How a Fraudulent Guardianship/Conservatorship Commences and Continues

This column examines conditions in Florida but the same problems exist in many states.

Step One: Eminent danger —The initial court petition

The professional guardian [or conservator], with the assistance of her attorneys, commences the embezzlement process by filing an emergency petition in the probate courts to become the “emergency” “temporary” guardian.

Florida guardianship statutes (Chapter 744), like many states, require that there be an “eminent danger” in order for the petitioner to become the “emergency temporary guardian.”

The guardian oftentimes fabricates the “eminent danger” by stating that there is a neighbor or relative or stranger who is taking advantage of the elderly person. In some cases, this may be a somewhat true statement, albeit an exaggerated claim. In most cases, upon further investigation, there has been no “eminent danger”whatsoever.

Step One takes away all of the victim’s civil rights and therefore gives the guardian and her attorneys full control over the victim and his or her assets.

Step Two: The examining committee

Once the professional guardian has taken control of the victim on a temporary basis (the emergency temporary guardianship order expires in 60 days [in Florida]) an examining committee of three medical “professionals” steps in to verify the allegation of mental incapacity. Oftentimes, the victim is administered a cocktail of psychotropic drugs to enhance the claims that he or she is incompetent.

“Ward” Elizabeth Faye Arnold, for instance, stated, “They put me on drugs that made me feel very drunk. I couldn’t even remember my name. Now that they have all my money, they don’t medicate me that way anymore.” One of the three medical professionals must be a psychiatrist and the victim is generally always found to be mentally incapacitated. The guardian usually has her own set of medical professionals that she utilizes on a regular basis. For instance, one professional guardian is married to a medical doctor and therefore has an entire fleet of medical professional associates available to her.

Back in the courtroom, soon after the three medical professionals file their reports, there is a capacity hearing. The victim seldom is permitted to attend this hearing. The judge quickly scans the medical examinations that “verify” that the victim is “mentally and/or physically incapacitated.” The judge then signs an order that gives the professional guardian full and permanent legal authority over the victim’s person and property.

Step Three: The “feast” begins

Property is sold for below market value and the deeds switch and switch several times. (kick backs are suspected). Bank accounts, annuities, stocks, and Certificates of Deposit are liquidated into one big guardianship account.

Out of this large bank account, the guardian is expected to pay all the victim’s, but bills oftentimes go unpaid.

How the victim’s money is spent

1. Attorney’s fees and guardianship fees for “services rendered to ‘Benefit’ the ‘Ward.”

A large part of the victim’s money is spent on attorney’s fees and guardian’s fees. As long as there is ample money in the victim’s guardianship account, the guardian and her attorney cohorts will file motion upon motion after motion to the courts, such as:

• A motion to sell the ward’s furniture.
• A motion to liquidate stocks and Certificates of Deposit.
• A motion to transfer the ward to a different nursing home.
• A motion to sell the ward’s homesteaded house.
• A motion to open up a safety deposit box.

Each motion can cost the “ward” in excess of $2,000 because the motion must be written, researched, filed, and then a hearing is scheduled. Oftentimes, the motions cost more than what is being petitioned for.

2. Puffing the monthly budget

The guardian frequently doubles the monthly expenses then keeps the remainder.

3. Selling the “Ward’s” personal belongings for below market value then pocketing the difference

The guardian underestimates the amount of the sale of personal items, such as jewelry, paintings, and antiques, for the purpose of the court record inventories, then is free to keep the difference. There is little and often no court oversight.

4. Bills are simply not paid

Often times, the bills of the “ward” are not even paid. When the “ward” dies, the guardian simply places an ad in an obscure newspaper, if there is money left for an estate to be probated.Assuming creditors do not see the ad and file a claim against the estate within 30 days, their claims are forever barred and so the guardian was able to fool creditors and abscond with the money and not have to pay any of the bills. If she is caught, she simply pays the bills of the creditors who caught her. This frequently includes Medicaid.

5. Accounting is not accurate

The guardian can claim a much lower amount of liquid assets than what the victim is actually worth and then pocket the rest.

• Julie Sweeten–$400,000.00 estate with an alleged $80,000.00 remaining when Sweeten died. More than $300,000.00 was spent in three years.
• Louise A. Falvo started off with approximately $800,000.00. Two months into the guardianship, her guardian filed an accounting with the court stating that Falvo was worth only $672,000.00. Shortly thereafter, a bank statement from Bank of America stated that Falvo now had $449,000 after all accounts had been liquidated. So, approximately $200,000 turned up missing.

6. Fake wills

In this scenario, the guardian claimed that Julie Sweeten desired to leave her estate to her bank. A forged will was entered into the record. Wachovia Bank trustee was then given $80,000 from the uncontested, probated estate.

Step Four: The mysterious deaths

Once the funds have been spent, the “ward” oftentimes suddenly dies.

The “ward” dies when there is still plenty of money — if a huge probate battle can commence, thereby further enriching the attorneys and guardian.

Examples:

• Carlisle Bosworth died soon after his $250,000 had been spent.
• James Deaton — $5 million, three years in probate — $3 million in attorney’s fees with a pittance finally paid out to his family members.
• Louise A. Falvo — suspected morphine sulfate overdose as cause of death; huge probate battle to enrich attorneys ensued even though her bank accounts were all Pay On Death/In Trust For (POD/ITF) to her daughter, so probate should have been completely unnecessary.

NASGA, National Association to Stop Guardianship Abuse, has adopted a three part theme to succinctly describe the legally sanctioned exploitative guardianship process:

Isolate, Medicate, Take the Estate.”

Predatory guardians: How courts are allowing professional guardians/conservators to rob your assets

Examples:

• Marie Long was worth $1.3 million when she suffered a stroke and came under the “protection” of a professional guardian. Three short years later, she is penniless and subsisting off of a meager social security pension and Medicaid.
• Louise A. Falvo, 91, had accumulated nearly one million dollars when she was placed under a guardianship that was commenced with a forgery of her daughter’s signature by a probate attorney. Within three months, Louise A. Falvo was dead. Two and a half years later, the guardianship remains open. The guardian and her attorneys have, to date, been awarded by the judge more than $350,000.00 of Falvo’s estate — “to benefit the ‘ward'” — who is deceased.
• Corretta Brown was placed under guardianship when the Department of Children and Families discovered that her home was uninhabitable. Today, Brown is deceased, her assets have disappeared (more than $100,000), and all of her debts — totaling more than $75,000 in nursing home costs, remain unpaid. The professional guardian, it was discovered, was not licensed and has since fled the state of Florida with Brown’s assets.
• Marie Sandusky signed a power of attorney to guarantee that her beloved daughter, and not her rejected son, would manage her financial affairs and health care directives. Today, Sandusky has a court-appointed guardian who has spent more than $300,000 of Sandusky’s money in attorney’s fees. The reason? Sandusky’s rebuked son hired an attorney and together they made false allegations against Sandusky’s beloved daughter. As the “wheels of justice” move forward, Sandusky’s money is legally used to fund the frivolous feud.
• Debra Duffield, 58, has been under the control of a professional guardian for the last four years. She was only 54-years old when an involuntary guardianship was petitioned against her by a professional guardian who gleefully discovered (tipped off by a social worker) Duffield’s substantive worth when Duffield was hospitalized for anorexia and a broken hip. During the last four years, the vast majority of her assets have been converted to attorney and guardian fees. Duffield, who was diagnosed as merely bipolar, had allegedly been financially exploited by a friend — hence, the rationale for the guardianship. She is confined to a nursing home without rehabilitation. She sits in a bed, smelling of urine and fecal matter, watching television. The guardian and her attorney regularly and steadfastly bill her account for merely “reading her file” or checking on the latest whereabouts of her former girlfriend. Soon, Duffield, who once owned a fabulous house complete with expensive antiques, valuable imported rugs and fine paintings, will be penniless.

When you hear the word “professional guardian,” what do you think? Do you think of someone who protects the elderly? Assists them with their daily needs? Guarantees they are protected from financial exploitation and physical neglect?

Think again.

The pristine image of professional court-appointed guardians who allegedly protect the elderly is being challenged. Grass root organizations, such as the National Association to Stop Guardian Abuse (N.A.S.G.A.) and Advocates for National Guardianship Ethics and Reform (A.N.G.E.R.) are claiming that professional guardians, their attorneys — and even judges — need to be watched.

May 25, 2010. Latifa Ring of Elder Abuse Victims Advocates addressed the Committee on the Judiciary, Subcommittee on Crime, Terrorism and Homeland Security stating, “… exploitation in guardianships is rampant. It is largely kept out of the public eye under the guise of ‘protection.'”

“Family members are portrayed as “Osama Bin Laden” or the devil incarnate,” David Newman said, a guardian reform advocate.

These “unproven and often false allegations” commence a flurry of legal activity that can only be likened to Charles Dickinson’s Bleakhouse. While family members are forced to spend thousands of dollars defending themselves against the false accusations, these same accusers — oftentimes, the professional guardians– handsomely profit from the legal havoc they create.

The guardians need to be watched

Take, for example, the recently widely publicized case of Clay Greene and Harold Scull, a gay couple who had cogently cohabitated together for more than 20 years, rendering mutual durable powers of attorney, wills, and other legal declarations upon one another. When Scull, 89, unexpectedly fell onto a stone patio, paramedics were called and the local sheriff department hastily alleged that Greene had intentionally shoved Scull to the ground. Yet, despite the fact that all charges were subsequently dropped, the public guardianship office for Sonoma County used the already disproved physical abuse allegation to commence an involuntary guardianship against Scull. Scull was removed to a nursing home, isolated him from Greene, and the couple’s jointly owned property which included valuable paintings, expensive Persian rugs, antiques, silverware, jewelry, and real estate — was sold for far less than appraised value — at least according to the court records. It was later discovered that the items had been sold for far more by the public guardianship office.

These types of guardianship irregularities have sparked a guardianship task force Special Committee on Aging, which reported, “…guardianship…has the potential of harming older adults rather than protecting them…The…continuing reports of the failure of courts…to prevent [financial] exploitation of incapacitated adults by their guardians have long been of concern to this Committee.”

Greene sued the public guardianship office who settled with him for approximately $600,000.00 just days before trial. Amy Todd-Gher, Greene’s attorney, stated:

“This victory sends an unmistakable message that all elders must be treated with respect and dignity…and that those who mistreat elders must be held accountable. [But] Even as we celebrate this victory…we are deeply troubled that the Sonoma [County] continues to refuse to take responsibility for their egregious misconduct…We urge every citizen…to demand more oversight of the Public Guardian’s office. They need to be watched.”

An alarmingly common practice

Is elder financial exploitation by professional guardians and their attorneys a commonplace occurrence? According to John Caravella, a former detective and office manager for Seniors vs. Crime, a special project of the Florida Attorney General’s Office, Gainesville, Florida, the answer is “Yes.”

Caravella became simultaneously intrigued and disturbed by the court-sanctioned practices of professional guardians on their “wards” (the legal term dubbed to those who have lost all of their civil rights under court-mandated guardianship) when one of his neighbors mysteriously disappeared shortly after receiving an inheritance of more than a quarter of a million dollars. The neighbor, referred to as “Adelle” in Caravella’s book, Marked for Destruction, had been falsely induced by a stock broker, whom she had consulted about her fledgling inheritance money, to sign papers that authorized a professional guardian and her attorney to manage Adele’s finances — if she should become mentally incapacitated. Within a few weeks, the guardian and her attorney petitioned the court alleging that Adele was not competent to manage her own affairs. The court authorized that she be stripped of all of her civil rights and placed in a nursing home. Soon thereafter, Adele’s recently acquired $250,000+ was quickly consumed by the attorney and guardian for “professional services” fees. And Adele soon passed away.

How it all begins

Kevin Gallagher had a trusted, longstanding pact with his beloved parents: When the time was “right,” he would make arrangements for their safe return to Maine where they would reside in assisted living. That “right time” came unexpectedly one day after Sunday services when Robert and Elsa Gallagher became slightly disoriented in traffic when they happen chanced upon orange cones in a road detour. Kevin and Lisa, delighted to hear that their parents were ready to journey home, began making all of the necessary arrangements. Kevin even phoned his estranged Orlando-based sister, Lori, and asked if she would simply “telephone” Mom and Dad during the interim. The sister, however, consulted the Yellow Pages and telephoned a company, Geriatric Care Management, that specializes in elder care.

The sheriffs arrive

Within 48 hours a professional guardian, and owner of the elder care company, arrived at the Gallagher’s doorstep with a court order and two deputy sheriffs. She had hastily petitioned to become the couple’s “emergency temporary guardian” after learning of their substantive assets. Upon her arrival, the couple were forcefully removed from their home and placed in separate nursing home facilities. Mrs. Gallagher, hysterical, secretly phoned her daughter-in-law, her speech slurred, crying for help. She had been forcibly administered psychotropic drugs. Three medical professionals quickly examined her while under the influence of the narcotics, and declared both she and her husband simultaneously 100% mentally incapacitated. The temporary guardian was then quickly appointed the permanent, plenary guardian.

The guardians first move was to encumber all of the couple’s assets.

The legal contest commences

Instead of making arrangements for their safe return home, Kevin Gallagher suddenly found himself furiously searching for Florida attorneys. Meanwhile, the guardian’s legal counsel quickly filed papers to block Kevin’s attempts at removing his parents from Florida to Maine. A hotly contested guardianship soon commenced with attorneys from both sides legally authorized to generously pay themselves from the Gallaghers’ assets.

“The story is always the same,” states Newman, a guardianship reform advocate. “A family member fights the guardianship; then the family member later ‘wins’ the contest — when all the assets have been spent in attorneys’ fees.”

Three years passed. Kevin found himself switching attorneys four times in an attempt to get the legal nightmare to stop

Then, suddenly, it did stop. Kevin was declared the winner of the contest.

All of the assets had been spent.

“They then placed my parents on a airplane with a single suitcase with a broken zipper,” Kevin stated. “Inside the suitcase were tattered clothes that had the names of other people in Magic Marker inside the clothes. Everything they had owned — even their clothes — had been sold or trashed by the guardian.”

Both Elsa and Robert died shortly after returning to Maine.

Family feud — or — an open invitation for fraud?

Corrine Branson, 82, had been happily living in Miami Beach with the daily assistance of a CNA when her grandson secretly petitioned the court to become his grandmother’s guardian. When Branson learned that she was to be moved into a nursing home, she quickly phoned her beloved daughter, aunt to the grandson, who had been granted a springing power of attorney many years before. Bonnie Reiter, with little knowledge of guardianships or guardianship law, quickly hired an attorney who suggested that a “professional guardian” be appointed during the interim legal contest.

It turned out that the guardian he suggested works with him on a regular basis. Reiter fired her attorney, hired another, and then moved for a court hearing which her mother planned to attend.

“Two weeks prior to the hearing, my mother ended up mysteriously dead,” Reiter stated.

The guardianship remained open after Branson’s death with Reiter, alone, having spent $130,000.00 in attorneys’ fees.

“They took more than $800,000 of my mother’s money in attorneys’ fees. The guardianship, in which my mother had never even been declared mentally incapacitated, lasted less than three months. This is a racketeering scheme that needs to be investigated. The F.B.I. should step in.”

Different names, same story

• An Orange County court auditor discovered $50,000.00 missing three days before the ward died. The judge ordered an “Order to Show Cause.” Prior to the hearing, the guardian and her attorney simply brought back the missing money and placed it back with the court. The judge dropped the scheduled hearing.
• Court records show that the guardian received $12,000 a month to pay the nursing home bills for Carlisle Bosworth. However, the skilled nursing home facility where he was placed charges only $6,000 a month. No investigation has ever been conducted regarding what happened to the extra $6,000 per month. Bosworth died shortly after all of his money had been spent.
• Marion Copley was placed on Medicaid — even though her guardian sold her home for more than $250,000.
• In another case a professional guardian petitioned the court to become an elderly woman’s guardian when she discovered the woman had no living relatives. She told the judge that the woman, who was still living independently in her home, had “bats flying all over the inside of the house.” The allegation resulted in a guardianship and the victim was removed from her home. Neighbors later stated that they had never seen “bats flying all over the house.”
• In yet another case a professional guardian obtained a guardianship over Christian Van Beekum stating that neighbors had exploited him. A quick search of the property records showed that the neighbors who had allegedly exploited Van Beekum had actually sold their home and moved to another state six years prior.
• James Deaton had owned an extensive coin collection, an expensive baseball card collection, and his deceased mother’s diamond rings and pearl necklaces, according to relatives. None of these items were ever listed on the guardian’s inventory report.
• The Denver Post has several times( 2010, 2011 ) published investigative reports exposing the problems with the probate court there.
• In July 2012 World News posted a video by Lisa Flurie and story about what has been done to her brother Mark in Florida probate courts. Links to many other stories of guardianship/conservatorship fraud are available there as well.

Law enforcement agents, social workers, and judges have been trained to maintain a watchful eye over exploitative family members. Yet no one seems to be guarding the guardians. Family members have complained to local law enforcement, the state attorneys’ office, and even the F.B.I.without any significant action being taken.

The problems grow worse with time as the courts become ever more dysfunctional.