Three More Accused of Role in Scamming Elderly Nationwide

 

For Immediate Release

U.S. Attorney's Office, Eastern District of Missouri

ST. LOUIS – Three people from California have been federally indicted and accused of participating in a conspiracy that used Taiwanese passports, fraudulent bank accounts and “money mules” to scam elderly victims nationwide, joining four others also accused of a role. 

On May 8, Bowen Chen, 21, of Monterey Park, Jiacheng Chen, 19, of East San Gabriel, and Vianne Chen, a.k.a. Tingting T. Chen, 41, were added to an indictment in U.S. District Court in St. Louis. Four other Californians have already been indicted on charges including conspiracy to commit mail, bank and wire fraud: Liang Jin, 24, of Walnut, Tsz Yin Kan, 41, of Chino Hills, Kaiyu Wen, 25, of Irvine, and Yu-Chieh Huang, 22, of Chino Hills.

The expansion of the initial case in St. Louis was part of the Money Mule Initiative, an annual campaign to identify, disrupt, and criminally prosecute networks of individuals who transmit funds from fraud victims to international fraudsters. Fraudsters rely on money mules to aid a range of fraud schemes, including those that predominantly impact older Americans, such as lottery fraud, romance scams and grandparent scams as well as those that target businesses or government pandemic funds. This year, law enforcement took action to stop over 3,000 money mules. These actions ranged from criminal prosecutions to letters warning those who may have been unknowingly recruited by fraudsters. Agencies are also educating the public about how fraudsters use money mules and how to avoid unknowingly assisting fraud by receiving and transferring money.

The St. Louis indictment accuses Kan of setting up USA You Yi Sheng Inc. as an education service business in California. Kan then produced fraudulent immigration paperwork known as the Form I-20, or "Certificate of Eligibility for Nonimmigrant Student Status," the indictment says. Vianne Chen, a bank employee, Kan and others opened student checking accounts using the fake I-20 forms and Taiwanese passports that had been shipped to Kan, the indictment says. 

Other scammers targeted older Americans with tech support fraud, romance fraud, and imposter schemes and tricked their victims into collecting and delivering large amounts of cash to money mules like Huang, the indictment says. Couriers converted the cash they collected from fraud victims and others engaged in criminal activity into cashier’s checks that they deposited into a bank account that has received more than $7 million, the indictment says.

Bowen Chen was the largest depositor into that account, accounting for $1.3 million, the indictment says. Jiacheng Chen deposited approximately $615,000 and Kan deposited $440,000, it says. 

Huang was the first to be charged in the case. In August, an elderly Missouri man was told via a pop-up ad that his computer was infected with a virus. He and his wife were then falsely told that someone had been accessing child pornography through the computer and they would have to pay $88,000 to avoid prosecution, according to charging documents. The Missouri couple gathered the money, but got suspicious and contacted police, who arrested Huang.

Charges set forth in an indictment are merely accusations and do not constitute proof of guilt.  Every defendant is presumed to be innocent unless and until proven guilty.

Homeland Security Investigations investigated the case. Assistant U.S. Attorneys Tracy Berry and Kyle Bateman are prosecuting the case.

If you or someone you know is age 60 or older and has experienced financial fraud, experienced professionals are standing by at the National Elder Fraud Hotline: 1-833-FRAUD-11 (1-833-372-8311). This Justice Department hotline, managed by the Office for Victims of Crime, can provide personalized support to callers by assessing the needs of the victim and identifying relevant next steps. Case managers will identify appropriate reporting agencies, provide information to callers to assist them in reporting, connect callers directly with appropriate agencies, and provide resources and referrals, on a case-by-case basis. Reporting is the first step. Reporting can help authorities identify those who commit fraud and reporting certain financial losses due to fraud as soon as possible can increase the likelihood of recovering losses. The hotline is open Monday through Friday from 10:00 a.m. to 6:00 p.m. ET. English, Spanish, and other languages are available. The Federal Trade Commission also provides a hotline at 877-FTC-HELP and a website at www.ftccomplaintassistant.gov to receive consumer complaints.

More information about the Department’s efforts to help American seniors is available at its Elder Justice Initiative webpage. For more information about the Consumer Protection Branch and its enforcement efforts, visit www.justice.gov/civil/consumer-protection-branch. The Justice Department provides information about a variety of resources relating to elder fraud victimization through its Office for Victims of Crime, which are available at www.ovc.gov.

Contact

Robert Patrick, Public Affairs Officer, robert.patrick@usdoj.gov.

Updated May 13, 2024

Source:
Three More Accused of Role in Scamming Elderly Nationwide

‘Real Housewives’ Star Cannot Dismiss Federal Indictment Accusing Her of Defrauding Elderly in Nationwide Telemarketing Scheme

by Adam Klasfeld

“Real Housewives of Salt Lake City” star Jennifer Shah cannot dismiss an indictment accusing her of conspiring to defraud elderly and vulnerable people out of millions in a nationwide telemarketing scheme, a federal judge ruled.

On March 30, authorities arrested Shah (and her “first assistant” and accused co-conspirator Stuart Smith) in Utah. Smith is not one of the subjects of the federal judge’s latest ruling, but his case remains pending. Both were charged with conspiring to commit fraud and money laundering.

Manhattan U.S. Attorney Audrey Strauss announced their imminent transfers to the Southern District of New York in a statement accusing the duo of using their celebrity status to bilk hundreds of victims.

“Jennifer Shah, who portrays herself as a wealthy and successful businessperson on ‘reality’ television, and Stuart Smith, who is portrayed as Shah’s ‘first assistant,’ allegedly generated and sold ‘lead lists’ of innocent individuals for other members of their scheme to repeatedly scam,” Strauss said on the day of their arrest. “In actual reality and as alleged, the so-called business opportunities pushed on the victims by Shah, Smith, and their co-conspirators were just fraudulent schemes, motivated by greed, to steal victims’ money.”

On Thursday, Senior U.S. District Judge Sidney Stein rejected Shah’s bid to dismiss the indictment. The judge also jettisoned a flurry of other pre-trial motions filed by Shah and another accused co-conspirator, Cameron Brewster.

“The superseding indictment here sufficiently alleges that Shah joined the telemarketing conspiracy willfully and with specific intent to defraud,” Judge Stein wrote in a 10-page opinion and order.

Prosecutors claim that Shah “generated and sold leads to other [participants in the telemarketing scheme] for use by their telemarketing sales floors with the knowledge that the individuals they had identified as ‘leads’ would be defrauded by the other participants.”

Brewster referred to those lead lists as a “money sucking website,” prosecutors say.

The judge also dispensed with Shah’s argument that prosecutors did not allege fraudulent and “material” promises to victims.

“The Court also rejects Shah’s argument that the indictment is deficient for failure to specifically allege that the misrepresentations made to the victims of the business opportunity scheme were material,” Judge Stein wrote.

Shah also sought to suppress her post-arrest statements, claiming they were involuntary.

The former reality TV star concedes that she signed a Miranda waiver, but she claimed that law enforcement misled her by telling her they “just wanted to talk” to her. She asserted that she lacked sophistication with the criminal justice system and was “confused and emotionally off-balanced” at the time of her interrogation. She also claimed that she was “unable to read” the waver because she did not have her reading glasses and her contact lenses were blurry.

None of these arguments resonated with Judge Stein.

“Considering the totality of the above circumstances taken from the affidavits in the record, as well as the fact that the Court has listened to a recording of the interrogation, the Court finds that Shah’s Miranda waiver was decidedly voluntary,” he ruled.

Attorneys for Shah and Brewster did not immediately respond to emails requesting comment.

Read the ruling below:

 

Full Article & Source:

‘Real Housewives’ Star Cannot Dismiss Federal Indictment Accusing Her of Defrauding Elderly in Nationwide Telemarketing Scheme

Caretaker Of Two Seniors Charged With Stealing Money From Their Bank Accounts

MIAMI, Fla. (CW44 News At 10)– There has been a federal indictment unsealed that charges the caretaker of two seniors with accessing to their bank accounts to steal nearly $300,000.

The indictment alleges that from 2016 to 2019, Sherri Lynn Smith worked as a caretaker for an elderly couple in Broward County.  As part of her duties, Smith had access to the victims’ bank accounts to assist them with paying their monthly bills.  Smith used her access to the victims’ bank accounts to embezzle approximately $300,000 out of the victims’ accounts without their knowledge or consent, according to the indictment.

She accomplished this by writing and forging the victim’s signature on a number of checks made payable to herself, her family members, and her creditors; initiating Zelle electronic money transfers from the victims’ accounts to her own bank account; and making electronic payments from the victims’ accounts to her and her husband’s numerous credit card accounts, it is alleged.

The indictment returned by a federal grand jury on June 8, 2021, charges Smith with 16 counts of bank fraud and 5 counts of aggravated identity theft.

Smith made her initial federal court appearance today before U.S. Magistrate Judge Bruce E. Reinhart, who sits in West Palm Beach.  If convicted, the maximum prison sentences on each bank fraud count is 30 years.

The maximum sentence on each aggravated identity fraud charge is two years.  The case is assigned to U.S. District Judge Aileen Cannon, who sits in Ft. Pierce.

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Caretaker Of Two Seniors Charged With Stealing Money From Their Bank Accounts

Elkhorn City lawyer indicted for allegedly taking hundreds of thousands from family

By Steve Rogers

Timothy Belcher/Justia

PIKE COUNTY, Ky. (WTVQ) – A Pike County lawyer faces more than 200 years in prison if convicted of 10 counts of theft and tax evasion.

Timothy Belcher, of Elkhorn City, was indicted (belcher federal indict) Thursday by a federal grand jury on seven counts of fraud and three of filing false tax returns in connection with the theft of hundreds of thousands of dollars that should have gone to the heirs of a Pike County man killed in an accident two decades ago.

If convicted, Belcher faces 30 years on each of the seven fraud counts and three years on each tax fraud cases which stems from his failure to report the stolen money on his tax returns in 2013, 2014, and 2016, according to the indictments.

The charges are similar to state charges filed against Belcher in Pike County almost two years ago.

The family of Samuel Johnson hired Belcher, who at one time was city attorney for the city of Elkhorn City, following Johnson’s death in 2001. According to the indictment, Belcher obtained a large settlement for the family with half going to Johnson’s widow and the other half to be divided among Johnson’s children once it was determined whether he had two or three children.

That was in 2004.

Belcher put the money in an escrow account that contained as much as $817,155 on Dec. 31, 2007, court records claim. By the time the family had become frustrated and hired other attorneys to get to the bottom of what happened to the money, the account was down to $389 on Dec. 31, 2018.

When confronted in 2019 about the money, Belcher admitted he’d diverted it to his own use over the years, spending it on everything from mortgage payments to his cell phone bills, according to the indictment.

After he was indicted in Pike County, the state Supreme Court suspended Belcher’s license, according to state judicial records.

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Elkhorn City lawyer indicted for allegedly taking hundreds of thousands from family

Massive international fraud tricked seniors into sending money to criminals in Baltimore, federal indictment says

By Justin Fenton

A 91-year-old living on the Puget Sound in Washington got an urgent call in January 2019: His grandson was a passenger in a vehicle stopped in Baltimore with a large amount of cocaine, and he was being held on federal drug charges.

He needed $13,000 in cash for bail, urgently, the caller said, which the worried grandparent agreed to send overnight. He later sent another $9,000 so his grandson could retain an attorney.

But the call had come from Canada, with the money directed to a vacant home in Baltimore and intercepted by people working as part of a sophisticated network throughout North America to bilk seniors. Investigators say at least 70 victims lost a total of $1.5 million.

Federal authorities in Baltimore announced Friday that they have indicted three alleged members of the scheme on conspiracy to commit mail fraud. Additional charges were brought in federal court in Indiana, while investigators in Canada said they executed 17 search warrants in the Montreal area and met with 35 people connected to the fraud.

“Any parent or grandparent can relate to the fear and the urgency to act that these victims were experiencing when they received those phone calls,” said Acting U.S. Attorney Jonathan F. Lenzner, calling the scheme “both ruthless and well-organized.”

FBI Supervisory Special Agent Keith Custer said the outfit made as many as 1,000 to 1,200 calls a day, the vast majority fruitless. But when they snagged a victim, they continued to collect more cash, and convinced the victims not to mention the situation due to a “gag order” requiring secrecy.

“There were a number of them working in conjunction, each playing different roles as police officer or lawyer, or even (a) member of the family,” Custer said. “They were very well-rehearsed. They knew exactly which levers to pull.”

A Baltimore woman, Amaya English, 21, was among those charged in U.S. District Court in Maryland. Authorities said she tracked packages of cash over the Internet and relayed their delivery status to other conspirators.

Also charged is Medard Ulysse, 37, of Miami, and Eghosasere Avboraye-Igbinedion, 26, of Mirarmar, Fla. Two other Florida men were charged previously and pleaded guilty last fall — admitting they defrauded 28 elderly victims of more than $939,000.

Prosecutors said Ulysse recruited people in Florida, with promises of travel and cash payments, to retrieve packages sent by elderly victims. The conspirators identified locations where no one would be present to receive a package.

In the calls, the conspirators claimed they were calling on behalf of a relative who needed cash for bail money, legal fees or other expenses. In one case, an 89-year-old Michigan woman was called by someone purporting to be “Officer Booth,” who said her grandson had been in a car crash and that drugs were found. She sent $8,000, and eventually $30,000.

Jennifer C. Boone, the Special Agent in Charge of the FBI’s Baltimore Field Office, said seniors and others should know that government agents working in an official capacity should not ask for money urgently and secretively, through cash, prepaid cards or gift cards.

“Seniors should also protect their personal information and not divulge it over the phone, through mail or on internet unless they initiated the contact,” Boone said. “They should talk over investments with a trusted friend, family member or financial advisor, and resist the urge to act quickly or secretly, which are frequent tactics used by scammers.”

Victims were encouraged to file a complaint online with the FBI’s Internet Crime Complaint Center or by calling 1-800-225-5324. Elder fraud complaints can be filed with the FTC online or at 877-FTC-HELP.

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Massive international fraud tricked seniors into sending money to criminals in Baltimore, federal indictment says

The Case Against Katherine Kealoha Just Keeps Getting Worse

When the FBI arrested deputy prosecuting attorney Katherine Kealoha last month, one of the more troubling allegations was that Kealoha stole almost $150,000 from two children for whom she was serving as guardian and trustee.

Now allegations about the way Kealoha handled the trust of Ransen and Ariana Taito have gotten worse.

In documents filed Friday, the federal government says that Kealoha not only took the money, but also leaned on a witness in the guardianship case to help her cover it up.

An FBI report says Katherine Kealoha, a Honolulu deputy prosecuting 

attorney, asked a potential witness to call her if he was subpoenaed by

a grand jury investigating Kealoha.

The Taitos’ attorney declined to discuss the newly filed documents, but said the Taitos would have had nothing to gain by helping cover up the wrongdoing.  Their only motive, he said, would have been to help Kealoha, who had been their guardian when they were children — after their father had died and during a time when their mother was often absent.

“There’s always concerns about whether they committed perjury before the grand jury,” said Michael Green, a well-known criminal defense attorney now representing the Taitos.

“If they did, they certainly didn’t benefit from it, if someone took their money,” Green said.

So, he asked, “Why did they do that? Who would have asked them to do that?”

One person who might have benefited, he said, was Kealoha.

And, he said, “She was basically all they had.”

Honolulu attorney Michael Green said his clients, Ransen and Ariana

Taito, would have had nothing to gain personally by lying to a grand jury.

Kealoha, and her husband, former Honolulu Police Chief Louis Kealoha, have pleaded not guilty to all of the federal charges filed against them.

Her attorneys, Myles Breiner and Kevin Sumida, did not return calls for comment. However, Sumida has denied Kealoha took money from the Taitos and has said the Taitos testified to that under oath.
“The allegations in the indictment concerning the guardianship matter are shockingly inaccurate,” he told KHON’s “Always Investigating” last month.

Sumida repeated the assertion in a motion filed Tuesday, writing, “as the grand jury transcripts will undoubtedly confirm, both of the then-minor children, who are now adults, testified that they did in fact receive their funds, that they signed receipts for the funds, and that bank records will confirm receipt of such funds.”

Sumida also took aim at allegations in the indictment that said Kealoha bilked her uncle and grandmother, Gerard and Florence Puana, out of tens of thousands of dollars as part of a reverse mortgage and investment scheme. He said the accusations were already found to be untrue when a civil jury sided with Kealoha in a lawsuit filed against her by the Puanas.

He said, “the jury was so disgusted with the claims made against Katherine Kealoha that they had no difficulty awarding her over $600,000 in damages, including over $200,000 in punitive damages against the uncle.”

Sumida added that while Kealoha didn’t seek punitive damages against her grandmother, who is now 98, the elder Puana lost on every claim and was ordered to pay $80,448 in Kealoha’s attorney’s fees. The Puanas are appealing the decision.

But Sumida’s motion did not directly address the FBI report contained in the government’s motion filed this week concerning the guardianship case.

At the time he testified, Ransen was represented by Jacob Delaplane, a former deputy prosecuting attorney who worked with Kealoha in the career criminal division of the prosecutor’s office.

At the center of the new allegation is a document that Kealoha filed in the Taitos’ state guardianship case, which appears to clear her of stealing money from Ransen Taito. The document appears to be a statement, filed by Kealoha, in which Ransen approved a final accounting saying Ransen had gotten about $84,000 from his trust account after he turned 18. The final accounting also was filed by Kealoha.

Federal prosecutors now say the approval document was forged.

An FBI report filed as an exhibit on Friday describes an interview between the FBI and someone described as “Witness 1.” According to the report, Witness 1 told agents during an April 2017 interview that Kealoha called him for a private meeting in June 2016 during which she showed him the approval statement with his forged signature.

The government’s version of the document has redacted the names of two apparent witnesses, which appear in an unredacted version of the document filed in the state guardianship case: Bradley Ito and Elson Honda. They could not be reached for comment and it’s unclear exactly what their relationship is to Taito or Kealoha but they are on the document as witnesses.

According to the report, Kealoha told Witness 1 — apparently Ito or Honda — she didn’t know how his signature had gotten on the document or who had signed it. Kealoha told Witness 1 that if he received a subpoena to testify before the grand jury he should contact her and she would provide an attorney.

According to the FBI report, Witness 1 saw Kealoha’s comment as self-serving. The report quotes Witness 1 as saying he “felt that he has always been a good friend to KEALOHA, but she doesn’t always reciprocate” and that “she only answers (his) calls when it is convenient for her or when she wants something from him.”

Witness 1 did not tell Kealoha when he received the subpoena, the FBI report says.

It’s not clear what relationship Kealoha had with the Taitos before she became their guardian in 2004.

The Taitos’ maternal grandmother, Marlene Drew, said in an interview that she wasn’t aware of a connection, although Ransen and Ariana lived with her. She added that she was often kept “in the dark” about her grandchildren’s affairs.

What is clear is that Kealoha has been in the Taitos’ lives for years, at least since Ransen was 12 years old and Ariana 10. At that time, the Taitos had come into about $167,000 from a medical malpractice claim their father, Pakini, had brought against Kaiser hospital. Paikini and his wife, Lauren, were estranged and Pakini was sick with cancer, Drew told Civil Beat in a previous interview.

Kealoha, who had worked on the malpractice matter as a private attorney, was appointed guardian by a state circuit court in Honolulu. The court ordered the money to be put into trust accounts for Ransen and Ariana. The court also ordered the trust account to require signatures from Kealoha and her co-counsel, Jim Bickerton, in order to withdraw funds.

Federal prosecutors say this document, which appears to clear Katherine

Kealoha of misappropriating money from a trust fund, includes a forged 

signature.

But the federal government alleges Kealoha didn’t do that. According to the federal indictment, she and her husband, former Honolulu Police Chief Louis Kealoha, used the funds as their own.

Specifically, the indictment alleges the Kealohas used the trust accounts as collateral for approximately $1.2 million in loans, including about $105,000 in personal loans and a $1.1 million home refinancing.

It also says they misappropriated almost $150,000 from the accounts.

Ransen declined to comment, saying he and Ariana have a good lawyer and “I don’t want to jeopardize anything.” Ariana did not respond to an interview request.

Full Article & Source:
The Case Against Katherine Kealoha Just Keeps Getting Worse

Union Co. Judge Executive Indicted on Public Corruption Charges

Click to Watch Video

Jody Jenkins earns a yearly salary of more than $80,000 as the elected judge executive of Union County. Now, he's alleged to have defrauded the very people who put him into office. A federal grand jury in Bowling Green indicted Jenkins Wednesday morning on four counts of honest services fraud, a statute that is typically applied to those accused of public corruption.

The four count indictment alleges Jenkins devised a scheme to deprive the citizens of the county of their right to honest and faithful services of the office of judge executive. Federal prosecutors allege Jenkins solicited and received approximately $20,000 in kickbacks during the purchase of several pieces of heavy equipment that was later tied to an elaborate theft ring.

The theft ring targeted heavy equipment like skid steers and mini-excavators across three states. Four men, Thomas Elpers, Andrew Elpers, Jordan Wedel and Jason Habermel, were all all federally indicted for their roles in the theft ring. All four men have pleaded guilty and are currently serving their sentences.

According to the now-public indictment, Jenkins took steps to hide, conceal and cover-up his actions, including directing that false and fraudulent invoices be submitted.

Eyewitness News has been investigating the county's purchase of the stolen equipment since early 2015.

According to purchasing records obtained by Eyewitness News, the Union County Fiscal Court purchased several pieces of equipment later tied to the theft ring, totaling more than $100,000. That equipment was seized by the FBI in late 2014.

As Eyewitness News has previously reported, the equipment the county purchased had numerous red flags including altered serial numbers. The equipment was also purchased for significantly below market value, sometimes more than $40,000 less than it would normally sell for.

Judge Jenkins previously told Eyewitness News that the equipment was purchased in good faith.

One of the four men indicted as part of the theft ring, 45-year-old Jason Habermel, made damaging statements against Judge Jenkins during his sentencing hearing earlier this year.

Under oath, Habermel stated Andrew Elpers set a price on the stolen equipment that was to be bought by the Union County Fiscal Court. The price was set at just below $20,000 at Judge Jenkins' direction, Habermel said. This was done to avoid triggering the state's model procurement law which requires government agencies to publicly bid out purchases that exceed $20,000, according to Habermel's testimony.

The county's business transactions with Habermel began in early 2014 and abruptly stopped six months later.

Habermel stated that he would take the checks signed by Judge Jenkins and cash them at a Planters Bank location in Union County. From there, Habermel stated he would take anywhere from $500 to $1500 from the proceeds as a 'brokerage fee.'

Habermel wasn't the only person taking a cut of the proceeds, according to his testimony.

While under oath, Habermel told the court that Judge Jenkins would ask for a 'cost of doing business' in Union County that would be anywhere from $2000 to $2500. Habermel's attorney later characterized these transactions as 'kick backs' for Judge Jenkins. Habermel would also implicate Union County Clerk Trey Peak and local businessman Steve Eckels. As Eyewitness News has previously reported, Eckels has often received preferential treatment in terms of being awarded county contracts.

"I would pay Mr. Eckels, Jody Jenkins' friend," Habermel testified. "He would also receive monetary compensation for doing business in Union County as well as Trey Peak who is a county official as well. That was brought forth to me by them, saying that, 'if we're going to do business with you (Habermel), this is just the cost of business."

Jenkins was not at his office when Eyewitness News tried to reach him for comment. A fiscal court staff member told Eyewitness News that Jenkins had not returned from an early morning appointment. Additionally, Jenkins did not return calls requesting comment.

Law enforcement sources said Jenkins has retained an attorney. However, the identity of Jenkins' attorney is unknown.

Jenkins will make his initial appearance in federal court later this month. If convicted, Jenkins could be sentenced to no less than 20 years in prison for each count, fined $1 million and serve a three year period of supervised release. Jenkins can remain as judge executive through the duration of his criminal case, according to state law. Jenkins can only be removed from office if he's convicted of a felony.

Click here for the official release from the US Attorney's Office.

Click here to read the indictment.

Full Article & Source:
Union Co. Judge Executive Indicted on Public Corruption Charges

Court scrambles to replace Ayudando guardians

State district judges in Albuquerque have identified 176 people, many of them indigent and all of them incapacitated in some way, who relied on Ayudando Guardians for help with everything from living arrangements to ensuring their funds, however meager, were safe.

Those people fall under court oversight, because the courts, over the years, have appointed Ayudando Guardians as their guardians or conservators and judges relied on annual reports from the company to keep tabs on Ayudando’s clients.

“A guardianship/conservatorship offers a higher degree of protection to the individual than other management mechanisms,” explains Ayudando on its web site.

Now that the company and its two principals are under federal indictment for looting client accounts and money laundering, two CPAs with the U.S. Marshals Service are winding down Ayudando business operations. The Albuquerque-based company has lost about half of its employees since the recent arrests of its two top managers.

Chief District Judge Nan Nash and Chief Civil Division Judge Shannon Bacon in Bernalillo County said in an interview Friday that the courts are faced with having to quickly find lawyers who will file cases for replacement guardians and conservators, and to ensure no one slips through the cracks.

“Our intention is to move heaven and earth to make sure every single case is transferred in a timely manner and in accordance with the law,” Bacon said Friday.

Bacon has also asked the State Auditor’s Office to conduct an audit of 20 other companies, like Ayudando Guardians, that have contracts with the state Office of Guardianship to provide guardianship or conservatorship services for low-income or indigent and incapacitated New Mexicans.

“We are looking into the Office of Guardianship’s oversight and lines of accountability for guardianship companies,” said a spokeswoman for State Auditor Tim Keller on Friday.

The guardianship office provides publicly funded guardianship/conservatorship services, paying contractors about $325 a month for each client.

In responding to Journal questions, officials with the Office of Guardianship last week said the agency’s most recent audit of Ayudando was in September 2016. Ayudando has 166 clients through its guardianship office contract, and is required to carry liability insurance and post fidelity bonds each year.

In Bernalillo County, about 110 clients who have court-appointed Ayudando guardians and conservators fall under the responsibility of the state guardianship office. That state agency is expected to find replacement companies, but faces budgetary issues and has only about 10 lawyers on contract, the judges told the Journal. Finding lawyers to refile cases for the remaining 66 “private pay” Ayudando clients is underway, and Bacon is also working to recruit guardians ad litem and other guardians to take over Ayudando’s role.

Outside the court’s jurisdiction are those clients who gave Ayudando authority to act as their representative payee, managing their monthly income from Social Security, VA pensions or other sources and paying their bills. That group of Ayudando clients will need to find new payees, and if they are now incapacitated, that could send another wave of guardianship/conservatorship cases into the courts.

Nash and Bacon said they learned that the U.S. Marshals Service, which has federal court authority to operate Ayudando for the time being, is expected to end its oversight by the end of August, so there is a looming deadline to transfer clients to other guardians.

As for those Ayudando employees who remain at work, many appeared shocked and worried about their clients when Nash and Bacon visited Ayudando’s office last Thursday for a meeting with U.S. Marshals.

“I can’t tell you how moved we were about the dedication of the employees,” Nash said. Even before the indictment was handed down, employees were paying for some clients’ incidentals out of their own pockets, she said.

“They were just as gobsmacked as the rest of us (about what’s happened),” Nash added.

In promising that clients’ funds will be protected, Ayudando’s web site notes, “The guardian/conservator must file an inventory which lists all the property of the client and must file accountings with the court that reflect all transactions involving that person’s assets.”

But Nash and Bacon said the annual financial reports filed by Ayudando in their courts provided no red flags. Neither judge recalled receiving complaints from Ayudando clients about missing money.

Critics say the annual reports required of guardians and conservators fall short of providing judges with enough information.

Moreover, a recent lawsuit alleges a $600,000 theft of client funds by another Albuquerque conservator, Desert State Life Management. The firm filed annual conservator reports, but accountings of the client’s trust funds weren’t in the court file, according to a lawyer involved in the case.

Full Article & Source:
Court scrambles to replace Ayudando guardians

Winter Haven lawyer accused of misappropriating $93,255 from client

Josiah Ewing Hutton

A Winter Haven lawyer who was disbarred in June has been indicted in federal court on charges of misappropriating nearly $93,255 of a bankruptcy client's money.

Josiah Ewing Hutton, 60, is charged with concealment of assets and embezzlement against a bankruptcy estate, and could face a maximum five years in prison on each of the two counts if he's convicted in U.S. District Court in Tampa.

The Florida Bar shows he'd been practicing law since 1989, most recently in Fort Myers, but the Polk County Property Appraiser's Office website shows he's owned a house on Lake Otis in Winter Haven since 1991 and claims homestead exemptions on that property.

The federal indictment against Hutton states that a client retained him to represent her in a bankruptcy case, and she gave him a $93,255 settlement check in anticipation of that filing.

He deposited the check, representing the client's bankruptcy estate, in an escrow account. When preparing the bankruptcy filing, Hutton didn't list the check as an asset, according to a news release from the Department of Justice office in Tampa. After filing the bankruptcy case, Hutton is accused of embezzling a large portion of the settlement check for his own use.

Hutton was arrested Friday and released from custody after posting a $10,000 bond.

In a separate proceeding before the Florida Supreme Court in June, Hutton was disbarred for misappropriating funds and ordered to pay nearly $200,000 in restitution to three clients.

Full Article & Source:
Winter Haven lawyer accused of misappropriating $93,255 from client

Magistrate upholds federal indictment against suspended judge

A federal magistrate Friday recommended upholding an indictment accusing Family Court Judge Steven Jones of participating in a decade-long investment fraud scheme.

Attorneys Robert Draskovich and Gary Modafferi had argued in court papers that the 20-count federal indictment should be dismissed against Jones because it violated the five-year statute of limitations.

They contended the actions alleged in the indictment were vague and old, making it difficult for the judge to defend himself. Key witnesses in the FBI investigation, including the judge’s father, have died over the years and no longer are available to be questioned, the lawyers argued.

But U.S. Magistrate Judge George Foley Jr. concluded that the charges laying out the protracted scheme in the indictment did not violate the statute of limitations.

“The indictment on its face, sufficiently alleges that (Jones) participated in conspiracies to commit wire fraud and launder money, and that overt acts in furtherance of those conspiracies were committed within five years of the filing of the indictment,” Foley wrote.

Draskovich said Foley did not prohibit the defense from raising the statute of limitations issues later in the case.

“I can understand at this point in time he’d be reluctant to grant the motion, but nonetheless his order allows us to refile the motion in the future,” Draskovich said.

Jones, 54, first elected to Family Court in 1992, was suspended from the bench after his November 2012 indictment. He has continued to receive his $200,000 annual salary.

The longtime judge was charged with using the power of his office to carry out a $3 million investment fraud scheme, which authorities alleged began in 2002. He pleaded not guilty and was released on his own recognizance.

Jones, his former brother-in-law, Thomas A. Cecrle Jr., and four others face criminal charges, including conspiracy to commit mail fraud and wire fraud, securities fraud and money laundering. They are to stand trial March 3.

Jones also faces state judicial misconduct charges. He is accused of violating the state’s Judicial Code of Conduct by mishandling a romantic relationship in 2011 with a prosecutor who appeared before him.

The Nevada Commission on Judicial Discipline has scheduled a Dec. 2 hearing on the allegations in Las Vegas.

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Magistrate upholds federal indictment against suspended judge