They lost everything. New measure would prohibit nursing homes from preying on residents.

Peter Bonanno (l.) and Suzanne Araneo, who both signed a durable power of attorney that handed full control of their savings, money and assets to a man they never met.Photo of Bonanno courtesy of Lauren Irwin-Szostak/Araneo photo by Patti Sapone | NJ. Advance Media for NJ.com

By Ted Sherman

What happened to them was “just awful,” said state Sen. Joseph Vitale.

One woman said she returned to her home in Keyport from what she expected would be a brief period of rehabilitation in a Hazlet nursing home, only to find it emptied of everything. Her bank accounts had been cleaned out. Her car was gone. What had not been sold off had been tossed in a dumpster.

She had not been burglarized. It was all taken away by someone working on behalf of the long-term care facility that had been caring for her, after she was encouraged to sign a power of attorney giving him full authority over her assets and finances.

The same fiscal agent moved tens of thousands of dollars out of the joint savings held by another nursing home resident with his sister, causing her to default on the property taxes for the small house they once shared, according to documents sent to prosecutors who have yet to take any action. That resident had also signed away control of whatever he had, including his pension, through a power of attorney.

On Monday in the wake of those stories brought to light by NJ Advance Media, Vitale — who serves as chairman of the Senate Health, Human Services and Senior Citizens Committee — introduced legislation in Trenton that would set restrictions on the ability of nursing homes to manage the financial affairs of their residents.

“There has to be some sort of mechanism so that when somebody needs help, we’re not going to drain their bank accounts,” said Vitale, the Middlesex Democrat who has long pushed for reforms to protect residents in the state’s nursing homes.

Under the legislation, co-sponsored by Sen. Robert Singer, R-Ocean, no owner, administrator, officer or employee of a nursing home — or any entity affiliated with a long-term care facility — would be permitted to manage the affairs of a nursing home resident absent a court order appointing that individual as a guardian. A companion measure was introduced in the lower house by Assemblyman Herb Conaway Jr., D-Burlington.

Specifically, the bill, S-3606 in the Senate and A-5194 in the Assembly, would prohibit anyone associated with a nursing home from managing the affairs of a resident “except pursuant to an order of the Superior Court appointing that person as guardian.”

At the same time, the legislation would prohibit nursing home owners or their employees, from acting under a power of attorney on behalf of a resident, as was alleged in the cases that were the focus of the NJ Advance Media investigation into Future Care Consultants, a Brooklyn-based company that provides financial services to the long-term care industry, and its CEO, Shmuel “Sam” Stern.

“There’s clearly a policy that enables this kind of behavior,” said Vitale. “We’re going to fix that.”

State Sen. Joseph Vitale, D-Middlesex, who introduced legislation on Monday that would set restrictions on the ability of nursing homes to manage the financial affairs of their residents.Michael Mancuso | NJ Advance Med

The accounts of those alleged abuses included the nightmare that Suzanne Araneo recounted after signing a power of attorney while under heavy medication. The document gave Stern — who has ties to a number of New Jersey nursing homes, federal records show — the authority to sell, transfer or dispose of her assets, according to a lawsuit still being litigated.

Araneo later returned home to find her home completely emptied of all its possessions, including her family photo albums, her televisions, her furniture and all her clothing. All of it was either sold off or thrown in a dumpster while preparations were made to sell her house, she said. Even her car was taken away.

Two days after her story appeared on NJ.com in August, inspectors from the New Jersey Department of Health went to the nursing home where she had been living to inquire into the matter, according to documents filed by the agency. It cited the facility for alleged deficiencies in connection with the incident.

In a similar episode, authorities were alerted to the tug-of-war over Peter Bonanno’s assets after he was admitted to a Passaic County nursing home in early 2019. Not long after arriving there, legal documents show that with his sister already holding control over his assets, Bonanno signed a new power of attorney handing that control over to Stern.

Attorney David Fassett of Arseneault & Fassett in Chatham, who was working on behalf of a close friend of Bonanno, alerted the Passaic County Prosecutor’s office that Stern allegedly soon liquidated four bank accounts that the then-67-year-old man held jointly with his sister, moving their money into the nursing home’s accounts. The facility then billed him at a higher private pay rate rather than the less-profitable Medicaid rate as a result of the joint funds to which it had no claim, the attorney noted to prosecutors

Bonanno’s sister would not learn their savings was gone until bouncing numerous checks and defaulting on their health insurance premiums and property taxes, the attorney told prosecutors, who did not respond to requests for comment.

Stern has not responded to requests for comment, although his lawyer said of Araneo’s case that “there’s a lot of stuff out there that really does not fit the facts as she alleges them at this time.” He characterized the complaint regarding Bonanno and Future Care as an issue that had been “part of a collection process.”

Nursing home administrators in both matters have not returned calls or emails seeking comment.

Vitale’s bill would invalidate any power of attorney executed by a nursing home resident naming an owner, administrator, officer, or employee of that facility — as well as any entity affiliated with the nursing home that stood to benefit financially from that relationship.

The legislation would require the appointment of a guardian in consultation with the state’s Office of the Public Guardian for Elderly Adults, meanwhile, setting new protections in place.

Guardianships, which require a court’s review and approval, typically are invoked to protect those incapable or incompetent to handle their affairs. A judge must make the call whether it is in the best interest of an individual.

In the cases of Bonanno and Araneo, however, there was no such determination. Instead, they allegedly signed away their rights to Stern under a power of attorney, with no one to question whether someone else should be handling their affairs. Legal experts say the assumption is that anyone signing a power of attorney is competent to make that decision.

The two each put signatures on legal agreements that were simply witnessed by members of the nursing home staff, giving Stern complete control over the disposition of their assets, their lawyers said. They added that neither ever met Stern.

State inspectors, meanwhile, found that Araneo’s signature on the power of attorney documents was notarized by someone who was not in the room when she signed it, nursing home administrators told them, according to a health department report.

“This legislation is designed to protect the assets and well being of unsuspecting residents from unscrupulous or criminal activity,” said Vitale.

Araneo’s attorney, Deborah Gough of Hackensack, applauded Vitale’s proposed legislation.

“Every day, nursing home residents who are incapable of caring for themselves are being financially victimized by predatory nursing homes and the companies with whom they associate. These practices will not stop without oversight from the justice system,” she said. “The laws proposed, if enacted, are our best hope to safeguard our most vulnerable citizens and punish bad acting nursing homes when they break the law with abusive conduct.”

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They lost everything. New measure would prohibit nursing homes from preying on residents.