Wealth and Honor

Helping Families Navigate the Financial Challenges of Age Transitions

Category: Fraud and Abuse (Page 2 of 2)

Addressing the 800lb gorilla: Most financial scammers of the elderly are family.

October 24, 2019 /

A recent Barron’s article discusses ways in which adult children can protect their parents from financial fraud. Elder Financial Abuse is estimated to defraud older Americans of somewhere between the disparate estimates of $3Billion to $35Billion a year. The large disparity is due to the number of data sources, and estimations of unreported abuse, but suffice it to say, it is a problem.

While the elaborate means scammers take to defraud our aging parents of their resources are popular to write about, focusing on these threats ignores where 85-90% of defrauding takes place – within the immediate family of the victim. According to a report by the National Committee on Aging,

Over 90% of all reported elder abuse is committed by an older person’s own family members, most often their adult children, followed by grandchildren, nieces and nephews, and others.

Source: National Committee on Aging

My friend and colleague, Cynthia Healy, has years of experience investigating elder financial abuse, and she produced this short segment on family theft. Other resources can be found on her website gogrey.com.

The best way to address this 800 lb gorilla is to teach the virtue of honor in our family systems, and specifically how honor shapes the attitudes or actions that we take towards our elderly parents and/or their resources. Much of the familial elder financial abuse is subtle and occurs out of a sense of entitlement, the perpetrator justifying his actions under the guise of “mom won’t miss this.”

Still for those adult children who do honor their parents and their parents’ possessions, these articles offer practical and relational advice.

To help aging parents protect themselves, their grown children must tactfully broach the subject of their vulnerability. The key is to adopt an attitude of empathy and non-judgment, says Amy Nofziger, director of fraud victim support at AARP, an advocacy organization for older Americans. “Always start the conversation with empathy and compassion, and don’t be paternalistic,” she advises.

Source: Advisors Offer Precautions on Keeping Financial Scammers Away. – Barron’s

Prior Correspondence: A Key Tool in Preparing Your Estate Dispute Case for Trial | Estate Conflicts

September 25, 2019 /

Attorney Brett Hebert, with the national law firm, Gordon Rees, recently wrote an article on the firm’s blog regarding the admissibility of certain correspondence in estate litigation cases.

A typical situation we see involves an elderly person who begins to show signs of losing mental capacity. Then an unscrupulous person “enters” the life of the elderly person, begins to take “care” of the elderly person, and begins to “help” the elderly person with their finances and medical care. Then the elderly person’s estate plan (trust, will, power of attorney) “changes” dramatically to the benefit of the unscrupulous person (and to the detriment of former beneficiaries). As a result, the former beneficiaries of the elderly person begin to ask the unscrupulous person about the changes. The unscrupulous person may send correspondence in return. The elderly person may correspond with the former beneficiaries, too.

These communications typically come in the form of emails, texts, and letters. Sometimes, people post on social media about the disputes. There may even be voicemails or handwritten notes. All of these items are potentially relevant to the dispute and subsequent litigation.

If you suspect that a loved one may have been influenced by someone with ulterior motives, retention of any correspondence with that person or with the possible victim could be beneficial to your case.

Source: Prior Correspondence: A Key Tool in Preparing Your Estate Dispute Case for Trial | Estate Conflicts

5 Indicted in Identity Theft Scheme That Bilked Millions From Veterans 

September 23, 2019 /

Representing a new low in criminal identity theft, five people were indicted in a scheme that targeted older and disabled veterans. For a period of five years, the criminals used personal information to “withdraw or reroute millions of dollars in disability benefits and other payments made to veterans. The stolen funds were later wired to the bank accounts of so-called money mules and laundered so that they could not be traced.”

Click image for full text of the article.

Attorneys Suspended for Mismanagement of Elderly Clients Money

August 23, 2019 /

In a case that speaks of the importance of choosing a qualified trustee who has proper internal controls and procedures, and who is governed by an appropriate regulatory body, The Ohio Supreme Court suspends two attorneys for one year after they negligently managed an elderly woman’s affairs. Cleveland Metro. Bar Assn. v. Zoller and Mamone (Ohio, No. 2014-1389, Nov. 8, 2016).

The client, a widow of a former mayor of Cleveland and a former justice of the Supreme Court of Ohio, retained the law firm to administer the estate of her late husband. Having come to increasingly rely on the partners in the firm, the client later engaged the firm to manage her money, to pay her bills, and to handle other aspects of her financial and personal life. The client sought to be able to live independently in her own home, to afford around-the-clock care, and to make generous gifts to her family members and charitable causes.

In it’s findings, the court stated:

[The Respondents] assumed the responsibilities of operating and maintaining the special account when they opened the account and agreed to be authorized signatories. But they failed to ensure that the account was a separate, interest-bearing trust account for [Client’s] benefit during the six-year period in which substantial client assets passed through it. They also failed to maintain even a modicum of oversight over the account by failing to accurately record each transaction that affected the account and failing to reconcile the account against the monthly statements issued by the bank. Their abdication of these most basic duties to [client] resulted in more than 30 overdrafts of the account and $1,000 in associated bank fees. Respondents’ failures to act also facilitated the misconduct of their father, [name removed], who not only wrote and signed checks on the special account (even though he was not an authorized signatory) but who also collected excessive and undocumented legal fees from [client]—fees that averaged approximately $55,000 each year for six years, though more than $250,000 of those fees was actually collected in just the first two years of the representation.

For the full text of this decision, go to:

 http://www.supremecourt.ohio.gov/rod/docs/pdf/0/2016/2016-Ohio-7639.pdf

The Case Files – Episode 1: “Fool me once, shame on you…”

August 19, 2019 /

Wealth and Honor is a website dedicated to helping families navigate the financial challenges of age transitions. The site now has a YouTube Channel to host “edutainment” videos featuring non-legal commentary on actual court cases involving will disputes, elder financial abuse, estate litigation, fiduciary liability, and other issues of aging, death, and wealth.

Court transcripts are condensed into a factual summary with popular sitcom characters providing faces to the actual characters of the case, followed by a non-legal commentary of lessons to learn and missteps to avoid.

https://youtu.be/6gBLpiWQX9c
The Case Files Trailer

The first episode covers the case of Lintz vs Lintz, a 2014 case decided in the California Appeals Court, that includes claims of breach of fiduciary duty, elder financial abuse, undue influence, among other claims. Viewers are encouraged to first watch a presentation of commonly used terms before watching the case episodes.

For a full text of the court transcript, click here.

Senators slam abuse in nursing homes; criticize CMS over reporting requirements 

August 15, 2019 /

If there’s anything that will bring a bipartisan group of U.S. senators together, it’s the topic of abuse in nursing homes and a hearing Tuesday was proof yet again.Abuse deficiencies cited in nursing homes more than doubled in four years, increasing from 430 in 2013 to 875 in 2017, a Government Accountability Office report released Tuesday found. The most common physical and verbal abuse was by staff, at 58%, investigators said.

Source: Senators slam abuse in nursing homes; criticize CMS over reporting requirements – McKnight’s Long Term Care News

Disbarred Georgia lawyer admits stealing almost $400,000 from elderly clients 

August 6, 2019 /

A former Acworth, Georgia lawyer who stole hundreds of thousands of dollars from elderly clients is already out of jail, released the same day he pleaded guilty and was sentenced by a Cobb Superior Court judge.

A press release by the Cobb District Attorneys’ office said Cheatham is never allowed to practice law again, nor can he ever act as an agent, trustee or fiduciary, or work in any position where he is responsible for the care or finances of another person.

Source: Disbarred Acworth lawyer admits stealing almost $400,000 from elderly clients | News | mdjonline.com

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