas.

“When you meet with the FBI, who I cross-examine and call liars all the time, you can imagine it was a very difficult meeting,” Silvert said. But the investigation eventually gained traction.

Honolulu’s U.S. attorney’s office recused itself, having prosecuted Puana’s case. Federal prosecutors from the Southern District of California stepped in and spent five years investigating before securing convictions and guilty pleas from the Kealohas last year, along with conspiracy and obstruction convictions against two former police officers in the Honolulu Police Department’s Criminal Intelligence Unit acting at Louis’s behest; both were sentenced to prison.

The Kealohas’ unraveling has been met with sadness and anger. Kawano said it was a blow to Honolulu’s Hawaiian community but also a hit to the taxpayers, who will shoulder the “millions” in city and county settlements to the couple’s victims. Together, they are also liable for at least a combined $455,000 in restitution to victims.

“There’s a lot of anger now — how could this have happened? Why was there no oversight?” she said.

Michael Wheat, the special prosecutor from the California U.S. attorney’s office, said the Kealohas’ situation was unique.

“I don’t think you’d see again where the police department and the prosecutor’s office is literally the same family,” he told The Post.

The Kealohas are no longer the family they once were, with some members now estranged — including Katherine and Louis. After their 2019 convictions, Louis filed for divorce.

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Western Cape lawyer spared prison garb after pleading guilty to theft

Western Cape lawyer Terrence Mouton was convicted in the George magistrate's court on December 3 2020 for stealing R275,000.

by Philani Nombembe

Western Cape lawyer Terrence Mouton will split his time between legal work and community service for the next five years after being convicted of theft this week.

The George magistrate's court sentenced the 40-year-old lawyer on Thursday. Mouton, who was arrested in October, misappropriated R275,000 from his law firm’s trust account.

“Mouton, attached to TJ Mouton Attorneys, received R275,209.99 into his trust account for the purchase of fixed property from his client on June 24 2015. The funds were not paid towards purchasing the property but were instead misappropriated,” said Hawks spokesperson Zinzi Hani.

Mouton pleaded guilty and the court sentenced him to five years' imprisonment which was wholly suspended for five years. But stringent conditions were attached.

“[The] magistrate ordered Mouton to pay at least R55,041.99 [or more] to the Attorneys Fidelity Fund per year until the debt is paid in full,” said Hani.

“Furthermore, Mouton should do 16 hours of community service per month for the entire duration of the sentence and also was declared unfit to possess a firearm.”

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Tom Girardi and reality star wife sued for alleged theft of Lion Air settlement funds

by Alison Frankel
 
(Reuters) - Famed plaintiffs’ lawyer Tom Girardi of Girardi Keese and his reality star wife, Erika Jayne Girardi of “The Real Housewives of Beverly Hills,” were accused in a suit filed Wednesday in federal court in Chicago of misappropriating settlement funds that belong to victims of the Lion Air crash in order to fund their “outrageous lifestyles … in the glitz-and-glam world of Hollywood and Beverly Hills.”

The suit alleges that instead of paying clients the settlement money his firm received from Boeing in the spring of 2020, Tom Girardi “resorted to embezzling the proceeds” to avert “a downward spiral of mounting debts and dwindling funds.”

The complaint was filed by and on behalf of the law firm Edelson, which acted as local counsel to Girardi Keese in lawsuits stemming from the 2018 Lion Air crash. Edelson said it became aware in the summer and fall of 2020, in a series of conversations with Tom Girardi and other lawyers at his firm, that Girardi Keese had not made full payments to clients whose cases Boeing had agreed to settle, even though Boeing had allegedly transferred settlement funds to Girardi.

Instead, according to the complaint, Girardi appears to have entered into agreements to redirect money received by Girardi Keese to the law firm’s creditors, including litigation funders from which Girardi borrowed millions of dollars. The suit names some Girardi creditors as defendants, alleging that they “knowingly demanded and received embezzled funds belonging to the Lion Air clients.”

Girardi did not respond to phone and email messages requesting comment on the suit. Erika Jayne Girardi’s publicist did not respond to an email.

The litigation funder California Attorney Lending, which is a co-defendant in the Edelson suit, denied receiving money that belongs to Girardi Keese clients. William Savino of Woods Oviatt Gilman, who represents the funder, said his client was “shocked” that Edelson attacked its good name. “We are very careful that no money comes from victims,” he said. “Every penny received by California Attorney Lending is money to which it was entitled.”

The Edelson complaint said that Girardi’s alleged embezzlement includes money due to Edelson for serving as local counsel to Lion Air plaintiffs who sued Boeing in Chicago federal court. Edelson said, however, that it will not accept its fees until clients have received their settlement funds.

Erika Girardi announced earlier this month that she and Tom Girardi are divorcing after 21 years of marriage. The new Edelson complaint alleges that the purported divorce is “a sham attempt” to shield the couple’s money from Girardi Keese creditors.

The suit seeks an accounting of all the money Boeing has transferred to Girardi Keese. That money, according to Edelson, must either be disbursed to Lion Air clients and Edelson or placed in a constructive trust. The complaint also asserts unjust enrichment, breach of contract, tortious interference with contract and conversion.

The case is Edelson v. Girardi, Docket No. 1:20-cv-07115 in the Northern District of Illinois.

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