ProPublica reporter Jake Pearson joined “The Rush Hour” to discuss the investigation. (Spectrum News NY1)
By Rocco Vertuccio
ProPublica reporter Jake Pearson has been
investigating the city’s broken guardianship system, spotlighting how
weak oversight has allowed legal guardians to abuse, neglect, and
defraud the people they’re supposed to take care of.
Pearson’s latest investigation examines how judges allowed one of New
York’s guardians to transfer over $1.5 million of her ward’s money to
her own business — profiting from the people she’s supposed to care for.
Jake Pearson joined “The Rush Hour” on Thursday to discuss the investigation.
After an audit from Miami-Dade County’s Office of the Inspector
General (OIG) found employees of the Guardianship Program of Dade County
violated state laws, the county mayor wants new oversight and
accountability before the program gets more taxpayer dollars.
Mayor
Daniella Levine Cava has called on the courts to set new safeguards on a
system that is intended to look after some of the most vulnerable
members of the community, following the findings that were prompted by a
WLRN investigation.
In
a recent memo to Chief Judge of the 11th Circuit, Nushin Sayfie, and
Miami-Dade County Clerk of Courts Juan Fernandez-Barquin, Levine Cava
called for a meeting to review key aspects of the county's guardianship
system.
“Per state statute, the Eleventh Judicial Circuit of
Florida, Probate Division works with the Clerk of Court and Comptroller
to ensure the proper functioning and oversight of guardianship cases,”
Levine Cava wrote in the Aug. 2 memo.
“We would like to meet with
you to discuss next steps your offices can take, including review of
current staffing and leadership as well as the introduction of
additional safeguards into any potential future grant agreements.”
The
Guardianship Program (GPDC) is a nonprofit entity that receives
millions of dollars in annual funding from Miami-Dade County and the
Florida Department of Elder Affairs. They’re the guardians of last
resort for people declared “incapacitated” by the courts and who have no
family who can take care of them.
The program handles about 20%
of the county’s guardianship cases, which are administered through the
11th Circuit’s Probate Division.
A WLRN investigation found the
program repeatedly sold the properties of its incapacitated wards to a
small group of people who then quickly sold them for a profit. The
practice raised questions about whether the program was doing its best
to care for the vulnerable people in its charge.
An OIG audit late
last month corroborated those findings. It also found Guardianship
Program employees engaged in conflicts of interest that violated state
law, and that the program had a severe lack of oversight of its property
sales that challenged its commitment to doing the most to take care of
its wards.
"We are reaching out to meet with your office to
discuss how we can support the implementation of additional
accountability and oversight measures over the Guardianship Program."
Miami-Dade County Mayor Daniella Levine Cava in a memo to 11th Circuit Court officials.
In some cases, property coordinators helped their friends and
families buy homes that belonged to incapacitated people, and a realtor
received almost five times much money as an incapacitated ward after
selling the ward's home for GDPC.
While Miami-Dade County
partially funds the Guardianship Program with a more than $2.5 million
annual grant, it has little control over the nonprofit’s operations.
“The
County is required to serve as a pass-through for state funding but
does not directly oversee the program or provide any management or audit
function,” Levine Cava wrote in her recent memo.
Judge 'hopes to see changes'
WLRN
reached out to Judge Sayfie following the release of the OIG audit to
ask if the court would take any action in response to the findings.
Sayfie said in an emailed statement that she hopes to see the
Guardianship Program enact changes, but stopped short of saying what
shifts the court might make.
“We are looking forward to seeing the changes outlined in the
Inspector General’s report for the benefit of strengthening public
guardianship and its important role in service to a very vulnerable
community,” Sayfie said.
Levine Cava’s memo, however, seems to put the onus on Sayfie and the court to set up their own safeguards on guardianship cases.
"We
are reaching out to meet with your office to discuss how we can support
the implementation of additional accountability and oversight measures
over the Guardianship Program," the mayor wrote.
Emma Louise Ladson,
whose mother was an incapacitated ward and who was evicted from her
home by the Guardianship Program, said the audit report was a relief
after years of calling out abuses in the guardianship system.
“It
feels like vindication. It’s just been happening for so long to too many
people. I’m happy that Mayor Levine Cava has taken notice and has not
let this case go,” Ladson told WLRN.
The Mayor’s office said she has not yet scheduled a meeting with the
Chief Judge and the Clerk of Courts at the time of this writing.
An elderly woman was robbed of more than $1 million after being targeted
as part of "a complex identity theft and fraud scheme," according to
the Harford County Sheriff's Office.
by Zak Failla
Devalkumar Harshadkumar Vyas and wife Mamata D. Vyas - who were arrested
for a similar scheme in New York last month - preyed on a 73-year-old
woman who was convinced to make bitcoin and gold purchases that they
then took over the course of a five-week period.
In June, investigators say that the woman received an unsolicited
email from erickressman@tuta.io, purportedly from Eric Kressman of the
Office of the Inspector General claiming that she was the target of
identity theft.
Shortly thereafter, the victim received an unsolicited call from a
person identifying himself as "Willy Le," an employee of the Social
Security Administration.
"Le" was able to provide the woman with
detailed information about her bank accounts, and advised that she had
to transfer it to him for safekeeping, imploring her to keep the entire
situation confidential.
After that call, a spokesperson for the
sheriff's office said that she made multiple transactions over five
weeks, including deposits into a bitcoin machine and purchases of gold.
She met with the suspects on five different occasions to hand over
the gold and cash, resulting in a total loss of over a million dollars.
During
the investigation, it was determined the suspects were driving a silver
Chevrolet Equinox that was registered to Devalkumar Harshadkumar Vyas.
Further
investigation found that Vyas and his wife were involved in a similar
crime in New York state. Both husband and wife were arrested on
Wednesday, July 10, by the New York State Police and charged there.
Late last month, Devalkumar Vyas was interviewed by members of the
Harford County Sheriff's Office, where he admitted to his role in the
fraud scheme in Maryland.
Now, detectives are concerned there may be other victims of the couple who have not yet come forward.
While an arrest has been made, the sheriff’s office is continuing their investigation, they added.
Anyone who may have been victimized in a similar scheme has been asked to contact investigators by calling (410) 836-5428.
PITTSBURGH (KDKA) — A Fayette County family is waiting for answers
after their home health aide was caught on camera snooping through their
things.
That aide is under investigation by her employer, Caring
Mission Home Care, after videos show her with a flashlight apparently
going through the family's things while she was supposed to be caring
for her hospice patient.
"It went on for hours," said Terry
Christopher, the patient's daughter. "She would pace around the kitchen
looking at different things in my home. And then she started going
through my cabinets, my drawers."
Christopher said her father,
Roger Porter, was approved by the VA for 40 hours a week of home health
care after going to hospice. That is when the family hired the home
health aide, who started on July 29, to care for her father overnight.
KDKA-TV blurred her face and has chosen not to release her identity as charges have yet to be filed.
"When she got here initially, I told her I have a camera,"
Christopher said. "They record all the time. There's one right here in
the kitchen, which I showed her, and then I showed her the one in his
room also."
While Christopher and Porter were sleeping, she said
her cameras caught the aide going through their things on her first
night on the job.
"In the video, you can hear a knock something
over and then she looks to see if she woke him up. And she did not. So,
she continued to search," Christopher said.
The family said they feel violated and believe the aide should no longer have a job in home health.
"I don't want anyone else to have to go through this," Christopher
said. "I don't want anyone to have to feel violated like I feel."
Caring Mission Home Care released a statement and said it has seen the videos and is concerned about the circumstances.
"Caring
Mission Home Care is currently investigating the incident. It's a
personnel issue and we cannot discuss that publicly at this time," the
statement said, in part.
A skilled nursing facility in California is facing
serious allegations of elder abuse and negligence after a resident
suffered severe injuries due to inadequate care. The complaint was filed
by Virginia Estrada, through her successor in interest, Ester Baldwin,
against O'Connor Woods Housing Corporation and Eskaton Properties, Inc.,
on July 24, 2024, in the Superior Court of California, County of
Sacramento.
According to the complaint, Virginia Estrada was admitted to
Meadowood A Health & Rehabilitation Center on May 12, 2023. She
required extensive assistance with daily activities due to chronic Type
II diabetes mellitus. Despite knowing her medical needs, the defendants
allegedly failed to provide adequate care. Estrada's condition
deteriorated significantly during her stay at the facility from May 12
to May 16, 2023. On May 16, she was found unresponsive with low blood
sugar levels and improperly administered oxygen.
The lawsuit details multiple instances where the facility's staff
neglected Estrada's needs. For example, a licensed nurse gave her orange
juice instead of the physician-ordered glucagon gel for low blood sugar
and failed to notify her physician or recheck her blood sugar levels
every 15 minutes as required. The California Public Health Department
investigated these incidents and issued deficiencies against the
facility for failing to meet professional standards of care.
Estrada's complaint accuses the defendants of understaffing and
underfunding the facility to maximize profits at the expense of
residents' health and safety. It alleges that this neglect led directly
to Estrada's severe injuries and emotional trauma. The plaintiffs seek
general and special damages, punitive damages for elder abuse claims,
attorneys' fees, treble damages under applicable laws, and other relief
deemed appropriate by the court.
The case is being handled by Stephen M. Garcia of Garcia &
Artigliere law firm. The presiding judge is yet to be named under Case
No. 24003014737.
LANSING – Michigan Attorney General Dana Nessel today announced the recent appointment of Theresa J. Cypher (JPG) as Van Buren County Public Administrator.
“Theresa brings a wealth of experience to this role,” Nessel said.
“Her extensive background in estate administration and her commitment to
the community make her an excellent choice to be Van Buren County
Public Administrator.”
County public administrators have powers and duties primarily related
to intestate decedent estates where there are apparently no known
heirs, including managing the determination, collection, liquidation,
and/or distribution of any assets in the estate. Attorneys who serve in
this capacity often also have private practice responsibilities that
are separate and unrelated to their appointment as a county public
administrator.
“County public administrators serve in a position of trust in
Michigan’s Probate Court system and perform vital work on behalf of
their respective communities,” said State Public Administrator Randi M.
Merchant. “The Department is fortunate to have a talented and passionate
pool of attorneys that serve in this role across the State, and I am
pleased to welcome County Public Administrator Cypher as the newest
member of that team.”
Cypher is a graduate with honors from Chicago-Kent College of Law,
Illinois Institute of Technology and has been in private practice since
1999. She currently practices at Laaksonen Law Offices, P.C., in Paw
Paw, specializing in estate planning, estate administration,
conservatorship and guardianship matters, family law, and juvenile court
matters. She is also a volunteer with the Diocese of Kalamazoo,
assisting with their Safe Environment Program and the Catholic
Foundation of Southwestern Michigan. Cypher was sworn in on July 31st,
2024.
Katina Soltis, 54, must also serve three days in the county jail and
write a letter of apology to Probate Court Judge Robert Rusu as part of
her sentence.
Soltis pleaded guilty May 28 before Judge R. Scott Krichbaum to two counts of tampering with evidence, a third-degree felony.
Prosecutors say she forged documents
in Mahoning County Probate Court indicating that she deposited $32,000,
which had been willed to her children by a relative, but investigators
say she kept the money for herself.
HARRISBURG – The Superior Court of Pennsylvania has
vacated a ruling from the Delaware County Court of Common Pleas Orphans’
Court, and in so doing, also vacated the guardian ad litem (GAL)
appointment for an incapacitated elderly woman subject to that
“unauthorized” arrangement for more than three years.
Superior Court judges Victor P. Stabile, Deborah A. Kunselman and
Correale F. Stevens issued a memorandum opinion to that effect on July
22, with Stabile authoring the Court’s opinion in this matter.
Stabile began by pointing to the trial court’s recitation of the facts of the case.
“This matter stems from an emergency petition filed by the Delaware
County Office of Services for the Aging (COSA) on Aug. 31, 2020
requesting Appellant J.L.C. be adjudged an incapacitated person and
requesting the appointment of a Guardian of her Person and Estate. On
Sept. 1, 2020, the Orphans’ Court held an emergency hearing in which
Appellant appeared with counsel. The court subsequently issued a decree
appointing Elizabeth Stefanide, Esquire, as GAL for Appellant,” Stabile
said.
“In its petition, COSA averred that Appellant was 80 years of age
at the time and that she lacked capacity to make and/or properly
communicate decisions concerning her Person and/or Estate. According to
the petition, Appellant has two children, her daughter, J.F., and her
son, J.J.C. Her assets include 13 residential/business properties, in
addition to J&M Discount Tires, the values of which were listed
‘TBD.’ Appellant receives $1,170 per month in social security and $8,000
per month from Bryn Mawr Trust. COSA averred that Appellant resides in
her home located…in Delaware County, Pennsylvania.”
Stabile added that COSA had initially been contacted regarding
Appellant J.L.C. being a potential target for financial exploitation,
allegedly by her own daughter, J.F.
“Up until 2017, both Appellant’s son and daughter were named as her
power of attorney. More recently, on Aug. 2, 2020, Appellant’s
daughter, J.F., took Appellant to a new attorney to sign paperwork
designating herself solely as power of attorney. J.F. took money from
her account to pay the lawyer then executed the new power of attorney
document and a new will. At the time, J.F. was questioning her brother
J.J.C.’s management of the family business and assets, as he is the
president of the family business (J&M Discount Tires) and has
managed all of Appellant’s financial affairs. J.J.C. provided an expert
report, from Appellant’s longtime psychiatrist and a neuropsychological
evaluation performed in 2019, which indicates a level of incapacitation
in Appellant’s decision making,” Stabile stated.
“The psychological assessment…was performed on Aug. 21, 2020.
During the evaluation, Appellant was unable to or had difficulty
recalling the year she graduated, the year she was married, and the
cause of her late husband’s death. When Appellant was asked about power
of attorney, she stated that both her son and daughter have financial
and medical power of attorney. However, it was reported that Appellant
signed a new power of attorney naming solely her daughter as power of
attorney in early August. At the time of the 2020 evaluation, Dr. Moore
was provided with the assessment completed by Dr. Payne on May 8, 2019.
Following the assessment, Dr. Payne concluded that Appellant had
dementia of a mild-approaching-moderate severity, with features of
long-standing psychiatric variability (bipolar history). Dr. Payne
opined that Appellant was partially incapacitated but did have
testamentary capacity regarding financial decision-making, as she had a
good understanding of her current estate plan.”
It was noted Dr. Moore’s report “indicated that Appellant has major
neurocognitive impairment with an impression of vascular dementia” and
opined that “Appellant appears to be incapacitated and is in need of an
emergency guardian, due to the significant amount of money in question
and the family business being involved.”
After a September 2020 hearing and due to “condition of Appellant’s
capacity and the [GAL’s] concerns regarding the execution of the July
8th power of attorney, the Court amended the GAL decree by suspending
the July 8, 2020 power of attorney.”
On Jan. 19, 2023, GAL Elizabeth Stefanide contacted the court via
telephone to relay the difficulty in her ability to access certain
financial documents of Appellant, pursuant to her authority as GAL for
Appellant. Due to said difficulty, a 2nd Amended Decree was issued on
Jan. 24, 2023, clarifying Ms. Stefanide’s duties as GAL.
“Thus, the Orphans’ Court’s findings of fact reveal malfeasance on
the part of Appellant’s daughter, J.F., and significant cognitive
impairment of Appellant. Despite the latter, the Orphans’ Court has yet
to make a finding of incapacity. Appellant, in the lengthy recitation of
facts in her brief, criticizes the alleged malfeasance of J.J.C.,
Appellant’s son, and claims that COSA, the GAL, and the Orphans’ Court
are doing J.J.C.’s bidding. J.J.C. has filed a participant’s brief in
support of the Orphans’ Court’s decree refuting those allegations,”
Stabile said.
“In essence, Appellant is a wealthy, elderly, allegedly
incapacitated person whose children do not get along and have accused
each other of mismanagement of various aspects of Appellant’s finances.
As explained in detail below, we discern no statutory authority for the
decree on appeal. We therefore have no occasion to delve into the
details of Appellant’s children’s squabbles.”
Stabile provided that Appellant J.L.C. argued that the Orphans’
Court “lacked statutory authority to clothe the GAL with sweeping
authority for an apparently unlimited period of time” – a sentiment with
which the Superior Court agreed.
“The Orphans’ Court appointed Stefanide as GAL on an emergency
basis in 2020. Three years later, the Orphans’ Court issued an ‘amended’
decree clarifying and arguably expanding some of the powers of the GAL,
who apparently is still serving on an emergency basis. This matter
commenced with COSA’s petition for a declaration of Appellant’s
incapacity, and the appointment of a guardian of her person and guardian
of her estate. To date, and for reasons not entirely clear from the
record, none of those things has happened. Appellant is still an
allegedly incapacitated person, and she has no guardian of her estate or
her person,” Stabile stated.
“Guardians of the estate and/or person can be appointed, pursuant
to 20 Pa.C.S.A. Section 5511, after a finding, by clear and convincing
evidence, of incapacity. The duties of guardians of the person and
estate are defined in 20 Pa.C.S.A. Section 5521. The decree before us
was not entered pursuant to Section 5511, and the Court did not purport
to follow Section 5521 in defining Stefanide’s duties. Rather, the
Orphans’ Court appointed Stefanide as GAL after an emergency hearing and
gave her powers as defined in the decree above, which appear to overlap
somewhat with the statutory responsibilities of both a guardian of the
estate and a guardian of the person. Stefanide has retained those powers
for more than three years and apparently is set to retain those powers
for an indeterminate time.”
Stabile pointed out that while Appellant J.L.C. is allegedly
incapacitated and the Court found, back in 2020, that irreparable harm
would result absent the appointment of a temporary guardian, “20
Pa.C.S.A. Section 5513 provides that an emergency order may be in effect
for up to 72 hours and may be extended for no more than 20 days from
the expiration of the initial order, [and] there is no authority in
Section 5513 for the amendment, three years later, of an earlier decree
which, if entered pursuant to Section 5513, has long since expired.”
Stabile further referenced Pennsylvania state law which “provides
for the appointment of a guardian of the person or guardian of the
estate of an incapacitated person, after a finding by clear and
convincing evidence that the person is incapacitated…written notice must
be provided to the alleged incapacitated person explaining the rights
the alleged incapacitated person may lose as a result of a declaration
of incompetency.”
According to the Stabile, “nothing in the record indicates that these procedural dictates were followed in this matter.”
“In summary, we agree with Appellant’s argument that no statutory
authority exists to support the decree before us. It appears from the
record that the Orphans’ Court and the parties have, for more than three
years, subjected Appellant to a pseudo guardianship not authorized
under any applicable law,” Stabile said.
“We remind the parties and the Orphans’ Court of this Court’s prior
warning regarding the potential for the pernicious misuse of incapacity
proceedings: ‘[A] statute of this nature places a great power in the
Court. The Court has the power to place total control of a person’s
affairs in the hands of another. This great power creates the
opportunity for great abuse.’ For the foregoing reasons, we vacate the
decree and remand for further proceedings in strict compliance with all
applicable statutory and jurisprudential authority.”
Frank Rizzo III of Rizzo Law in Berwyn, offered a statement on the ruling.
“Fundamental due process rights do not have an expiration date and
it is incumbent on those charged to protect the elderly, whether a local
provider of protective services such as COSA, a Guardian Ad Litem, the
Department of Aging or even the Pennsylvania Attorney General’s Office’s
Elder Protection Unit to ensure these types of wrongs do not occur.
There is no room for error when dealing with the most venerable yet
vulnerable sector of our society,” Rizzo said.
Superior Court of Pennsylvania case 502 EDA 2023
Delaware County Court of Common Pleas Orphans’ Court case 0296-2020-O
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com
A Midland woman was arrested earlier this week after investigators said
she allegedly stole credit cards from her ailing patient and then used
the cards to rack up more than $60,000 in charges even after the victim
died. Crystal Victoria Barela, 35, has been charged with two counts of
Credit/Debit Card Abuse of the Elderly and one count of Fraudulent
Use/Possession of Identifying Information, all third-degree felonies.
unknown cybersecurity hacker stealing information from computer
Older Americans are increasingly being caught up in elaborate scams designed by perpetrators to drain them of their retirement
savings, with the detail and scale of such scams sometimes requiring
the intervention of federal law enforcement. This is according to an investigative report published this week by the The New York Times.
Subjects
of interviews were “ensnared in scams that could be so elaborate it’s
as if they were created in a writer’s room testing different plot
devices,” the report stated. “Scammers can impersonate government
officials, tech support staff or love interests. They coach victims on
how to sidestep fraud prevention measures at financial institutions, and
they use manipulative psychological tactics — isolation, a sense of
urgency or preying on people’s willingness to trust or connect — to keep
the scam going.”
Retired lawyer Barry Heitin, 76, is one of the subjects profiled in
the story. He detailed how he lost an estimated $740,000 in retirement
savings due to the persistent efforts of these bad actors.
Heitin
lost this money over a period of only three months, spending “just about
every weekday doing the legwork and making withdrawals from his bank
accounts as part of an intricate scam,” the report explained. “He
believed he was helping the feds safeguard his money and catch thieves
who were after it.”
Such scammers are present in a variety of
online areas, including dating websites, social media platforms,
messaging apps and through the use of invasive, malicious software —
just to name a few.
“The nature of these schemes makes it nearly
impossible to recover the money, leaving victims with little recourse,”
the report explained. “The stolen funds are often whisked to overseas
accounts or laundered through cryptocurrency wallets, which are quickly
emptied.”
The losses are sometimes exacerbated by taxes.
Withdrawals from retirement accounts — especially in such large amounts —
can often come with a heavy tax bill that the victims have few
resources to cover after being scammed.
“Potential losses from cybercrime exceeded $12.5 billion in 2023, a 22 percent jump from 2022, and more than triple the levels in 2019, according to the FBI’s
Internet Crime Complaint Center,” the report said. “But these figures
underestimate the problem, since many victims don’t report their
losses.”
On top of these challenges, bad actors often single out
victims over the age of 60 due to perceptions of large savings. This age
group suffered the largest losses in 2023, totaling more than $3.4
billion, according to the FBI data cited in the report.
Drivers pass Big Storm Brewing's taproom in Clearwater, a craft beer
business owned by Leo Govoni and his son. Govoni is named in two
separate cases that document more than $100 million missing from trust
funds for the medically needy. A judge recently froze Govoni's bank
accounts and assets at the request of the Florida state attorney's
office. [ CHRIS URSO | Times ]
By Christopher O'Donnell
FEATHER SOUND — Like countless others, David Wenk trusted Leo Govoni.
The oncologist met the financial adviserand his son in 2012 at a Tampa Bay Buccaneers game andended up sharing a 10-year season ticket to a Bucs suite that Govoni boughtthrough one of his companies.
Over
several years, the Govonis pitched Wenk on investing in Big Storm
Brewing, a fast-growing craft beer and spirits company. After seeing
plans for a sleek high-end steakhouse and spirit room in May 2021, Wenk
plunked down $3 million from his personal accounts.
It
was easy to believe Govoni was a savvy businessperson. He flew friends
on his twin-engine private jet to watch the Kentucky Derby from his
executive suite at Churchill Downs. He doled out hundreds of thousands
of dollars in campaign contributionsto politicians.
But within three years, that carefully curated image of success would fall apart.
In February, Govoni was accused in bankruptcy court records of orchestrating a $100 million loan
to his own company from a nonprofit he founded. The money was siphoned
from special-needs trust funds set up to pay medical bills for people
with profound disabilities, records state.
Then in May, a
state court froze Govoni’s bank accounts and assets at the request of
state prosecutors who in a civil complaint accused him and business
associates of stealing more than $2 million from a second trust fund nonprofit.
To
tell this story, the Tampa Bay Times reviewed thousands of pages of
court documents, federal and state records and property deeds. Those
documents and interviews with associates, former employees, neighbors
and politicians show how Govoni lived lavishly for more than a decade
while court documents allege he preyed upon a vulnerable population he
had pledged to protect.
Govoni has not spoken publicly
about the allegations, nor has he been criminally charged. His attorney,
Eric Koenig, issued a statement disputing them and has filed court
documents stating that the unpaid loanwas sanctioned by the
president and directors of the nonprofit. Govoni has appealed the
court’s injunction freezing his bank accounts, arguing that there has
been “no specific finding of wrongdoing.”
In all, more than 1,600 trust funds were either drained or
are missing money, according to court records. They belonged to children
with Down syndrome and other disabilities, people no longer able to
work because of medical conditions and victims of road accidents who
need lifelong expensive medical care.
“It’s a
gut-wrenching story first for the victims and also knowing the people
closest to him may have woken up and been blindsided by someone they
trusted,” said former U.S. Rep. David Jolly, a onetime Govoni associate.
No oversight
Govoni, 65, wasn’t a high roller when he moved into his Feather Sound neighborhood in Clearwater in 1990.
He
and his wife, a college professor, bought a modest home for $140,000.
He was a middling financial adviser who worked on the sideat a clothing store in the International Mall. He rarely sold enough suits to earn a sales bonus at his second job,neighbors said. He kept a low profile and seldom gave to political campaigns.
There
were already concerns about how he handled other people’s money. In
1991, the state Department of Banking and Finance denied his application
to register as an investment adviser for a new finance firm. State
regulators alleged that Govoni made 51 transactions without a client’s
permission and failed to disclose more than half a dozen customer
complaints while working at Smith Barney.
But in a recommended order, a hearing officer found the evidence insufficient to support the state’s allegations and the denial was overturned.
In 2000, Govoni founded a nonprofit called the Center for Special Needs Trust Administration.
He grew the Clearwater-based organization into one of the nation’s
largest administrators of special-needs trusts with close to 2,000
beneficiaries from almost every state.
The center catered
to people with severe disabilities who received payouts from personal
injury lawsuits. Putting the money in a trust meant they stayed eligible
for benefits like Medicaid.
Despite the large sums thattrust
fund administrators oversee, there is little state or federal
oversight, said Stephen Dale, president of the Alliance of Pooled
Trusts, a Texas group focused on setting standards for the industry.
“This is an unregulated industry,” he said.
Those with trusts at the centerGovoni
founded included Sarah Schlosser, who was 10 weeks pregnant in 2000
when the car she was riding in hit a parked tractor-trailer at 60 mph.
Six months later, while still in a medical coma, Schlosser gave birth.
The
accident left the new mother profoundly disabled. Her family in Fort
Myers battled in the courts for three years until Schlosser was awarded a
settlement and a monthly annuity to pay for future medical care.
Govoni stepped down as president of the nonprofit in May 2009, records show. Just one month later,it approved a $2.5 million line of credit to the Boston Finance Group, a company Govoni had recently set up.
In
the fall of that year, the nonprofit also transferred ownership of four
properties to Broadleaf Property Management, another newly established
Govoni company. The homes, which property appraiser records show were
then worth a combined $642,000, were deeded to Broadleaf for $400.
Though
no longer president of the center, Govoni maintained control of its
business operations, court records state. Companies he owned had
contracts to run its payroll, technology, human resources and
accounting.
As part of those contracts, several employees of Govoni’s other companies worked on-site at the center. One of thoseworkers,
Tracey Gregory, had “full access and control” over the center’s bank
accounts and “allowed the purported $100 million in loaned funds to be
transferred,” according to a complaint brought by Michael Goldberg, the
court-appointed bankruptcy trustee. Govoni also had individuals he
trusted in “key positions of authority,” including his daughter, Caitlin
Janicki, who earned $138,000 per year as thecenter’s vice president.
Officially, Todd Belisle was in charge of the trust
administration as its new president. But in a 2016 deposition for a
contract dispute, he testified that he was second in command to Govoni,
who had officially quit seven years earlier.
The loan to
Boston Finance had other obvious red flags. The lender and the borrower
had the same business address, the loan document shows. But the money
kept flowing.
Within a year, Boston Finance’s line of
credit was extended to $15 million, then to $30 million, then to $50
million. By 2012, it reached $100 million.
The money was taken from trust funds without the permission of the beneficiaries’ families, court records state.
On annual statements sent to families, the missing money was listed under generic labels like “investments.”
Finance guru
As the center grew, Govoni’s life slowly transformed.
He
was appointed in 2006 to Stetson University’s Board of Trustees and the
Florida Bar Foundation board of directors in 2009. The following year,
he bought the house next door, demolished it and built a pool house,
giving his combined propertiestwo pools.
He liked
to pose as a finance guru. Always dressed in a business suit and tie at
meetings, he acted like he was the smartest person in the room, said
David Lillesand, an attorney and national expert on special-needs trusts
who met Govoni at events and conferences.
“Leo treated me like I was the idiot and he was the only one who knew anything,” Lillesand said.
He
had a temper too, Lillesand said, recalling when Govoni yelled at one
of Lillesand’s clients who was considering starting a competitor to the
center.
His temperament was questioned in a contract
dispute lawsuit filed 10 years ago. Two executives of IT Authorities
testified in a deposition that Govoni threatened their employee with a
baseball bat. Govoni denied the claims and sued both men for defamation.
His case was dismissed because the executives’ depositions were
protected by litigation privilege.
Former state Sen. Jeff
Brandes, a Pinellas County Republican, visited Govoni’s office around
2014, he said. Govoni donated about $25,000 to Brandes’ reelection
campaign back then, avoiding $1,000 limits on individual contributions
by donating from about a dozen of his companies, campaign finance
records show.
Brandes recalled seeing several TVs tuned to Bloomberg and other business news networks.
“He
seemed to be smart and business savvy,” Brandes said. “I thought he had
been on Wall Street, and he had established he was capable of making a
large sum of money.”
The perception of Govoni as a successful entrepreneur got
extra polish when in 2014 he bought a Cessna 525A jet from a French
aviation firm through his Boston Capital Leasing, Federal Aviation
Administration records show.
He renamed the company BCL
Aviation and hired a Plant City pilot, who remained on staff for seven
years. Private jet pilots in Florida make about $114,000 per year,
according to ZipRecruiter.
It’s
unclear how frequently Govoni used his jet or whether he also chartered
it out to private customers. A request was filed with the Federal
Aviation Administration to avoid having the aircraft’s transponder
tracked by internet services like FlightAware. But federal records
obtained by the Times show one international trip from Miami to the
Virgin Islands.
Two of Govoni’s neighbors and three
former business associates told the Times that Govoni made annual trips
by jet to Louisville to attend the Kentucky Derby. Suite prices at
Churchill Downs range from $4,000 per person in the Turf Club to
$225,000 for Jockey Club suites, according to the Suite Experience Group.
In 2013, Govoni purchased a 24% stake in Big Storm Brewery,
then a small independent craft beer business started by two college
friends and operating out of a warehouse in Odessa. Co-founder Mike
Bishop played football on a team Govoni coached at Countryside High School.
Govoni
and his son LJ Govoni became principal owners and rapidly expanded the
business. They opened tap rooms in Odessa, Ybor City, Orlando and a
16,000-square-foot flagship brewery and tap room on 49th Street North in
Clearwater.
They bought out smaller breweries, including Fat Point Brewing in Punta Gorda and Darwin Brewing in Bradenton. The purchase prices weren’t disclosed.
They also signed deals with the Tampa Bay Lightning to open a Big Storm bar inside Amalie Arena and produced a Bolts-branded beer
for the franchise’s 25th anniversary. Sponsorship deals were forged
with the Tampa Bay Rowdies and the Clearwater Threshers, too.
In
an industry that requires investment in expensive brewing equipment but
operates on low profit margins, Big Storm’s growth astonished
competitors.
Brandes, who owns a stake in Green Bench
Brewing in St. Petersburg, said other local craft breweries assumed Big
Storm must have had access to large amounts of capital.
“No one really questioned the source of funds,” Brandes said. “They were managing hundreds of millions of dollars of assets.”
Political player
After donating less than
$30,000 to politicians over a 26-year period, Govoni’s political
spending rocketed after the trust administration transferred money to
his company, records show.
His Boston Holding Co. gave
$100,000 to American Crossroads, a political action committee that
supports Republican candidates nationally. He made personal donations of
$80,000 to a GOP committee that works to increase the party’s majority in the U.S. Senate.
Most of his giving went to Republicans, including former Attorney General Pam Bondi, U.S.Sen. Marco Rubio and U.S. Reps. Anna Paulina Luna and Dennis Ross.
Leo
Govoni was a strong backer of Republican U.S. Rep. David Jolly, seen
here, serving as finance co-chairperson on his 2014 campaign.
Govoni was a strong backer of Republican U.S. Rep. David Jolly of St. Petersburg, serving as finance co-chairperson
on his 2014 campaign. He and his companies gave $147,000 to the
candidate, records show, and Boston Finance paid Jolly a quarter of a
million dollars for consultancy work, according to his 2014 financial
disclosure report.
Jolly hired LJ Govoni in 2014 to work as a legislative aide
in his D.C. office. Jolly declined to comment on his business
relationship with Govoni but said his thoughts were with the families
who lost their life savings.
Govoni’s political spending gave him access to some of the
state’s top political figures. He gave $74,600 to Sen. Rick Scott’s
campaigns and political committees and, with his wife, co-hosted a 2018 Clearwater fundraiser for Scott.
Scott’s
campaign last month said it had donated the contributions from Govoni
to a special-needs group, Habitat for Humanity, and to the family of
Corey Comperatore, who was killed during the attempted assassination of
former President Donald Trump. Scott recently wrote to the Social
Security Administration seeking answers about the oversight of trust
administrations.
The federal agency performs no oversight of such organizations.
Govoni became a director of Enterprise Florida
in February 2020 and remained so until the private-public partnership
to spur economic development was disbanded in 2023, records show. It put
him in the same room as Gov. Ron DeSantis, CEOs and heads of state
agencies.
While some on the group’s board were appointed
by either the Florida Senate or the governor, Govoni appears to have
joined as an investor, according to records.
“Gov.
DeSantis was not involved in the selection of this individual, and this
individual is no longer associated with Florida Commerce or Select
Florida,” said DeSantis press secretary Jeremy Redfern.
Tampa
City Council member Bill Carlson, a Democrat, received two dozen
contributions of $1,000 each from the Govoni-linked corporations for his
2023 reelection campaign, amounting to more than 17% of his total
fundraising.
“We were in a tough race, so I called all of the top political donors in the region to ask them for support,” Carlson said.
Asked
if he would consider returning the money to the bankruptcy trustee to
share among victims, Carlson said election laws required that he close
the campaign with a zero balance.
“There is no legal mechanism to reopen a campaign account after an election,” he said.
Trouble brewing
The
business empire that Govoni assembled has collapsed since officials at
the center discovered the loan and began investigating the nonprofit’s
finances.
Under the terms of the loan, Boston Finance
should have repaid the $100 million to the center by Jan. 1, 2017. But
even after that date, money continued to flow to Govoni’s company for
another three years, court documents state.
The loan came
to light because of some paperwork left behind by Govoni’s daughter
when she resigned in 2022, according to bankruptcy records.
That same year, Govoni sold his private jet for $3.4 million, according to data in Aircraft Post, a widely used industry online price digest.
The
center filed for Chapter 11 bankruptcy in February. It sent letters to
more than 1,500 trust fund holders telling them money was missing from
their accounts. Court documents show some trusts should have had
balances in excess of $1 million, with the largest being $4.5 million.
Schlosser’s
mother, Theresa Schlosser, received a letter. About $180,000 was
missing from Sarah’s trust, it stated. There was just $10,000 left, she
said.
“It took years to get the settlement for our
family,” Theresa Schlosser said. “I trusted them. I do not know how much
over the years they took from Sarah.”
In March, a federal judge appointed a trustee to take over the center’s operations.
People who know Govoni reacted with shock and anger.
“He had gained the trust of individuals for an incredibly precious asset,” said Brandes, the former state senator.
Even
as the center was trying to unravel its financial mess, Govoni was
persuading more families to place their special-needs trusts with the
Directed Benefits Foundation, a nonprofit he founded in 2013, court
records state.
A Florida attorney general’s office investigation found that more than $2 million was missing
from the books of the foundation. Prosecutors in their civil complaint
accused him of stealing money from people already the victims of
debilitating injuries.
One of those was Tampa resident Neon Frazier, who placed her
money with the foundation after receiving a settlement from a 2019 road
accident that left her with a damaged spine.
After just a
few months, the foundation began to repeatedly deny her requests for
distributions of her money, including a request to buy a walker, she
said.
Now, her trust fund has been frozen, leaving her
struggling to afford her medication. She went to the office address in
downtown Tampa that was listed by the foundation only to discover no
employees worked there, she said.
Frazier only found out
about the scandal after hiring an attorney to try to get her money back,
she said. A former nurse, she is outraged at how money has been taken
from people, including children with disabilities.
“I
used to take care of people like that,” Frazier said. “Those people
trust them with their money just like I trusted them with my money.”
Karen
Fisher was named as one of the defendants in the state’s civil
complaint, which details a scheme almost identical to that used at the
center.
A single mother, Fisher worked as an assistant
for Govoni. To her surprise, she was promoted to vice president and
board member of the foundation in June 2023. Govoni had removed his name
as an officer of the nonprofit one year earlier,according to state records.
Soon after Fisher’s promotion, the foundation began wiring money to
Boston Finance, sending roughly $2.1 million over a two-year period,
state prosecutorsmaintain.In response to a subpoena, the
foundation also provided prosecutors with false accounting records that
initially hid the missing money.
Facing possible criminal charges, Fisher signed a consent
order on July 17, agreeing to a permanent ban from working with
special-needs trusts and a $10,000 fine that she won’t have to pay as
long as she cooperates with state prosecutors.
In an
affidavit, she said she signed checks as instructed by Govoni or by
other employees at his request. Govoni controlled all the operations of
the foundation and hewas wary of being recorded even by his employees, she said. Hesometimes
insisted she leave her cellphone in her office when they met. He would
then place his phone and handgun on a small filing cabinet, her
affidavit states.
“I now believe I was placed in this
position to be blamed for the wrongdoing of (the foundation) and be held
responsible for the checks and other documents that I signed at the
instruction of Leo Govoni,” Fisher wrote in her affidavit.
Final reckoning?
Wenk, the oncologist,
sued Big Storm in June. The upscale steakhouse his investment was to
fund was never built. His suit accused the company of misrepresenting
its financial health and questioned whether Big Storm’s rapid growth was
fueled by trust fund money.
Wenk would never have
invested had he known of “the Govonis’ and Big Storm’s criminal
involvement in the theft, embezzlement, and laundering of funds from the
Special Needs Trust,” the lawsuit states.
LJ Govoni said
Wenk’s claims are “entirely false, baseless and lack any actual
foundation” and are intended to embarrass his family. He said he plans
to take legal action against Wenk.
“I want to make it
unequivocally clear that I have never engaged in any fraudulent
activities or wrongdoing as alleged,” LJ Govoni said in a statement
provided to the Times. “These accusations are not only unfounded but
also defamatory, and I am committed to fighting them vigorously.”
But
in a July 11 court hearing on Wenk’s case, Govoni’s attorney Koenig
acknowledged that the brewery had received loans from Boston Finance.
Big Storm’s recent collapse has been as spectacular as its rise. In September 2023, the Cape Coral taproom closed with little notice.
Taprooms
in Odessa, Orlando, Sarasota and Ybor City shut down soon after the
center filed for bankruptcy earlier this year. The brewery owes a
combined total of almost $1.9 million in unpaid rent at those four
locations, according to lawsuits filed by landlords.
Big Storm pints are now only being poured at the Clearwater taproom, the property that it shares with Govoni’s many companies.
It’s
unclear if Govoni and his associates will face criminal charges over
the missing money. He faces two class action lawsuits filed by trust
fund holders. The trustee presiding over the center’s bankruptcy has
filed a complaint against Govoni for damages. Including interest, the
trustee said Govoni owes the center $142 million.
In a disclosure
filed with the Securities Exchange Commission, Govoni acknowledged one
of the class action lawsuits and accused a Palm Beach family suing on
behalf of their disabled son of “inventing legal theories.” Govoni wrote
that he intends to “vigorously defend against what we believe to be
baseless allegations.”
The civil complaint filed by the
state attorney general’s office in Pinellas County addresses only the $2
million missing from the Directed Benefits Foundation. It cites the
Florida Anti-Fencing Act’s section on theft, the Florida Deceptive and
Unfair Trade Practices Act, and state nonprofit law as grounds for
freezing Govoni’s bank accounts and assets.
It suggests further legal action may follow.
“Florida’s investigation is ongoing and anticipates adding additional causes of action,” the complaint states.
