Financial Exploitation: A Form of Elder Abuse “OUR RESPONSE TO ELDER ABUSE LAGS 40 YEARS BEHIND CHILD ABUSE AND 20 YEARS BEHIND DOMESTIC VIOLENCE” - M.T

Financial Exploitation:A Form of Elder Abuse

“OUR RESPONSE TO ELDER ABUSE LAGS 40 YEARS BEHIND CHILD ABUSE AND 20 YEARS

BEHIND DOMESTIC VIOLENCE”- M . T. C O N N E L L Y

M A C R T H U R G E N I U S G R A N T F E L L O W A N D E L D E R A B U S E A D V O C A T E

http://photoblog.msnbc.msn.com/_news/2011/03/02/6173269-mickey-rooney-gives-passionate-testimony-before-congress

An Growing Population of Seniors

Between 2000 and 2030, the 65 and overpopulation will increase from 12.1 percent to 24 percent of the total state population (or about one in every four Minnesotans).

That equals a doubling of the older population from 600,000 to 1.2 million.

Between 1995 and 2025, theproportion of Minnesota’s elderly who are nonwhite will increase from 3.7% to 9.8%

An Doubling Population of Seniors

In the next 20 years…

Age of Minnesota Residents

Nearly 2.75 Billion Lost Per Year…

2 Main Types of Financial ExploitationBoth provide a “New Frontier” for Pro-Bono work and Poverty Law

Familial Exploitation

• Similar to Family Law• Emotionally Charged

Disputes (maltreatment, fights over money, many non-legal issues at play

• Need for Private attorneys and pro bono work

• Bar needs to continue to create creative strategies

Representative Case:State v. Campbell

Third Party Practices

• Similar to Consumer Protection Law• Bar needs to develop already existing

laws and statutes• Continued mix of legal services | pro-

bono | low bono | and fee generating cases for private bar

Representative Case:State of Minnesota v. American Family

Prepaid Legal Corporation et al.


State of Minnesota v. American Family Prepaid Legal Corporation et al. A11-1848

• Approx. 7 Million Awarded to the State for multiple violations of state consumer protection statutes

• Court focused on the Business-Model of the two interrelated companies and tactics used by different sales-representatives

• Tactics encouraged and taught in the Employee Handbook:• Isolate and pressure to make a decision that day – without

input from others

• Gain trust | always sit at kitchen table | always assume a sale and don’t allow time for consideration

• “You do not (and should not) say anything. Not even one word. Just start filling out the application…To be truly successful…at some moments you have to have the courage to just fill out the application”


Civil Laws – Deceptive Acts against Seniors and Disabled

PersonsSubd. 4. Private remedies.

A person injured by a violation of this section may bring a civil action and recover damages, together with costs and disbursements, including costs of investigation and reasonable attorney's fees, and receive other equitable relief as determined by the court.

Minn. Stat. § 325F. 71 SENIOR CITIZENS AND DISABLED PERSONS; ADDITIONAL CIVIL PENALTY FOR DECEPTIVE ACTS.

Violation of this section means:

Deceptive Trade Practices Act (Minn. Stat. § 325D.43 to 325D.48)Consumer Fraud Act (Minn. Stat. § 325F.68 to 325F.70)False Advertising Act (Minn. Stat. § 325F.67)


Un-Tested Legal Terrain

* Intersection of 325F.71 subd. 4 with the Public benefit test announced in Ly v. Nystrom 615 N.W.2d 302 (Minn. 2000)

Minn. Stat. § 325F. 71 SENIOR CITIZENS AND DISABLED PERSONS; ADDITIONAL CIVIL PENALTY FOR DECEPTIVE ACTS.

Civil Laws – Deceptive Acts against Seniors and Disabled

Persons

Protection and Prevention in Minnesota

Civil Laws – Vulnerable Adult Private Right of Action

Minn. Stat. 626.557 subd. 20Cause of action for financial exploitation; damages

Another way around Ly v. Nystrom…

The plaintiff must be a Vulnerable Adult as defined in 626.5572 subd. 21

Categorical Functional

Is in a care facility; OR Physical or Emotional Dysfunction

Receives certain at-home care benefits such as PCA hours

Impairs ability to care for oneself

Currently does not recognize many care benefits such as: SS disability or SSI; various mental health services designated

That impairment leads to maltreatment


Civil Laws

Financial Exploitation – 626.5572 subd. 9

(b) In the absence of legal authority a person:

(1) willfully uses, withholds, or disposes of funds or property of a vulnerable adult;

(2) obtains for the actor or another the performance of services by a third person for the wrongful profit or advantage of the actor or another to the detriment of the vulnerable adult;

(3) acquires possession or control of, or an interest in, funds or property of a vulnerable adult through the use of undue influence, harassment, duress, deception, or fraud; or

(4) forces, compels, coerces, or entices a vulnerable adult against the vulnerable adult's will to perform services for the profit or advantage of another.



Civil Laws -

Lots of opportunity for growth but need for collaboration because law is extremely

unpredictable

• Use in traditional legal services and other plaintiff’s litigation (Landlord/Tenant; Consumer Protection; Care-Facility Litigation)

• Use as a check on under-regulated industries that allow individual businesses to prey on vulnerabilities

Civil Laws – Vulnerable Adult Private Right of Action

Gold and

Coins

Medical Device and

Services

Financial Schemes

?


2 Main Types of Financial ExploitationBoth provide a “New Frontier” for Pro-Bono work

Familial Exploitation

• Similar to Family Law• Emotionally Charged

Disputes (maltreatment, fights over money, many non-legal issues at play

• Need for Private attorneys and pro bono work

• Bar needs to continue to create creative strategies

Representative Case:State v. Campbell


• Similar to Consumer Protection Law• Bar needs to develop already existing

laws and statutes• Continued mix of legal services | pro-

bono | low bono | and fee generating cases for private bar

Representative Case:State of Minnesota v. American Family

Prepaid Legal Corporation et al.


State v. Campbell756 N.W.2d 263 (Minn. App. 2008)

• 2 Brothers - Good Cop v. Bad Cop with Mom in the Middle• Characteristics of a Familial Exploitation Case

• Diminishing capacity of the Senior and accompanying difficult behaviors

• Bad Cop son Abuse of Power of Attorney• Estate Planning attorneys at center of the storm• Classic defenses: “It was gifted / she consented”

• Some Important Legal Precedent• Criminal Vulnerable Adult Financial Exploitation Statute is not

unconstitutionally vague• Fiduciary duty arises in context of joint bank account holders

Recognizing Fiduciary/Family Abuse

The Abuser The Senior

Often has financial issues Feels guilty

May have addiction issues: Drugs, Alcohol, Gambling

Believes they are helping and that the person can get better

May have other mental illness – Diagnosed or Undiagnosed / Treated or Untreated

Does not understand the depth of mental illness or how it works

“Sells” with stories Feels heard, comforted, and appreciated

Once in control – may use threats

Fear, anxiety, shame, isolation

Uses “Expertise” to confuse, shield activities, control the relationship

Trusts that the abuser knows more than they do

Some studies show upwards of 70% of financial exploitation comes from someone the Senior knows and

trusts

Friends

Family

Neighbor

“Drifters”

Professional: Real Estate,

Finance, Guardian,

Conservator


Civil Laws

Financial Exploitation – 626.5572 subd. 9

a) In breach of a Fiduciary obligation recognized elsewhere in law, including pertinent regulations, contractual obligations, documented consent by a competent person, or the obligations of a responsible party under section 144.6501, a person:

(1) engages in unauthorized expenditure of funds entrusted to the actor by the vulnerable adult which results or is likely to result in detriment to the vulnerable adult; or

(2) fails to use the financial resources of the vulnerable adult to provide food, clothing, shelter, health care, therapeutic conduct or supervision for the vulnerable adult, and the failure results or is likely to result in detriment to the vulnerable adult.



Other Civil Remedies for Collateral Consequences of the Exploitation

• Probate and Estate services• Landlord tenant | Eviction• Orders for Protection• Mediations

ProJusticeMN http://www.projusticemn.org/ •**Growing referral network for cases**•Growing resource library for expanding resources and this area (and all legal services and pro bono areas of law)•Create an account to access materials and browse potential pro bono cases

LawHelpMN http://www.lawhelpmn.org/ •Designed for the community at large to access•Basic fact sheets•A great place to start for Pro Bono attorney for context in an area of “poverty law”

http://www.projusticemn.org/

http://www.lawhelpmn.org/

Prevention Practices

Baseline Screening:A “Typical” Senior Budget

Income Sources Expenditures

Social Security Housing Needs

Pensions / Retirements Health Care: Out of Pocket, Prescriptions

Spousal Benefits Food / Clothing / Other Necessities

Annuities or Other Insurance Payments

Gifts / Charities / Other Support

Reverse Mortgage / Other Investments

http://www.youtube.com/watch?v=-eaJXBj87to&feature=player_embedded

http://newoldage.blogs.nytimes.com/2012/04/20/prime-targets-for-scam-artists/






Documents

Financial Exploitation: A Form of Elder Abuse “OUR RESPONSE TO ELDER ABUSE LAGS 40 YEARS BEHIND CHILD ABUSE AND 20 YEARS BEHIND DOMESTIC VIOLENCE” - M.T