Beware The Con Game Of Conservatorships

by Richard Eisenberg

Since May is Older Americans Month — established by JFK in 1963 when it was called Senior Citizens Month — it’s an appropriate time to sound an alert about a con game being played on some older Americans. I’m talking about crooks who are appointed as conservators (or guardians) to manage someone's affairs and then turn their wards into financial abuse victims.

This scourge was brought to my attention by the new book, The Con Game: A Failure of Trust, by T.S. Laham, a business professor at Diablo Valley College in the San Francisco Bay Area. In the book, Laham writes that America’s guardianship system is “an open invitation to potential abuse.”

Good and Bad Conservators

Roughly 1.5 million adults are under guardianship, according to a 2013 AARP estimate. Of course, many court-appointed conservators are wholly reputable; some, such as the one Mickey Rooney had, are even brought in to quash alleged elder abuse.

(MORE: Mickey Rooney’s Elder Fraud Legacy)

But in other cases, Laham says, conservators or guardians steal from, neglect or physically abuse the people they’re supposed to assist. A 2010 Government Accountability Office guardianship review of 20 cases found that “guardians stole or otherwise obtained $5.4 million in assets from 158 incapacitated victims, many of whom were seniors.” The National Association to Stop Guardian Abuse blogs and reports on the latest news on guardianship abuse.

I recently interviewed Laham about her conservatorship concerns and to get her advice for families considering getting a conservator appointed for a relative or eager to have an unscrupulous conservator removed. Highlights:

Next Avenue: Why did you write ‘The Con Game’ and who is it for?

Laham: I decided to write it to shine a public spotlight on elder abuse in America. The problem is escalating.

Is the problem with conservators that family members or supposed friends are appointed conservators and they steal? Or that courts are appointing other people who turn out to be crooks?

All of the above.

I’m trying to show that there are some problems in the system that are fixable. Most have to do with oversight and accountability. I assumed that the system was well-regulated and controlled, but that’s not true.

(MORE: When Elder Abuse Hits Home)

How is the conservator system supposed to work?

A judge appoints a “reasonable” person or organization as a conservator or guardian to make medical and/or financial decisions for an adult who would be considered a conservatee or a ward. The conservatorship ends when the conservatee dies.

What are the problems with conservatorships?

Conservatorships are not a bad thing; they’re necessary. It’s the execution of them that could be improved at times.

But people need to understand that conservatorships should be considered as the most restrictive form of court intervention. They can strip people of their individual rights.

And a conservatorship can create more complications; the family may need to sit on the sidelines because the conservator removes decision-making control from them.

What else concerns you about them?

Conservatorships are costly. There are filing fees, maybe attorney fees and ongoing legal costs. Conservator fees range from $50 an hour to $135 an hour or more. Trustee and other professional asset manager fees for high-value estates typically run from 1 to 1.5% of the asset value annually.

Is part of the problem that court-appointed guardians lack training for the job?

That is precisely correct. It’s a huge responsibility to be a conservator or a guardian. Most of time these individuals do incredible loving, caring compassionate jobs caring for relatives or friends. But the problem is they may be overwhelmed or undertrained. One survey found that fewer than 20% of courts gave conservators and guardians instructions on carrying out their duties and legal responsibilities.

Is it a good idea to bring in a conservator when a family can’t agree on how to manage their parent’s affairs?

If you want to use a conservatorship for a family dispute about an incapacitated elderly relative, that may not be the right thing to do.

A better option is to go through facilitative meditation, unless the situation is so polarized that the only other option is to go to conservatorship. A conservatorship should be a last resort as a solution to a family dispute.

What would you advise families to do if they think a relative does need a conservator?

I strongly urge people to see an attorney who specializes in this area or in elder law and discuss whether conservatorship is an appropriate solution to the situation. The National Academy of Elder Law Attorneys is an excellent resource; they will point you in the right direction.

If a son thinks his mother is unable to manage her affairs, for example, he should provide the attorney with information to prove this to file a petition with the court. If the judge believes it’s warranted, he or she will grant the power to the son.

I’d also recommend that a family get help: There are care-management services and caregiving alliances. For financial assistance, get a financial adviser.

For someone appointed as a conservator, the federal Consumer Financial Protection Bureau has a helpful guide, called Managing Someone Else’s Money.

And what should a family do if a conservator was appointed and they spot danger?

The family has to go to court to see if they can get the conservator removed. You have to prove the person isn’t doing the job — maybe he’s neglecting mom’s needs or missing assets. It’s an uphill battle.

Full Article & Source:
Beware The Con Game Of Conservatorships

Couple allegedly robbed by caretaker: “It’s like somebody taking a knife and stabbing you in the back”

Yorktown, Va. – Trust. It’s what 92-year-olds Ruth and Edward Martin say lost them nearly $14,000.

“I always trusted her. I really did. We had no reason not to trust her; she came across so sincere, but it was all not true ,” the couple told NewsChannel 3.

They’re talking about their previous caretaker, Michelle Conley.

The couple hired her privately after a recommendation from Edward’s friend. For a year, the Martins treated her like family. They loved her.

“It’s so hard when you see a friend that would do what she did to me. I couldn’t believe it.”

Court documents say Conley used Ruth’s credit card to make dozens of charges on just about everything including, hotels, concert tickets, bills, zumba classes and more.

“When the bank statements came in, we never got them because she was at this end here in a position to intercept them.”

It didn’t end there. Court papers say Conley cashed multiple checks from Edward.

Full Article & Source:
Couple allegedly robbed by caretaker: “It’s like somebody taking a knife and stabbing you in the back”

Financial abuse of Grandma a big problem for families

Financial abuse and exploitation of older Americans is on the rise, according to a recently released survey by the National Association of Professional Geriatric Care Managers.

Seventy-one percent of the 325 care managers surveyed nationwide said financial abuse and exploitation of the elderly are a growing problem in their communities.

• The top five types of financial abuse are:
•
• Theft of money or property by family members, friends or neighbors.

• Theft of money or property by a caretaker or in-home care provider.

• Investment schemes through the mail or phone.

• Home Repair scams.

• Getting senior to sign a deed, will, power of attorney through deception.

“Financial abuse of seniors is a growing problem,” said Emily Saltz, president of the geriatric care managers’ organization. “Families with older parents need to know the warning signs of this all too common and often hidden form of elder abuse. Our survey shows that close oversight of vulnerable adults by family members or qualified professionals is crucial.”

Full Article & Source:
Financial abuse of Grandma a big problem for families

Suspect Strikes Plea Deal in Elder Abuse Case

A woman who pleaded guilty Friday to stealing more than $500,000 from an elderly man with dementia and Alzheimer’s disease will be sentenced to three years of felony probation and is ordered to pay full restitution. Rosemary Baugh, 57, was charged with financial elder abuse and perjury, and faces 11 years and eight months in prison if she doesn’t comply with the terms of her plea deal.

Rosemary Baugh

Prosecutor Brian Cota explained after Friday’s hearing that while the probation sentence may seem somewhat lenient (considering the circumstances of the crime and the amount of money involved), the victim’s family and the District Attorney’s Office agreed it made legal and financial sense because a good portion of the stolen money is recoverable, lengthy and costly civil cases will be avoided, Baugh suffers from mental health problems, and the victim would likely not want to see her imprisoned. “Notwithstanding those issues,” Cota said, “this would have been a prison case.”

Baugh was arrested November 27 after an investigation by the Santa Barbara Police Department’s Property Crimes Unit discovered she had taken a small fortune from the 80-year-old victim. Baugh became his caretaker following the death of his only local relative in 2011. The two had known each other for many years prior and lived together at one point approximately two decades ago. Once she became his caretaker, however, Baugh used the victim’s money to buy a mobile home, shop online, make multiple purchases per day from QVC and the Home Shopping Network, and pay for psychic services. When out-of-town relatives recently visited the victim, they found him sickly, malnourished, and living in squalor.

As part of her plea deal, Baugh agreed to relinquish ownership of the mobile home — worth approximately $250,000 — back to the victim and his family and vacate it within 30 days. Cota said Baugh had given her daughter $100,000 to purchase property in Texas and that those funds are in the process of being returned as well. Baugh must also provide a full accounting to a civil court attorney of how she spent and gave away the money, Cota said.

Full Article and Source:
Suspect Strikes Plea Deal in Elder Abuse Case

Elder abuse: Seniors swindled out of $2.9 billion each year

Earlier this year, hired caregiver Melissa Renee Murray bilked an elderly Fort Collins woman out of more than $45,000.

 

A caller pretending to be a granddaughter in need of bail money for a Peruvian jail earlier this month tricked a pair of Fort Collins grandparents out of $16,000.

 

Garry Kohler, a former Windsor business owner, was sentenced to two years in prison Monday after pleading guilty to stealing thousands of dollars from his elderly business partner.

 

To the common eye, these cases are just another instance of theft. To those more trained, they’re yet another example of the most common form of elder abuse. A Colorado law will take effect July 2014 and offer new hope for the sobering plight.

 

More than 60 percent of elder abuse cases — or abuse against older adults — involve financial exploitation. Like many of the cases above, most are perpetrated by someone in a position of trust, typically a family member or caregiver with a “sob story” or access to important financial documents or credit cards, said Helen Davis, coordinator for the Colorado Coalition for Elder Rights and Prevention and a local expert on elder abuse issues.

 

Full Article and Source:
Elder abuse: Seniors swindled out of $2.9 billion each year

'Adviser' convicted of bilking elderly Bradenton woman out of $1 million

An unlicensed financial adviser was convicted Wednesday of grand theft and other charges in a scheme to defraud an 82-year-old Bradenton woman out of $1 million.

Ronald J. Perrault, 42, was convicted on grand theft and organized scheme to defraud charges associated with them, according to a release from Florida Chief Financial Officer Jeff Atwater. Perrault faces up to 35 years in prison at his sentencing Dec. 4.

The state Department of Financial Services’ Division of Insurance Fraud found that Perrault, while acting as an unlicensed financial adviser for the woman, defrauded her of $727,000 during the last five years and more than $1 million throughout the course of their relationship, the release said.

The investigation found that the woman initially invested $50,000 in Perrault’s fraudulent business in October 2007, followed by $100,000 in December 2007, according to the release. During the next four years, Perrault convinced her to invest an additional $577,000. She continued to submit to Perrault’s demands until her account was depleted. From 2008 until his arrest in 2011, the victim was Perrault’s only client and an investigation found all funds were transferred to Perrault for personal use.

Full Article and Source:
'Adviser' convicted of bilking elderly Bradenton woman out of $1 million

Financial Elder Abuse Stealing by Any Other Name

Sacramento, CA:
The state of California has one of the toughest and broadest laws protecting against Financial Elder Abuse in the US. So broad, in fact, that under financial elder abuse law if a business were to dispense the wrong change to a consumer and the individual was in a position to prove he was 65 or over, then the issuance of wrongful change could be interpreted as financial abuse of the elderly.

Sadly, according to a former professional in the salon industry who returned to school at 65 and became an attorney, elder abuse financial exploitation is becoming quite common, and very serious. “It never dawned on me that this might be a crime,” Helen Karr, today the elder abuse special assistant in the San Francisco District Attorney’s Office, said in comments published in The San Francisco Chronicle (The Chronicle 3/29/13). “It wasn’t until I became an attorney that financial abuse was included as a crime of elder abuse. It is just plain stealing.”

That stealing, more often than not, originates from within a senior’s own family.

Karr reveals that in her former career as a supervisor at beauty salons in department stores, she would overhear scores of conversations between hairdressers and their elderly clients lamenting the loss of funds to acquaintances, caregivers and even family members - loans that were never repaid.

Now 78, Karr has spearheaded various initiatives in an attempt to better protect the elderly from those who might otherwise take advantage of them. One of her initiatives was to spearhead an elderly financial abuse law in California that requires banks and financial institutions to report suspicion of elder financial abuse.

Part of the financial exploitation elderly problem is that medical science is allowing people to live longer than they used to. And while an individual may have more prolonged physical longevity than a previous generation, their mental capacity may not keep pace.

Hence, the upswing in financial elderly abuse.

It’s not just family or so-called friends either, Karr said in The Chronicle. Financial planners and vendors of financial products can smell an easy sale and commission through the issuance of a product not at all appropriate for a trusting senior of advanced age.

“An annuity can be a good investment,” Karr told The Chronicle. “But if you’re already in your 70s and an insurance salesman tries to sell you one, and the fine print is that you can’t take out your money for 20 years without a very steep penalty, that’s an inappropriate product for that person.”

Full Article and Source:
Financial Elder Abuse Stealing by Any Other Name

“To Kill A Mockingbird” Author a Victim of Elder Abuse

In her 1960 courtroom drama “To Kill a Mockingbird,” Harper Lee created one of American literature’s most beloved figures – the courageous Southern lawyer Atticus Finch. Told from the perspective of Finch’s young daughter, the book details Finch’s defense of a black man falsely accused of rape in Depression-era rural Alabama.

Now, at age 87, Lee is in court with her former literary agent, Samuel Pinkus, who Lee claims took advantage of her declining health and tricked her into surrendering her royalties to him. The book still sells 750,000 copies per year, according to Publisher’s Weekly, translating into more than $1.5 million in annual royalties.

Elder financial abuse cases often involve friends and relatives, and this one is no exception: Pinkus is the son-in-law of one of Lee’s oldest and dearest friends, the late Eugene Winick.

The Lawsuit

The lawsuit filed in a Manhattan court this May claims that in 2007, Lee suffered a stroke and was not well enough to comprehend the papers that Pinkus gave her to sign. “Pinkus knew that Harper Lee was an elderly woman with physical infirmities that made it difficult for her to read and see” and he deliberately sought to take advantage of her. The papers gave Pinkus control over “Mockingbird”’s copyright and royalties. Lee was – and still is – living in an Alabama assisted living facility. She claims to have no memory of signing away her rights.

“She’s 95 percent blind, profoundly deaf, bound to a wheelchair,” Dr. Thomas Butts told London’s Daily Telegraph newspaper two years ago. Butts is a close friend of Harper’s who lives in the same Alabama town, Monroeville, that Lee has long called home. He added that Lee’s short-term memory was poor, but that her longterm memory was in good shape.

At the time of that interview, Lee’s legal affairs were handled by her older sister, Alice, an attorney who still maintained an active law practice at age 99. But Alice did not file the suit against Pinkus. Manhattan-based intellectual property attorney Gloria Phares wrote the complaint and is representing Lee in the suit. Phares, who often represents literary clients, once engaged in a battle over the rights to the C.S. Lewis children’s fantasy, “Chronicles of Narnia.”

The August 2013 issue of Vanity Fair examines the complex case and the relationship between Lee and Pinkus. Winick, Pinkus’s father-in-law, was Lee’s agent while she was writing “Mockingbird” and read various drafts of the book. Around 2002, Winick’s health became too frail for him to continue representing Lee. Pinkus took her on as a client. One of Lee’s friends told Vanity Fair that she came to admire Pinkus enough as a person to give him the Medal of Freedom bestowed upon Lee by former President George Bush.

The complaint filed by Lee’s attorney Gloria Phares asserts that Pinkus took the “Mockingbird” royalties and moved them among several shell accounts. Phares has said that “Pinkus knew that Harper Lee was an elderly woman with physical infirmities that made it difficult for her to read and see” and he deliberately sought to take advantage of her.

Full Article and Source:
“To Kill A Mockingbird” Author a Victim of Elder Abuse

Financial Elder Abuse

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