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 a decedent? 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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A 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 he died with minimal assets apart from his home. However, after Keystone helped his sister become administrator of the estate, she made a shocking discovery: Her brother actually had owned assets worth upward of $60 million.
Combing through her brother’s financial documents, she noticed a series of suspicious transactions. She deduced that her brother’s former “caregivers” had been siphoning money from his financial accounts and misappropriating valuable property.
These pseudo-caregivers entered the decedent’s life at a time when he’d been suffering from severe mental illness; he had been in need of real help. Posing as his friends, they moved into his home days after meeting him and began to gradually take control of his finances.
Within two months, one of the caregivers had managed to get himself designated as the decedent’s attorney-in-fact, which gave him access to everything from the the decedent’s bank and brokerage firm accounts to his medical records. Worse still, these so-called caregivers provided the decedent with the opposite of care. They dispensed him questionable medications and mind-altering substances (some of which were illegal) — which ultimately contributed to his physical and mental decline.
Regrettably, the decedent’s physical and mental decline eventually led to his untimely death. After discovering that these “caregivers” had taken advantage of her brother at his most vulnerable 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 her recover the assets his “caregivers” had stolen.
Elder Financial Abuse
It’s an unfortunate reality that socially isolated and incapacitated individuals — especially those who are elderly or suffering from mental illness — are more susceptible to financial exploitation than individuals who are competent and part of a community.
Our probate attorneys routinely handle cases in which financial abuse perpetrated against an incapacitated person has caused that person to surrender some or all of their assets to their abusers and/or drastically alter their estate plans to disproportionately favor them. While physical abuse tends to be somewhat detectable, financial abuse tends to be subtle, possibly taking the form of undue influence or fraud. When someone alters their estate plan at the urging of their abusers, it can lead to their surviving loved ones having to bring a will contest or trust contest to try to have the ill-gotten document invalidated.
In the decedent’s case, it may have been his loneliness and depression that drove him to befriend total strangers who did not have his best interests at heart, and overlook their countless acts of elder financial abuse. It is, of course, ideal when financial abuse is discovered and litigated while the victim is alive, but too often, financial abuse remains undetected until after the victim’s death, as it did in this case.
Once a financial abuse victim dies, their loved ones, or the personal representative or trustee can litigate on behalf of their estate or trust, respectively, to try to retrieve the stolen assets.
“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 partner 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 physician practicing in an affluent Los Angeles neighborhood for upward of 30 years. After sustaining an injury, he became 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 – also was 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 mentally unwell, had hit rock bottom and was alone, 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 had even been placed on an involuntary psychiatric hold. For these reasons, our client believed her brother had been particularly vulnerable to undue influence and fraud at the hands of his so-called caregivers.
After having been authorized to act as the decedent’s agent through a power of attorney, the abusers systematically started to siphon money totaling millions of dollars from the decedent’s financial accounts.
The decedent eventually suffered a sharp decline in his physical and mental health due to an illicit psychedelic substance that had been provided to him at the direction of his pseudo-caregivers. At this point, he’d had enough and evicted the duo from his home. They, however, were not yet finished with their criminal activities, as one of the caregivers transferred millions of dollars 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. After that, they 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, our 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. The receiver was effectively given the 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.
Ultimately, 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 for our client. In addition to the $2 million the receiver seized in assets on behalf of the estate, the caregivers agreed to a judgment that would require them to pay an additional $1 million in damages.
Unfortunately, rather than satisfying the judgment, 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 endured by the decedent and his untimely passing, this resounding victory did provide some relief to our client, who could rest easy knowing her brother’s abusers didn’t get away with the financial exploitation they perpetrated against him at a time when he had been vulnerable and mentally unwell.
Because the perpetrators were forced to pay such a hefty sum in damages and continue to have a $1 million judgment on their records, one can only hope Keystone’s work on this case might stop the perpetrators from committing financial abuse against another incapacitated person in the future.
While the abusers still have not satisfied the $1 million judgment against them, they have pled guilty to multiple federal crimes, including fraud, money laundering and conspiracy. While their sentencing hearing has not yet taken place, they face decades in federal prison for their crimes.