Combatting Elder Financial Abuse

Combatting Elder Financial Abuse,” that is the subject of today’s ACTEC Trust and Estate Talk.

Transcript/Show Notes

This is Travis Hayes, ACTEC Fellow from Naples, Florida.

Elder financial abuse is the crime of the 21st century. The National Council on Aging reports that the loss to seniors from financial abuse 36.5 billion per year. It’s also an underreported crime. A 2023 AARP study shared 87.5% of elder financial abuse cases are never reported. As estate planning professionals, it’s a crime that we need to understand and be on the watch for.

ACTEC Fellow Julia Meister of Cincinnati, Ohio, is joined by guest Charles Golbert of Chicago, Illinois, to discuss this important issue. Charles is the public guardian for Cook County, Illinois, and his office serves as guardian for approximately 700 wards who are mostly older individuals with disabilities and manages more than 100 million in diverse state assets. Welcome, Julia and Charles.

Julia B. Meister: Thank you, Travis.

Financial Exploitation of Seniors and People with Disabilities

As practitioners, most of our direct experience with elder financial abuse is in civil litigation settings. But there is another facet of combating elder abuse in the legal system that we can discuss with you today, thanks to the participation of our guest, Charles Golbert of the Cook County, Illinois, Office of Public Guardian. Charles participated in a professional program with us at our ACTEC 2024 Fall Meeting in Chicago. And today is a capsule of the insights he offered to us at that time.

And so, Charles, as Travis mentioned, financial exploitation of seniors and people with disabilities is an exploding problem in our society. Are the national statistics that Travis cited consistent with what your office sees? And if so, what is your office doing to address this problem?

Charles P. Golbert: Thank you, Julia. The national statistics that Travis cited are definitely consistent with what our office is seeing. In fact, about half of all of our new intake cases have at least some issues of abuse or neglect or financial exploitation. And in fact, about 40% of our cases have issues specifically about financial exploitation.

To address this problem, our office started an innovative financial recovery program. It’s staffed with three senior lawyers, and their full-time practice is complex litigation to recover money that had been stolen from the people we served before we were appointed to protect them. And the program has been very successful. Over the past 15 years, we’ve litigated more than 160 cases, and we’ve recovered more than $50 million, that’s 5-0 million dollars, on behalf of the people under our guardianship. And then we’re able to use that money to care for the individual.

Based on the number of cases litigated and amounts recovered, we believe that ours is one of the largest, if not the largest, financial recovery practices of its kind in the country. And we also try to use that practice to call attention to and raise public awareness of this problem. A number of our cases have received here in Chicago and Illinois. Some of our cases have received national publicity. And a few of them have even received international attention.

Julia B. Meister: Thank you. Could you share with us an example of one of your office’s financial recovery cases, please?

Financial Abuse of Individuals with Dementia

Charles P. Golbert: Yes, I’ll share the story of Grace Watanabe, whose case received extensive national coverage. Mrs. Watanabe was born in the United States and was always a United States citizen. But despite that, when she was a girl during World War II, she and her whole family spent time in the Poston Internment Camp in Arizona.

And after the war, she finished school, and then she came to Chicago for college. And then she was a career civil servant with the federal government. And she was always frugal and disciplined about savings and acquired about a million dollars for her retirement. And she moved back to Chicago, and she outlived all of her family; she never married, and she never had children. And then when she was in her 80s, she had a fall and realized that she needed help with her care. And so she moved herself into a place called Symphony. It’s a part assisted living and part nursing care. And she was doing well there until she developed dementia in her 90s.

But when she got dementia, the staff there started to plunder her savings, and they stole about $750,000, almost all of her life savings. And eventually, her bank got suspicious, kind of a day late and a dollar short, or I should say a few months late and $750,000 short, but they eventually called our office, and we became Mrs. Watanabe’s guardian.

We moved her out of Symphony. We moved her to a safe nursing home, and we sued the individuals at Symphony who stole her money and the corporation. And the people who stole her money, they did so by writing checks to themselves. They had access to her checking book, and they just started writing checks themselves for $50,000, $25,000, until it added up to $750,000. And something that was really interesting and to me inspiring about the case is her case got publicity, and Mrs. Watanabe really became a cause celeb in the Japanese American community. Every single court case, even if it was just an agreed continuance, dozens of people from the Japanese American community showed up to show their support. And they would send her holiday cards and birthday cards. They sent Japanese food products to her in her nursing home. They came visited her. It was really something to see.

And Symphony really dragged the case out as much as they could. In my opinion, it was a strategy that they thought maybe if she died before there was a recovery, they’d be off the hook. And she, in fact, did die at age 100. But Mrs. Watanabe had a will and left her money to two prominent charities who took over the litigation when she died. And shortly after she died, they obtained a sizable recovery. So Mrs. Watanabe actually never saw the money recovered, but the charities that were meaningful to her and important to her ended up getting the money.

Actions Law Enforcement Can Take to Address Financial Elder Abuse

Julia B. Meister: Thank you. Well done. Can you tell us about your work with law enforcement to obtain criminal prosecutions of elder abuse offenders in addition to civil recoveries?

Charles P. Golbert: Yeah, I’m a believer that these cases, full justice in these cases, require both civil recovery of the money stolen and also criminal prosecution of the offenders. So, we always try to work with law enforcement, and we do our depositions. We get all the discovery, get all the bank records, we do the spreadsheets tracing where all the money went. And then we turn this all over to law enforcement. However, it’s been our experience that sometimes law enforcement’s not as aggressive about these cases as we would like to see it be. We’ve had cases where we did all the work, turned it all over, all the depositions, everything, and they don’t do anything. And in fact, Mrs. Watanabe’s case is a good example of that.

And so sometimes we’ve actually done press conferences. Why are there no criminal charges in these cases? And we did that in Mrs. Watanabe’s case, and her case is a particularly sympathetic case, and right after the press conference, guess what, there were criminal charges filed against two of the thieves, and they got convictions.

Misconduct by Attorneys That Lead to Elder Financial Abuse

Julia B. Meister: Do any of your financial recovery lawsuits involve misconduct by attorneys?

Charles P. Golbert: Yeah, unfortunately a good number do. To give you an idea, I mentioned that over the past 15 years we’ve litigated about 160 cases. 39 of those cases — so nearly a quarter — involved the misconduct of a lawyer that was of such a high level that we felt the need to report that lawyer to the Illinois Bar Disciplinary authorities.

In a small number of those cases, the lawyer was actually the crook, the lawyer was actually the exploiter. But in many more, in the majority of the cases, the lawyer was not the crook, but the lawyer’s malfeasance enabled exploiters to use the lawyer’s documents that the lawyer prepared to steal from the individual. And those cases seem to fall under four broad categories:

• One is the lawyer didn’t understand who their client was. They thought that the daughter who came in with her father, who had dementia, is the client and they did what the daughter wanted without talking to the father, whose money was actually at stake.
• The second fact pattern is the lawyer ignores obvious red flags that the client has diminished capacity or is being unduly influenced and proceeds to prepare documents anyways that the person cannot understand.
• The third broad fact pattern is the lawyer represents a client who is a fiduciary, like a guardian or an agent under a power of attorney, who’s acting contrary to the best interest of the principal or is even stealing from the principal.
• And the final fact pattern is in PI (personal injury) cases, the plaintiff- the victim- is somebody under cognitive disability, and the PI lawyer obtains a settlement or a judgment and either just gives it all to the person with cognitive disability who isn’t able to manage it or spend it, or the PI lawyer gives it to a family member without any guardianship or bond or any type of protection in place, and the money is not used the victim as the cognitive incapacity.

Example of Recovering Finances After Elder Fraud

Julia B. Meister: Could you share some particular examples of the types of cases involving lawyers that you were just mentioning.

Charles P. Golbert: So I’ll share the case of somebody I’ll call “Jane”; that’s not a real name I’ll call her Jane. She was 94 years old. She never married. She had no children, and she was isolated in the community and had advanced dementia. And Jane was very religious and had gone to her neighborhood church regularly for years, and she had a relationship with a priest at that church. And when Jane became homebound, the priest would go to her home confession and to give her communion, so forth. but when Jane developed dementia, the priest was somehow able to find a lawyer who agreed to prepare documents Jane’s home in a trust with the priest as the beneficiary. And the priest also got a power of attorney for property that was used to steal Jane’s savings accounts. And the lawyer never met with Jane in doing so. The lawyer only met with the priest. And in his deposition, the lawyer admitted that he knew that Jane had dementia. And even more remarkably, during the course of discovery, we came to learn that that same lawyer had prepared estate planning documents for at least three additional older clients with dementia that were then used to plunder the savings of those three additional people in addition to Jane.

So we ended up getting the documents involving the house invalidated and we recovered most of the stolen money, but only after lengthy and expensive litigation. And we also reported the lawyer to the Illinois disciplinary authorities and he was suspended for a minimum of one year and until further order of court, but he ended up retiring during that period, so he never practiced law again.

Then in a second case, I’ll call the person “Jean”. He was paralyzed after a stroke at age 75 and a coworker able to find a lawyer to prepare a power of attorney for property, naming the coworker as agent, and a quick claim deed giving Jean’s home to the coworker, and also at will, naming the coworker’s beneficiary.

And the coworker took this power of attorney and used it to steal $133,000 from Jean’s bank accounts, which represented the totality of his life savings. And if this coworker had stopped there and just waited until Jean died to take his house, probably no one would ever have learned of his misdoing, but he decided to try to evict Jean from his own home so that he could sell the house. Neighbors got suspicious, and neighbors called the police, and the police called us, and we became Jean’s guardian. And we sued lawyer, and we were able to get the documents involving the house and invalidated so that Jean could continue living there, and so the eviction case went away as a result. And the coworker was judgment proof, but we were able to recover $75,000 from the lawyer’s malpractice carrier. And we also referred this lawyer to the Illinois Disciplinary Board, and the lawyer was disciplined. So those are a couple of examples. Thank you.

Travis Hayes: Thank you, Julia and Charles, for discussing important issues relating to elder financial abuse and bringing them to our attention.

Additional Resources:

• Tips for Dealing With and Drafting for Clients With Diminished Capacity (Feb 2024)
• Interacting With Clients and Beneficiaries When Determining Incapacity (Dec 2023)
• Marrying into Elder Abuse (May 2019)

 

Video Resources to Share With Your Clients:

• Tips for Seniors to Avoid Scams (May 2023)
• Understanding Special Needs Trusts (Feb 2023)

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