NEW YORK (MainStreet) — Palm Beach County in Florida has long been a haven for the wealthiest retirees. With some 22% of 1.6 million residents aged 65 and older, it’s no wonder the county clerk established a guardianship fraud unit three years ago.
“When the economy started going down in 2008, we expected to see an increase in criminal cases,” said Sharon Bock, who was elected clerk of the circuit court in 2004. “Instead, we noticed an uptick in guardianship and probate court filings.”
A guardian is typically court appointed to make financial, medical and quality of life decisions for an elderly person who becomes a ward of the state.
Currently, the county has 2,800 open guardianship cases on file, and between 2009 and 2012 there was a 15% increase year over year. That was a red flag for Bock given that Florida has more elderly residents than any other U.S. state.
“I hired a certified fraud examiner with an accounting background and he began reviewing how court appointed guardians were spending the ward’s money,” Bock told MainStreet.
Fraud Examiner Anthony Palmieri discovered guardians were spending money on Botox, cruises and even latex surgery for themselves.
“We’ve seen double and over billing of guardianship fees, flat out hiding of assets and the creation of joint accounts with the wards,” Palmieri told MainStreet.
More than half a billion dollars are in the hands of guardians in Palm Beach County, and surprisingly 75% of those guardians are family members or neighbors vs. 25% who are professional guardians or lawyers.
“We found out that in most cases family members lack the education and expertise to be a guardian,” Palmieri said. “In many cases, the annual accounting documents they filed were questionable as to whether they were filled out properly.”
The National Association to Stop Guardianship Abuse is weary, however, of courts that bring in a third-party guardian without a due process hearing to address alleged financial abuse by family members.
“Family theft is often used to rationalize the appointment of a third-party guardian, and yes, some family members do steal from their elderly relatives," said Elaine Renoire, president of the National Association to Stop Guardianship Abuse in Indiana. "However, it is also true that other family members are often pushed aside based solely on allegations or innuendos of theft without any formal police charges or proper investigation."
Launched in September 2011, Bock’s Guardianship Fraud Hotline required a judge’s administrative order, because Florida statutes didn’t grant clerks the authority to create enhanced guardianship fraud programs.
“We know these guardianship fraud programs are effective, because we’ve seen real results in Palm Beach County,” said Bock.
So far, the fraud unit’s investigations have led to two arrests and uncovered more than $3 million in questionable expenses and misreported assets.
“While most guardians do have the wards’ best interests at heart, our guardianship audits are an added layer of protection for Palm Beach County residents,” Bock said.
Michelle Kenney, who worked as a guardian in the Southern Florida counties of Broward and Palm Beach until 2006, before Bock’s guardianship fraud hotline had been established, has seen the effects of elder abuse first hand.
“The hotline is not a cure-all, but it's something,” Kenney told MainStreet. “Now that they are requiring background checks on the front end, it will help reduce appointing guardians that shouldn't be serving to begin with.”
County judges often refer suspicious cases to the fraud unit; however, anyone who suspects a guardian, family member, attorney or caregiver of improper financial activities such as stealing money from a ward’s account, selling off a ward’s property or making suspicious loans or money transfers is urged to call (561) 355-FRAUD or email firstname.lastname@example.org.
“We’ve been trending 150 calls a year,” said Palmieri. “Some complaints are actionable, and others aren’t.”
--Written by Juliette Fairley for MainStreet