Flashback: the FBI on guardianships, poa fraud

Policing the guardians: combating guardianship and power of attorney fraud
Mathis E. McRae
February 1994
The FBI Law Enforcement Bulletin
http://findarticles.com/p/articles/mi_m2194/is_n2_v63/ai_15267880/?tag=content;col1

People often envision robbery and assault by some unknown individual or physical or mental abuse by a known caregiver as typical crimes against the elderly. However, these are not the only cases of eider abuse. One area in which law enforcement has seen an increasing number of complaints is financial exploitation of the elderly through the mismanagement of their income and assets. These incidents usually occur when individuals are given legal guardianship or power of attorney over the victim’s finances.

This article discusses what constitutes guardianship and power of attorney fraud and the problems inherent in such cases. It also offers investigators and prosecutors advice in handling these cases. Finally, it suggests ways to decrease the number of financial exploitation crimes.

GUARDIANSHIP FRAUD

Appointed by the court, guardians generally provide care for individuals unable to care for themselves. This often means making decisions that affect every aspect of their lives, including their persons, property, and finances. The problem with this arrangement, as the Pepper Commission on Aging(1) points out, is that it follows an “all or nothing concept.” People judged incompetent lose all of their rights and seldom regain them, unless they can prove total recovery from the conditions that led to their being judged incompetent. This sometimes leads to individuals abusing their positions as guardians. In an attempt to correct this problem, the Florida Legislature created the Study Commission on Guardianship Law to investigate abuses and pinpoint deficiencies in Florida’s system, to receive public input, and to recommend changes in the law.(2) As a result, Florida now uses a flexible adjudication arrangement that allows the court to establish a guardianship tailored to the particular disabilities of the incapacitated person. Based on their capabilities, individuals can retain some of their rights, while surrending others. In short, the court may appoint an individual as a guardian of the person, the person’s assets, or both. Overall, this law allows for closer scrutiny by the court of the manner in which the ward’s assets are spent.

Law enforcement agencies sometimes add to the problems caused by these judicial constraints. They, too, may see power of attorney holders as having cart blanche over conveyors’ finances.

Law enforcement professionals need to recognize that individuals can be guilty of theft or exploitation of aged adults through the improper use of funds for their own profit, as well as through the misuse of a power of attorney. Once investigators and prosecutors realize this, they can turn their attention to the very real problem of proving wrongdoing.

PROOF OF THE OFFENSE

Suspects usually gain access to their victims’ bank accounts by presenting the power of attorney to the bank or by having their victims agree to have a second signature on the accounts in case of emergency. Therefore, proving financial exploitation usually requires accessing checking and savings accounts by subpoena or search warrant; retrieving canceled checks, statements, and items of deposit; and determining the flow of the alleged victim’s funds. If suspects clearly profit from using victims’ funds, and victims meet their State’s definition of aged or disabled, the issue becomes one of intent. That is, investigators must determine whether suspects intended to exploit victims or whether they believed, in good faith, that they had the right to use victims’ funds for that particular purpose. In most jurisdictions, if any evidence, however minimal, exists to prove that the exploitation was intentional, the court would allow a jury trial.

As noted, case law relating to power of attorney fraud places a higher burden of responsibility on guardians. They have the right and authority to serve their charges’ needs, not their own. Therefore, prosecutors who present the power of attorney into evidence should actually help the State’s case because victims, in conveying that power, place trust in defendants to act in their best interest. Use of Theft Statutes

In order to apply theft or theft-related statutes to guardianship and power of attorney cases, the prosecution must prove that defendants did not have victims’ consent to use their funds in the manner indicated. One difficulty prosecutors often face is the inability of victims to provide testimony. Victims may be deceased or physically or mentally unable to testify.

In its decision, the court noted that while proving nonconsent to the taking of property is a necessary element in a theft case, this lack of consent may be proven by circumstantial evidence. Further, even when victims apparently agree to allow others to control their finances, that consent is not effective unless, as a factual matter, it is voluntary and intelligent. The court found that the victim was not mentally competent to understand the nature of the joint bank account arrangements she had with the defendant, was not capable of giving valid consent, and therefore, the defendant had gained unauthorized control over the victim’s property.

UNDUE INFLUENCE

Gainer points to another problem that prosecutors face in financial exploitation cases. At times, evidence exists that victims consented to the arrangement; however, they lacked an understanding of the nature of the transaction, the meaning of the expenditures, or other circumstances which, had they known or understood, would have caused them to act differently.

While undue influence has been carefully explored in civil cases relating to financial transactions, it has rarely been applied in the criminal context, especially in theft cases. The closest analogy has been those States that use instances of coercion, undue influence, or victims’ lack of fully understanding transactions as evidence in exploition cases. Under such circumstances, most States require proof of victims’ limited capacity or ability to care for their own needs for them to meet the definition of aged adults. Further, there is often an age requirement, usually 60 or 65 years of age.(10)

OVERCOMING OBSTACLES

Education of incoming and current law enforcement officers must be enhanced. Officers need to realize that not all criminal activity is violent, that not all property is stolen in the night, and that documents need not confuse, but may incriminate and convict guilty exploiters.

The often-used phrase “the graying of America” accurately describes the shifting upward of the age of crime victims and the changing nature of the types of crimes by which they are victimized. Social service agencies, law enforcement agencies, and prosecutors must communicate and work together in order to make progress against this type of criminal activity.

Endnotes

1 Pepper Commission on Aging, Master Plan on Aging for Florida, vol. 1, Part A, September 1990.

2 Ibid.

3 The Florida law previously referenced refers to the misuse of a power of attorney as one means in which the crime of exploitation may be committed. See FLA. STAT. Sec. 415.102(9)(1973).

4 See, e.g., FLA. STAT. Sec. 415.111(5)(1993).

5 State v. Dyer, 607 So.2d 482 (Fla. App. 2 Dist. 1992).

6 FLA. STAT. Sec. 415.102(1993).

7 State v. Cuda, 622 So.2d. 502 (Fla. App. 5 Dist. 1993).

8 FLA. STAT. Sec. 415.102(9)(1993).

9 Gainer v. State, 553 So.2d 673 (ALA.CR.APP.1989).

10 See, e.g., FLA. STAT. Sec. 415.102 (3)(1993).

Bibliography for: “Policing the guardians: combating guardianship and power of attorney fraud
Mathis E. McRae “Policing the guardians: combating guardianship and power of attorney fraud”. FBI Law Enforcement Bulletin,The. FindArticles.com. 23 Mar, 2010. http://findarticles.com/p/articles/mi_m2194/is_n2_v63/ai_15267880/

Share
News