Senior Under Guardianship: Target for Fraud?

Sleazy schemes often target people at their most vulnerable. Perhaps the most vulnerable time in all of our lives comes in old age. At some point, older deed holders who want to manage the value of their property become likely to lose the capacity to do so.

One legal mechanism for carrying out an impaired person’s business is the power of attorney. But if that’s not in place or doesn’t go far enough, a court appoints a guardian.

Guardians have a duty to act in their clients’ best financial interests. Now and then, though, judges pick guardians who prioritize their own interests.

Scenario 1: When a Judge Is Conflicted

Here’s an example that unfolded about a decade ago, and matters to this day. That’s because The Palm Beach Post reported on the judge’s conflicts of interest in the case, and the investigative report led Palm Beach County to change its rules for guardianship.  

Julian Bivins claimed that his father, Oliver from Texas, was “held captive” by the guardians picked by the Florida judge. Oliver was on a visit to Florida when the court imposed the guardianship. The judge’s spouse was a professional guardian, and the newspaper reporters sensed a bias.

Julian was still the personal representative for Oliver’s estate, and could sue. It was the jury who awarded $16.4 million.

The jury found that the attorneys failed to get appraisals on Oliver’s two luxury homes in New York City, which were distributed to heirs. The home Julian got was worth millions less than the other. Jury members found that the attorneys breached their fiduciary duties while mishandling Oliver’s properties and racking up $1 million in fees.

Since the case unfolded, Florida Supreme Court Justice Jorge Labarga convened a guardianship task force. And Florida’s lawmakers created an Office of Public & Professional Guardianship.

Scenario 2: When a “Helping” Firm Hurts

In New Mexico, a guardianship firm’s founders embezzled money from trust accounts for decades, enriching themselves with Caribbean cruises, a Mercedes Benz and an RV. Just last year, Ayudando Guardians, Inc. and founders Susan Harris and Sharon Moore were indicted on charges of conspiracy, mail fraud, money laundering, and identity theft. Federal agents recovered nearly $5 million in the case.  

Ayudando—“helping” in Spanish—specializes in disabled vets and special-needs clients. The firm violated these people’s confidence and looted their accounts. The spouse of one of the founders worked as a professional guardian.

By the time the case opened, the Albuquerque Journal had begun a series of articles that questioned a lack of oversight and transparency in the guardianship system. New Mexico has since taken on the task of reform. Last spring, the state Supreme Court adopted  its “bill of rights” for adults under guardians’ care.

Scenario 3: When Guardians Become Controllers

In 2019, Dr. Medhi Saghafi sued an Ohio court. He claimed the court had trapped his spouse in an unnecessary, unwanted guardianship.

Saghafi said the family was qualified to care for the woman, who had dementia. The court denied the family’s requests and placed the senior in a guardianship.

Saghafi says the guardians forced the couple to get a divorce. Then the court issued a Qualified Domestic Relations Order, directing Saghafi to hand over some $3 million to the guardians. According to legal filings, Saghafi said the guardians caused multiple legal and financial problems—then billed Saghafi to address the problems they’ve created.  

States have taken notice, and a number of legal proposals are receiving attention. States continue to work on the issue, but fraudsters aren’t done by a long shot.  As we go to press, a headline has just come out: Michigan judge charged in scheme to steal from incapacitated adults. Some of the implicated guardians are accused of diverting funds from seniors in nursing homes.

Another Reason for Deed Holders to Plan Ahead

Most guardians take their duties seriously. Some do not. Deed holders need to know that greedy attorneys do exist. So do shady professional guardians, judges that help them, and even nursing homes that try to assert improper control. The best thing individual deed holders can do to shield their assets? Plan ahead. Plan when you can speak authoritatively about the way you want your assets handled. Bring relatives on board with the plan. A reputable estate planning lawyer in your home’s state can guide you. Free or low-cost elder law assistance may be available in your area.