How To Protect Your Clients From Elder Financial Abuse

Editor’s Note: This is the second in a series of articles by Michael Hackard, Esq., that are excerpts from his book, The Wolf At The Door: Undue Influence And Elder Financial Abuse.

As the United States ages and more baby boomers reach senior status each year, the problem of elder financial abuse is destined to only get worse over the next 10 to 15 years. According to the National Institutes of Health, by 2030 there will be 61 million people in the United States between the ages of 66 and 84, nine million of whom will be 84. If you think elder financial abuse is a problem now, just wait.

The previous chapter highlighted some of the textbook ways elder financial abuse occurs, but you should know that every situation is different. Being wealthy in old age would seem to offer some protection against abuse, as those with financial resources can hire qualified professionals, but, ironically, this is not necessarily the case. Rich or poor, competent or feeble, healthy or bedridden, all elders are susceptible to financial abuse, as the following true stories illustrate.

Police Misconduct

In June 2015, a Portsmouth, New Hampshire, police sergeant named Aaron Goodwin was fired as a result of an official inquiry into an elder financial abuse situation. Goodwin made news headlines for several months after he managed to inherit $2.7 million in property and funds from the late Geraldine Webber, who died in December 2012 94.

Goodwin wasn’t a relative of Webber’s; rather, he “befriended” her in 2010, during a routine house call. The elderly Web-ber, who had previously been diagnosed with dementia, told numerous witnesses she was “in love” with Goodwin and wanted to leave him everything she owned. Rather than remove himself from the situation, however, Goodwin continued to visit Webber frequently, even taking her on trips to casinos. He then facilitated her wish to change her will, soliciting various lawyers until he found one who would agree to shift $2.7 million in estate assets pledged to the city police and fire departments as well as designated charities over to himself. In the context of the case, Webber’s behavior waves the red flags of undue influence, a common method of elder financial abuse.

With Webber’s passing, her estate became locked in probate litigation, and Goodwin’s claims as the beneficiary came under serious scrutiny. Among other details, John Connors, a whistle-blower and 42-year veteran of the Portsmouth Police Department’s auxiliary unit, spoke out against what he saw as a clear abuse of authority. But no one wanted to listen.

When his wealthy elderly neighbor Webber, already in her 90s, began receiving frequent visits from his fellow officer Aaron Goodwin in 2010, Connors sensed something was amiss. His cause for concern was genuine; two weeks after she met Goodwin, Webber told Connors that the younger police officer had fallen in love with her and would soon leave his wife and children to move in with her, and that she would “give him everything.”

By that time it was clear that Webber’s diagnosed dementia was manifesting, but what was Goodwin’s role? Did he encourage such a delusion through undue influence? The motive for manipulation was simple—Webber bragged that she was rich, even showing her neighbor $30,000–$40,000 in hundred-dollar bills hidden in a silverware drawer. Indeed, Webber’s estate turned out to be worth $2.7 million, and Sgt. Goodwin continued to visit the senior citizen practically every day while on duty. In his off time, he also took Webber on trips to bars and casinos.

Connors continued to sound the alarm on Goodwin’s behavior in relation to Webber, but nobody in a position of authority responded. He tried voicing his concerns with higher-ups at various points, only to be greeted with an attitude of indifference or even acceptance.

We are fortunate to have Connors’s statements from his February 26, 2015, deposition, which show that he made every effort to alert his superiors to potential wrongdoing. Let’s review some of these statements:

• “When I made my complaints to the police department and the higher ups, nobody would listen to me.”

• “One commissioner said ‘good for them’ if the officer and his lawyer could get some of the neighbor’s ton of money.’”

• “I told [the then police chief], ‘You’re not going to believe what’s going on next door to my house,’ the stuff with Aaron Goodwin. I said, ‘He’s over there all the time,’ and he just didn’t want to hear it. He just looked at me and kind of smirked and shrugged his shoulders.”

• “[The former police commissioner] bends over and he goes, you know what, she’s got a ton of money, if they can get in there and get some of it and get away with it, good for them.”

• “I didn’t want this going public. I didn’t want this on the PD, as bad as it was looking, because 95% of the guys that work there are the greatest guys in the world. You got a handful that aren’t OK, and that’s what this is all about.”

Once Goodwin shopped around for a lawyer (several refused) who would transfer the bulk of Webber’s estate to him just months before her death in 2012, his visits to his elderly “friend” dwindled to around once a week for 10 to 15 minutes. Connors, meanwhile, was served with a notice of complaint from the Portsmouth Police Department that accused him of insubordination, malfeasance and violation of the department’s media policy, but he refused to stay silent.

Standing up and speaking out about known or suspected elder abuse is a brave act, and Connors should have been commended rather than punished. We need to protect whistleblowers who point out a simple truth: the difference between right and wrong.

Was it correct for Goodwin to use his official position to leverage millions from a woman suffering from dementia? The department finally decided that such behavior was unacceptable. Police chief Stephen Dubois (who resigned in 2015) commented:

This termination is only one of many changes that we have made and will continue to make as we seek to close what has been an unfortunate chapter in the otherwise proud history of the Portsmouth Police Department. We wish to thank the citizens of Portsmouth and the men and women of the Portsmouth Police Department for everyone’s patience.

Goodwin was also found to have violated three regulations each of both the Portsmouth Police Department Duty Manual and the city’s code of ethics when he helped Webber transfer her estate to him.

In August 2015, a court finally ruled that Goodwin exerted undue influence over Geraldine Webber by “acting upon her fears and hopes.” Like veteran cop John Connors, the courageous whistle-blower who helped bring the story to public light, you can stand up and speak out against elder abuse. Bad actors only get away with wrongdoing for so long—one way or another, they’ll be held accountable.

Accountant Fraud

Hiring a professional to manage the resources of an elder does not always guarantee that assets and lives will be protected. Consider the story, straight from Studio City, of Ross and Eunice Bellah. A happy Hollywood couple, Ross and Eunice had been well known in the movie industry for decades. Ross was an Oscar-nominated art director for several famous films and television productions since the 1950s, while Eunice was a painter. Since 1986, when he had already retired, Ross had retained one Aron Shlain as his tax accountant. By 2003, Ross was 96 and gravely ill. Shlain convinced his ailing client to appoint him as successor trustee in the event of Eunice’s incompetency. A year later Ross died; Shlain bided his time.

In 2008, Eunice fell and broke her arm, and that’s when Shlain pounced. He moved her out of the home Ross had designed and built, a Frank Lloyd Wright–style dwelling complete with a Japanese garden and koi pond, and into a convalescent facility. Shlain managed to get two doctors to declare her incompetent, thus gaining control of the Bellah estate as trustee. He then sold the house and adjoining properties for $900,000, reportedly well below market price. The couple’s dream home was bulldozed, while the widowed Eunice was confined to a room with an incontinent patient suffering from Alzheimer’s.

Neighbor Herb Adelman reported that she “had none of her artwork, no television, no telephone. Nothing.” Another friend even alerted California Adult Protective Services after witnessing the conditions Eunice had to live in, but to no avail.

With Ross’s widow out of the way, in 2010 Shlain transferred $886,000 from the house sale to his sister in Israel. Eunice’s friends went to bat for her in court upon learning about the exploitation perpetrated against her, yet the case dragged on until a Los Angeles County judge finally ruled in 2011 that Shlain had to pay $2.8 million to Eunice’s conservator for clear-cut elder financial abuse. By then, however, it was too late: Shlain had fled the country to Israel, where he continues to live large off of injustice.

Eunice Bellah died at the nursing home in 2012, a victim of cold, heartless greed. Her friends will always remember her, and those who fought against Shlain’s wrongdoing should be commended.

Family Cruelty And Neglect

When a case of elder abuse makes the news headlines, we are shocked at the cruelty inflicted on one of our senior citizens, frequently by members of their own family. Abuse against elders takes many forms, and among them neglect is the most horrific, amounting to the denial of a person’s very existence by treating them as if they were already dead.

According to the allegations of the authorities in Redding, California, severe neglect was the reason 90-old Dorothy Havens died on May 15, 2015. Havens had been under the “care” of her daughter Kathryn Jean Havens, 56, and granddaughter Amanda Havens, 33. Dorothy was discovered by police officers the previous night after a report of possible elder abuse, and both her daughter and granddaughter were placed under arrest.

Unfortunately for Dorothy Havens, help came too late. She died at the hospital the morning after her rescue, unable to recover from the abuse she had endured for so long. Investigators say that Dorothy had been in her bed since November 2014 and that she was suffering from bedsores, was covered with feces, and had wounds with fly larvae coming out of them. Her daughter and granddaughter, who were living off Dorothy Havens’s Social Security checks, were ultimately charged with murder.

While most of us would have difficulty even contemplating Dorothy’s suffering, sadly, her case is far from unusual. Elder abuse and neglect are becoming increasingly more common. There are various motives for wrongdoing, but the results are always the same: irreparable physical and emotional trauma or loss of life.

One comment about Dorothy Havens, offered by her neighbors, stays with us in particular: They “thought she had passed a couple years ago.” Elderly victims are often left for dead by their abusers, and no one notices for years. Dorothy Havens could easily be one of our own loved ones. The simple truth is that elder abuse requires a community solution: neighbors looking out for each other and reporting potential occurrences of this grave crime. We can—and must—do better to protect our seniors.

Not Even The Superrich Are Safe

You might think that being rich and famous would protect you from elder financial abuse, but that turns out not to be true. Consider, for example, the extreme case of Sumner Redstone.

At age 94, billionaire media mogul Sumner Redstone is spending his sunset years engaged in rather unpleasant business: estate litigation. Redstone, the founder of the Viacom and CBS entertainment empires, made headlines in October 2016 due to a spate of lawsuits brought by two former girl- friends who challenged his will and mental capacity, with sums in the millions at stake. He filed a $150 million lawsuit against the women, alleging elder abuse, fraud, breach of fiduciary duty, and intentional infliction of emotional distress.

The first public sign that all was not well in the House of Redstone came in October of 2015, when the kingpin behind National Amusements disinherited lady friend Sydney Holland and confidante Manuela Herzer from his estate. He eliminated Herzer as the holder of his advance health-care directive and withdrew the $70 million in assets he had set aside for her upon his death. He also kicked the pair out of his house and arranged for daughter Shari Redstone to make her way back into his life as the new heir apparent to a sprawling multibillion-dollar corporate enterprise. Not one to be pushed aside so easily, Herzer pursued claims of undue influence (based on Redstone’s diminished capacity) in Los Angeles County Superior Court, only to have the suit dismissed in May of 2016.

Redstone, his daughter, and their legal team decided to answer Herzer in kind, initiating another round of litigation that will likely leave everyone more miserable aside from the litigators themselves. When Herzer and Holland were ensconced in Redstone’s life, the new lawsuit alleges, they convinced him to cash in on Viacom and CBS stock options and treat each of them to a sweet $45 million in cash. This generous gesture, however, left Redstone holding the bag on massive tax obligations incurred through gifting. In addition, Herzer and Holland splurged on shopping sprees from the boutiques of Beverly Hills to the salons of Paris and secured themselves choice real estate.

Based on the accounts of a nurse working inside his residence, Redstone’s complaint also alleged that:

• Herzer and Holland convinced Redstone that his family hated him in order to gain more of his estate assets. If they left, they said, he “would die alone.”

• Herzer and Holland would use sedatives to keep Redstone from making estate decisions not in their favor and manipulate him into signing documents for their benefit.

• Herzer and Holland would “berate” and emotionally manipulate Redstone to keep him under their control.

If the charges in Redstone’s complaint are indeed true, they would constitute clear elder financial abuse. With accusations traded back and forth by all parties, it’s hard to determine exactly who has the truth on their side, with the law to back them up. If there’s any life lesson to draw from the drama, it’s that we might as well concede that unhappy people will use their riches to purchase even more unhappiness. The following is taken directly from the complaint filed by Redstone:

In the waning years of Redstone’s life, as his physical health declined and he became dependent on others for his care and sustenance, Redstone fell victim to financial and emotional abuse at the hands of two women many years his junior, Defendants Manuela Herzer (“Herzer”) and Sydney Holland (“Holland”). Beginning in 2010, Herzer and Holland commandeered Redstone’s life. They moved into his home and assumed responsibility for his care. They isolated Redstone from family and friends. They terminated his doctors, nurses, household staff, and longtime advisors and brought in hand-picked replacements. They decided who came and went from the residence. They spoke for Redstone when he lost his ability to vocalize. Redstone entrusted Holland and Herzer with all aspects of his personal and financial affairs—essentially everything but his business.

How can we protect our loved ones against elder financial abuse? The stories in this chapter remind us to stand up and speak out and never give up if something is amiss. Set up a system of checks and balances among family members, financial professionals, attorneys and medical caregivers to ensure that everyone plays fair. No one deserves to be exploited and left for dead—prevent exploitation and stop predators in their tracks.

Elder financial abuse can happen to anyone, regardless of circumstances, even those with supposedly upstanding caregivers and professionals monitoring their health and welfare. The examples I have cited are extreme, but by no means uncommon. Early recognition of elder financial abuse is key to minimizing the damage done, so in the following chapter, I will walk through a series of steps I recommend when someone suspects a case of elder financial abuse.

To read the first article in the series, click here: /news/the-five-most-common-ways-elder-financial-abuse-happens-36160.html?section=3

Michael A. Hackard, Esq., heads Hackard Law, an estate, trust and probate law firm in Sacramento, California. A veteran of the legal field with 40 years of experience, Hackard is devoted to protecting his clients.