Recovering Stolen Assets: Keystone Helps Retrieve Millions From a Decedent’s Financial Abusers
Can the administrator of a decedent’s estate litigate to recover assets that were wrongfully taken from the decedent when they had been alive? If so, how can they find out which assets were misappropriated?
If you have a possible financial abuse claim, an estate lawyer can help not only to investigate it, but to recover the assets that were lost.
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Our client came to us for help after the untimely death of her brother. He passed away unexpectedly after having suffered with mental illness for years. Initially, it was believed that he died with minimal assets apart from his home. However, after Keystone successfully got its client appointed as the administrator of the estate, she discovered that the decedent actually owned assets worth upward of $60 million. Combing through the decedent’s financial documents, she had noticed a series of suspicious transactions. She suspected that her brother’s former “caregivers” had been siphoning money and other valuable property from him.
These pseudo-caregivers entered her brother’s life at a time when he’d been suffering from severe mental illness and was in need of real help. Posing as his friends, they moved into his home days after befriending him and started to gradually take control of his finances. Within two months of meeting him, one of the caregivers had already managed to get himself designated as the brother’s attorney-in-fact, which gave him access to everything from the brother’s bank and brokerage firm accounts to his medical records. Worse still, these so-called caregivers provided the decedent with the opposite of care by giving him questionable medications and mind-altering substances (some of which were illegal) that ultimately contributed to his physical and mental decline.
Regrettably, the decedent’s physical and mental deterioration eventually led to his untimely death. Understanding that these “caregivers” had taken advantage of her brother at his most vulnerable time for their own personal gain, our client was committed to obtaining justice for her brother and hired Keystone, in conjunction with co-counsel, to help recover the assets that had been stolen.
Elder Financial Abuse
It is an unfortunate reality that persons – especially elderly persons and dependent adults suffering from mental illness – who are incapacitated and/or socially isolated are more susceptible to financial exploitation through undue influence and fraud than people who are fully competent. Our probate attorneys routinely handle cases in which financial abuse perpetrated against an elderly and/or mentally incapacitated person has led the elderly and/or incapacitated person to surrender some or all of their assets to their abusers or drastically alter their estate plans to favor them. Down the road, the latter scenario can lead to their surviving loved ones having to bring a will or trust contest to try to have the document invalidated.
In the case of our client’s brother, it may have been his loneliness and depression that led him to befriend strangers who did not have his best interests at heart and overlook their numerous acts of financial abuse. It is, of course, ideal when the victim of financial abuse or one of their loved ones notices the abuse and litigates it while the victim is alive, but too often, financial abuse remains undetected until after the victim’s death, as it did in this case.
Following the death of a financial abuse victim, their executor/administrator, trustee or loved ones can litigate on behalf of their estate or trust to try to retrieve the assets that were lost to the abuse.
“Regardless of whether financial abuse is detected before or after a victim’s death, it is crucial swift legal action be taken to prevent further financial harm from being perpetrated,” says Roee Kaufman, a senior associate at Keystone. “As a result of the client contacting us as soon as she suspected financial abuse, we were able to get to work investigating the case and stop any additional financial abuse from taking place.”
An In-Depth Look Into Keystone’s Elder Financial Abuse Case
The decedent in this case had been a successful and well-known doctor practicing in an affluent Los Angeles neighborhood for upward of 30 years. After sustaining an injury, he had become physically disabled, which rendered him unable to perform at work and derailed his medical practice. During this time, his bipolar disorder – characterized by mood swings, manic episodes, erratic behavior and depression – was also becoming more pronounced. He was declining physically and mentally, losing the capacity to manage his personal and financial affairs.
Enter a couple of strangers acting as “caregivers.” Encountering a man who was alone and had hit rock bottom suffering from serious mental illness, they saw an opportunity to financially profit from his compromised physical and mental state.
During this time, the decedent had been arrested and jailed on multiple occasions as a result of manic episodes that affected his ability to think clearly. At one point, he was even placed on an involuntary psychiatric hold. For these reasons, the client believed her brother had been particularly vulnerable to undue influence and fraud at the hands of his so-called caregivers.
After being authorized to act as the decedent’s agent through a power of attorney, the abusers systematically began siphoning money totaling millions of dollars from the decedent’s accounts.
Eventually, the decedent suffered a sharp decline in his physical and mental health as a result of an illicit psychedelic substance that was provided to him at the direction of his pseudo-caregivers. At this point, he evicted the duo from his home. They, however, were not yet done with their criminal activities, as one of the caregivers transferred millions from the decedent’s brokerage account to his personal account. Soon after, the decedent passed.
The caregivers ended up moving back into the decedent’s home, which they claimed had been “gifted” to them by the decedent during his lifetime. They also ransacked the home, taking several valuable items of personal property from it, and withdrew even more money from his bank accounts. And to hide their misdeeds from the decedent’s family, they cleared the home of financial documents.
The facts of this case were so egregious and well-documented that not long after securing our client’s appointment as administrator of her brother’s estate, Keystone’s estate lawyers assisted in persuading the court to appoint what is known as a third-party “receiver” to track down the decedent’s missing assets. Effectively, the receiver was given authority to trace the decedent’s assets and seize those assets wherever they were — whether in the possession of the abusers, the abuser’s attorneys, financial institutions, or somewhere else.
In the end, the receiver was able to recover approximately $2 million in stolen property from the caregiver abusers. Soon after, Keystone assisted in settling the case, and the results were beyond favorable to the client. In addition to the $2 million in assets seized on behalf of the estate by the receiver, the caregivers agreed to a judgment that would require them to pay an additional $1 million in damages. Unfortunately, rather than following through with this obligation, they defied court orders by refusing to hand over the stolen funds and documents. They even went so far as to try to launder the money owed to the decedent’s estate in an effort to not pay it back.
The Abusers Didn’t Get Away With It
While nothing could possibly make up for the financial abuse and untimely death of our client’s brother, this resounding victory did undoubtedly provide some relief to our client, who could rest assured the abusers didn’t get away with the financial exploitation they committed against her brother when he was at his most vulnerable.
One can hope that in the process, since the perpetrators were forced to pay such a hefty sum in damages and continue to have a $1 million judgment on their records, Keystone’s work might stop the perpetrators from committing financial abuse against another vulnerable person in the future.
While the abusers still have not satisfied the $1 million judgment against them, they have been arrested and are awaiting trial in federal court for multiple charges, including wire fraud, aggravated identity theft and conspiracy to engage in money laundering, among others. If they are convicted on all the charges, they face decades in prison.