Task Force Fights Back Against Elder Financial Abuse

The first financial exploitation case Jennifer Taylor ever litigated involved a senior citizen who ended up in a nursing home after a fall.

The woman's granddaughter came to see her and persuaded her to sign over power of attorney, then packed up the woman's jewelry and antiques and emptied her bank accounts before heading south.

The victim "was left in a nursing home, recovering and wanting to go home," said Taylor, an attorney at Legal Aid of West Virginia. Another family member was dispatched to the victim's home to ready it for her return, only to find the locks had been changed and the house emptied.

By the time authorities caught up with the woman's granddaughter, the victim's nest egg was much smaller. Though they were able to recoup the stolen stocks, bonds and other valuables, a lot of the victim's money had already been spent.

"It's a very big issue," said Taylor, who also maintains her own solo practice. "Nationwide, financial exploitation is the fastest-growing silent crime in the country. It costs consumers across the country over $5 billion per year."

The National Adult Protective Association says elder financial exploitation is a fast-growing form of abuse targeting seniors and adults with disabilities. Most often, it's a trusted family member or caretaker who diverts the victim's assets to their own use.

"You'd be amazed at the people who put mom in a nursing facility and then take the money and run," Taylor said. "That's how it first came to my attention: People were placing their parents, their siblings and even their kids in nursing homes and not paying their bills. Then, when you dig into it, you find out they're living off mom's Social Security and pension, using it to pay their own bills (instead of) paying for mom's care."

'A Real Problem'

Taylor joined Legal Aid as ombudsman attorney in 2013, representing individuals in nursing homes and long-term care facilities.

"It took me only a few months to realize there was a real problem," she said. "Since then, on average, I've opened 30 new cases a year - and that's just the people in long-term care facilities. It's such a problem Legal Aid obtained a (Victims of Crime Act) grant, a federal grant, and we have a new, full-time attorney who's joined me in doing nothing but financial exploitation. It's opened to anybody who is a victim of financial exploitation, not just longterm care patients."

A 2011 MetLife study of elder financial abuse found most victims were between the ages of 80 and 89, lived alone, "and required some level of help with either health care or home maintenance." Women were nearly twice as likely to be victimized as men.

"In almost all of the cases, there existed a combination of tenuous, valued independence and observable vulnerability that merged in the lives of victims to optimize opportunities for abuse by every type of perpetrator - from the closest family members to professional criminals," the study concluded.

The West Virginia Financial Exploitation Task Force characterizes exploiters as criminals, "but sadly they are also often friends, family members or others that victims thought they could trust." If the victim gives the person power of attorney rights, "the exploiter has legal access to the funds as the resident's agent, but has a duty to use the money for the victim's benefit."

"A power of attorney is not a license to steal," said Suzanne Messenger, ombudsman for the West Virginia Bureau of Senior Services and Acting Chair of the task force. "The power-of-attorney representative sometimes forgets the person that gave them that power of attorney didn't evaporate the moment they signed it.

"There are plenty of folks who gave someone their power of attorney who still have the ability to manage their money, and even if they don't, they should still be (kept in the loop). At the very least, when you're spending someone else's money, it should be spent on that person's behalf and not on behalf of the agent."

Harsher Penalties

Taylor said the Legislature is trying to change the culture. Last year, for instance, lawmakers passed two bills aimed at curbing elder financial exploitation: One of the 2016 laws makes financial exploitation a standalone crime; the other allows authorities to bring a civil action to recover treble damages for victims of financial exploitation.

"Instead of being (classified) as a larceny or theft, it is the crime of financial exploitation now," Taylor said. "It carries substantial penalties.

"The second bill, allowing a civil action for financial exploitation, (was passed) in hopes that private attorneys will be more interested in taking these cases - it not only allows for recovering damages, but ... if the (exploiter) had power of attorney and was in a fiduciary position of trust, (the victim) can get treble damages, plus attorney fees. I've seen it work successfully, just the threat of it."

Taylor said in that one instance, a woman entrusted power of attorney with a family member who ended up withdrawing a huge sum of money from her bank account. When they caught up with her, "we showed her the new law and told her since she was acting in a fiduciary capacity, we can go after $600,000 in damages. She anted up the $200,000 very quickly."

She said in some cases, the misappropriation of funds starts small. If it goes unnoticed, the thief becomes emboldened.

"They may think mom won't mind if I use her money to make my own car payment. Then when mom didn't catch it that month, they do it again," Taylor said. "Next thing you know, mom's money is being used to take care of all their bills.

"We had one lady who 'accidentally' used her mom's money to fly to New York, see two Broadway shows, stay at the Marriott at Times Square and shop all over Manhattan while Mom was in a nursing home with Alzheimer's. She got caught, and we got some of the money back, but not all of it."

In the final days of the 2017 legislative session, lawmakers passed what Taylor refers to as a "disinheritance bill." It, like the legislation making financial exploitation a standalone crime and allowing authorities to pursue treble damages, was proposed by the West Virginia Financial Exploitation Task Force.

"What this one does is very much like the slayer statute: If you murder someone, you cannot inherit," she said. It's still awaiting the governor's signature, but when that happens, an individual convicted of financially exploiting the old or disabled will not be able to inherit without the victim's approval.

Lawmakers also passed a money laundering bill that gives prosecutors the tools they need to seize funds or assets, including those purchased with stolen funds, to reimburse victims of financial exploitation and certain other crimes.

"Our Legislature, particularly the Seniors Committee, has been very receptive," Messenger said. "I think they recognize financial exploitation is a national problem, and it's a problem here in West Virginia; they're prepared to do what has to be done to give people the tools they need to respond to it."

Speak Up

For once, the Mountain State isn't bringing up the rear on this issue. If anything, Taylor said West Virginia is showing other states innovative ways to address financial exploitation through its Financial Exploitation Task Force - and doing it without a brick-and-mortar office, a paid staff or state funding. WVFETF is an all-volunteer panel of concerned professionals meeting quarterly to find ways to protect vulnerable adults.

"We were actually invited to speak before the Federal Trade Commission last November," she said. "They were interested in the Financial Exploitation Task Force and the legislation we proposed. The chairman said we were in the forefront on this ... they were absolutely flabbergasted we could do so much with so little. We told them, 'It's West Virginia; we have people who care.'

"We bring in all the stakeholders: medical professionals, nursing home administrators, bankers ... everybody affected by it sits down and talks about the problems we have and how we can fix them. It's been very successful."

Taylor also points out that seniors aren't the only victims.

"I've seen it happen to people as young as 45, all the way up," she said. "You've got to be prepared. I can't emphasize enough the importance of that. You need to be careful who you trust with your medical power of attorney and durable power of attorney. Just because they're your son or daughter or cousin doesn't mean they'll do the right thing for you.

"There's also a new trend - that's to make sure you provide some accountability or oversight. For example, when I draft a power of attorney or durable power of attorney, I put in there that the agent has to account to a principle every six months or upon request ... they have to take the books to a lawyer, an accountant, a banker or some other family member

- just a third person who can look things over every six months or every year. Hopefully, they'll (do better) when they know someone is looking over their shoulder"

Taylor said the stakes are high: Just as with her Legal Aid clients, losses are typically well into the six figures.

"One year, it was $800,000," she said. "We had one case that had a $600,000 theft. That year, I think we recovered $200,000. Some of it we can recover. Some we can't. You can't make this stuff up - sometimes the case is so bizarre, you just shake your head."

But Taylor said the more people are aware of the problem and what to watch for, "the more they can report it and prevent it."

"Education is the key," she said. "We need to educate the public about how to protect themselves and also how to look out for their friends, neighbors and family members. Once people are aware of it, they can watch for it and know who they can report it to."

Legal Aid has income and asset restrictions, but Taylor said the organization refers those who don't qualify to attorneys who will take exploitation cases, some of whom are willing to work pro bono.

"One question a lot of people ask is if it's (happening) because of drugs," Taylor said. "I have maybe two or three cases a year involving people with a drug problem. I actually see more cases involving gambling than drugs - I have three cases right now where the (perpetrator) used the funds for gambling.

"Most often, it's just plain greed. It's the entitlement generation; they think, 'It's my inheritance.' Yeah, it's your inheritance, but it's not yours until grandma dies. But they think just because they're the children, the beneficiaries, it's their inheritance and they can take it now."