March 29, 2023 • 28 mins
Guardianships in the US are supposed to help vulnerable people who can’t help themselves. But a Bloomberg Law investigation reveals a loosely regulated system in which those placed under guardianships can find themselves trapped, and sometimes exploited, by the people entrusted with their care.
Bloomberg Law correspondents Ronnie Greene and Holly Barker join this episode to discuss their five-part series on how the system works—and doesn’t work—and what can be done to fix it.
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Episode Transcript
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Speaker 1 (00:03):
From Bloomberg News and iHeartRadio. It's the big take. I'm
west Kasova today. How guardianships can wind up hurting the
people they're supposed to protect. Guardianships in the US are
(00:26):
intended to help those who are judged to be unable
to help themselves, but in reality it doesn't always work
that way. They defrauded nearly a thousand of their clients
out of nearly twelve million dollars and nobody noticed. That's
Bloomberg Law's chief investigative reporter Ronnie Green. He spent months
(00:47):
digging into how guardianships work with legal reporter Holly Barker,
There's lots of periodic bluster at the national level. You know,
we'll have some big crisis and suddenly there's some interest
in at the be some hearings, there's testimonies submitted, But
then what the follow through is what you sort of
don't see. Their reporting resulted in a five part series
(01:10):
that reveals a system of widely varying rules in which
people under guardianship can find themselves trapped and sometimes exploited
by the people entrusted with their care. Ronnie, what are guardianships?
Our series focused specifically an adult guardianships, and what that
(01:31):
entails is an adult. It could be a young adult
in their twenties or thirties, or an older adult, maybe
in the final years of their lives. Whenever an adult
is in a situation where he or she or they
are not able to make their own decisions, oftentimes a
family member, sometimes a guardian, sometimes a lawyer will file
a petition to put that person under a guardianship. And
what that means is there's a decision and ultimately a
(01:53):
court decision that person does not have the capability to
make their own decisions, so someone else essentially makes those
decisions for them. And I would say, on one hand,
it's meant to be benign, helpful system. What we learned
is that adult guardianships are deeply restrictive. They lose the
right many times to make very basic decisions. Do I
want to buy this item at the store? No, I
(02:14):
need someone's permission. Can I marry someone else? No? I
need someone's permission, So they become deeply restrictive. And the
irony is the person under guardianship is called a protected person,
but the protective person really has no rights left when
they're in a guardianship. Holly. Sometimes when somebody is placed
into guardianship, it's a parent or family member who becomes
(02:35):
the guardian, but other times it's a company that actually
is contracted to take over that care. Is that right? Well,
it could be a company or any court appointed fiduciary
who's then paid out of the protected person's estate. So
I would categorize it as more a family member or
a professional guardian. And how does that happen. Let's say
(03:00):
I'm the parent of a child who needs a guardian
and I'm unable to provide that service. It's maybe beyond
my capability, and so I go to a company that
specializes in this. How does that then work? How does
my child get put into guardianship? So there would be
(03:21):
a petition typically, and it varies wildly by state, but
typically you would file a petition or emotion, some sort
of request for a guardianship be put into place, and
then at that point, the court or an examiner somebody
will determine whether or not a guardianship is necessary, and
then to decide what the parameters of the guardianship will be,
and they'll implement an order that specifies exactly what the
(03:44):
guardian's responsibilities are. You could have a guardian who's responsible
solely for somebody's personal well being, their care, making sure
that they're getting to their doctor's appointments, making sure that
they have nurses if they meet them. And then you
can have somebody who's responsible for all of your finances,
making sure your taxes get paid, if you live in
a nursing facility or necessary living facility, that they're getting
(04:06):
paid properly, all of those things. Sometimes it could be
the same person, sometimes you might have two different people
who are responsible for those aspects of your life. One
of the things that we found that was really striking
for me is on one end, you know, these systems
are so restrictive, where as an adult you're losing your
right to make so many basic decisions. But in the
other end, it is a system, a court system. I
(04:26):
think it's a very little scrutiny. Different states have different rules.
There's one standard set of rules and how guardianships operate.
There's not one standard set of rules and what guardians
can earn. Frustraman guardians, what their caseloads will be. No
one is even counting how many times a guardian abuses
the person under their control. So on one hand, you
have a system that takes away your rights under hand,
(04:46):
you have a system that's getting very little scrutiny. So
that in between that is the potential for sort of
the wild West of fraud and abuse, and we found
some instances of that. Oftentimes a lot of residents, older
residents and nursing homes will be under guard and chippoon
will happen. There is maybe a doctor working with a
nursing home will do an examination, will find that so
and so is no longer able to make their own decisions,
(05:08):
and we'll file basically a one page report. Suddenly the
nursing home or a guardian or a professional is petitioning
to put that person under a guardianship. A lot of
times that person in the nursing home may not even
be at the court hearing, is not even aware that
this is happening. So that speaks to the system that
really does not have the checks and balances you would
think that it should have for what's ultimately happening here. Ronnie,
(05:31):
let me ask you about one case that seems to
encompass every possible thing that could go wrong in a
guardianship situation, and that happened in New Mexico and it
is the focus of the first story in your five
part series. Can you tell us what happened there? Absolutely? Yeah.
(05:51):
This was really stunning and speaks very vividly to the
dark world of adult guardianships. As we explored, was a
company called Iodondo Guardians. Iodondo Guardians was formed in two
thousand and four by a woman named Susan Harris who
had been a nurse, and by a colleague and friend,
Sharon Moore, who had been dealing in medical records, and
so they formed this guardianship company. Had not had experience
(06:12):
in this field directly before this, but within a year
got to contract with the state. They were a nonprofit
and what happened was, for more than a decade, their
mission was to help those in need of help, to
help adults who had mental health disabilities, post traumatic stress
from serving time, and wars older adults. They were really
created a help of very needy population. But what the
(06:34):
Department of Justice found is for over a decade they
defrauded nearly a thousand of their clients out of nearly
twelve million dollars, and nobody noticed. The State of New
Mexico Office of Guardianship year after year after year, gave
Iodonto Guardians contracts, which gave them prestige, which gave them clients,
which gave them a body of clients from which to steal,
(06:56):
which is what they did. During the time that Iodondo's
executive were diverting client money for their own benefit. They
were going on cruises, they were buying fancy cars and
fancy homes. They spent three hundred thousand dollars for sky
box at the local college basketball games, all with client
money that they stole. A few months before the Department
(07:17):
of Justice in twenty seventeen indicted Iodondo Guardians and its executives.
The State Office of Guardianship was asking Iodondo to send
them a note about success stories that the state could site.
All along the way, they were stealing from people, leaving
several of their clients homeless, leaving several of their clients
to turn to drugs. It was really a hering example.
(07:37):
But for me it speaks to a syst him. Where
there's lots of money at stake, there's very profound human
issues at stake. People's rights were taken away, but no
one's watching. Who's managing the protected people? Do you spoke
to John Black the third, who is the executive director
of the State's Guardianship Office, and he said to you
that he was shocked by the fraud and said the
(07:59):
state would have done more audits of those under guardianship.
But he also said the courtshare some of the blame
when it came to monitoring people's cases. The pool of
money they were pulling from were these people's assets, so
it was their VA money and it was their Social
Security that they didn't have any claim to. They were
simply supposed to be responsible for overseeing. So on top
(08:22):
of the fees that they were collecting for the state,
they were also dipping in to the asset pool that
belonged to their clients and using that money to spend
and to pay their American Express bills every month to
buy their homes and gated communities. And the vast majority
of their victims were veterans, and a lot of them
were also receiving Social Security payments, and that is likely
(08:45):
a big part of the reason that this scheme was
even uncovered if it hadn't been for the involvement of
federal prosecutors. Ultimately, but federal agencies with all of the
red flags that eventually percolated up to be enough. Without that,
I'm not sure how much longer this would have persisted, Ronnie.
(09:06):
You right that this company went to extraordinary lengths to
cover its tracks in falsifying all sorts of information. Oh absolutely, yeah.
When the VA asked them for proof of you know,
what's in your clients account shows that you're properly managing
the money. One of the executives created phony reports and
actually got a copy of a local bank or signature
that she affixed to the reports to make it look
(09:27):
like it was real. And so that was enough, Ronnie.
What happened to the people involved in the company. Yeah,
the four directors who are prosecuted, four directors of Iodando Guardians,
all got prison sentences. They all, I should mentally, all
pleaded guilty to those charges. The company founder, Susan Harris,
got forty seven years, Sharon Moore, the former chief financial officer,
(09:47):
got twenty years in prison, and Susan Harris's husband got
fifteen years. William Harris and her son got just under
six years. They were convicted of money laundering, aggravated identity theft,
and various counts fraud Hollie Harris didn't respond to your
request to be interviewed, but you did speak to Sharon Moore,
who was the former chief financial officer of this company
(10:10):
from prison. What was she like? More sympathetic than you
would imagine. You know, I didn't see her, It was
all over the phone, but she sounds like somebody's grandmother.
I think that she was being as honest with us
as she can be with herself about everything that happened.
I got the sense that she was genuinely remorseful. She
(10:33):
does feel like her sentence was too long. She was
definitely not the mastermind of this scheme. She was a
five percent owner and profited far less greatly than our
co conspirators did. But you know, she forged the documents right,
and she couldn't tell you why she did it. She
did tell us that she thought about quitting multiple times.
(10:56):
But she is going to spend much of the rest
of her life, if not the rest of her life
and a federal facility in the middle of Texas, which
is a long way from her sons and her grandchildren.
More with Holly Barker and Ronnie Green after the break,
(11:17):
one of the things that really struck me about the
stories in this series where how little rights. Say a
parent who has a child place and guardianship has in
making decisions for their own child once that child has
been placed into guardianship. That sometimes if a parent says,
I don't like the way the guardian is treating my child.
(11:38):
I don't like these conditions, the courts are often indifferent
or even hostile to those people. That's absolutely true, and
it can be a really costly fight too. You'll have
to hire lawyers, And as Ronnie can tell you, there
tends to be sort of a one sided communications between
judges and guardians were often as arms of the court,
(12:01):
and there are frequently cozy relationships, and I think it
can be easy to make a family member seems sort
of insane or crazed when you have the judges ear
in that way. When you have those sort of one
sided discussions, judges can wind up sort of I think,
over crediting the information that they're getting from guardians without
sort of really examining or giving that person an opportunity
(12:24):
to truly be heard. Who are these judges? When we
think about a judge, we're thinking of a specific thing,
but guardianship judges are not always courtroom judges. That's right
in New York and New Mexico, for example. They are.
In Georgia, however, they're elected and there are very few
requirements for who may qualify, and the training is extraordinarily limited.
(12:45):
And one of the things we found was in at
least six states across the country, at least six states
allow non lawyers to serve as guardianship judges issuing guardianship orders.
In Georgia, for instance, counties of a small population, I
think it's ninety thousand or fewer residents, the probate judge
does not have to have a law degree, and that's significant,
I think experts will tell you because in guardianship cases,
(13:07):
you're issuing really significant orders. You're taking away someone's rights,
and so advocates who want to see a better system
will say, how can someone without illegal training make that
kind of decision? And the case we found in Georgia
focused on a young woman named Kaylee Bullwinkle who was
Asperger syndrome and her mom worried that she might be
taken advantage when she became an adult, so she thought,
(13:28):
maybe I'll put her an unlimited guardianship that she's eighteen
years old. When she did that, she found the system
to be really deeply restrictive. In fact, within a year,
the mother realized, hey, I made a mistake. Kayley doesn't
need this guardianship. She's doing things on her own. But
it took them almost three years, and all before they
were able to escape the guardianship. And along the way,
the judge in that case severely restricted her already restricted rights.
(13:50):
The judge took away Kayley's right to vote without telling
the family, without holding hearing on the issue. Kaylee had
a perfect driving record, was driving herself to and from
work with the judge, but hurtle on her ability to drive,
the judge said, Kayley can't write checks. The judge said
Kayley can't have her own checking account. And all along
the way, the mother was taken aback by these really
deeply restrictive rules and was challenging the system. Ultimately hired
(14:14):
a lawyer with an advocacy office in Georgia. The family
appealed the judge's orders in an appeal one on every
single account. Finally, Kayley was able to get out of
the guardianship. She's doing much better now, she's a full
time job. It's a daycare teacher, she graduated from college.
She's doing really well. It's really a vivid case study
of going into guardianships for the best reason and having
(14:35):
no idea what it's going to be like until you
get in, and really losing your rights. And as the
mom said to me, I didn't know that every decision
I made would be nitpicked, and she felt like she
sort of losing control being Kayley's mom. What were the
judges qualifications in Kayley's case and Georgia, In small counties,
the probate judge does not have to have a lot
(14:56):
of greyer legal training, and in this case, the judge
in question and not have a law degree. So she
is now the probate judge in the small county in
Georgia issuing these orders. What she will tell you I
interviewed her is that she very deeply studies the law.
She has law books in her office, she turns to
lawyers for counsels. She feels like she looks very deeply
into cases and gives them a thorough vetting before issuing
(15:18):
her orders. But what advocates I interviewed and Holly interviewed
will tell you is that someone sitting in that position,
issuing guardianship orders should have a formal legal training before
taking away someone's rights. Holly, I guess that also raises
the other question, which is how does one become a guardian?
What are the qualifications or career path into that line
(15:41):
of work? Again, it varies by state. In some states,
like New York, it's typically lawyers. There's no requirement that
a guardian and who's appointed by a court needs to
be a lawyer. It could be a social worker in
an ideal world, But in most states there is very
little training. Anybody can sign up to do it, and
in fact that there might not even be any sort
(16:03):
of screening process to make sure, for example, that a
guardian doesn't have a criminal background. It's a hodgepodge, but
in some states it's virtually nothing, and that I think
speaks to sort of where guardianship cases and probate courts
stands sort of on the rung of the criminal justice system.
They're near the bottom. Just to be honest with you,
only fourteen states certified guardians. No one can really tell you.
(16:23):
No one and government can tell you how many exactly
active guardianship cases there are. There's only estimates, No one
can tell you how much money is at stake. There's
only estimates. And what one of the advocates told me
is that you keep track of things when you care
about things, and when someone has the rights taken away,
we should care about those things. I think the fact
that there's so little scrutiny and attention paid to the
(16:44):
system speaks to sort of where the guardianship system stands
and sort of the ladder of the courts. So let's
now go to another example of a young man in
Indiana who is placed into a guardianship after he suffered
head injury. Tell us what happened there. Sure, this was
a really revealing case and evolves young Well now a
(17:05):
man by the name of Nicholas Klaus. When he was nineteen,
he got in a car accident had a traumatic brain injury,
so his mother and stepfather became his guardian. After several years,
Nick recovered from his traumatic brain injury, he married, he
had a child, and he was working full time. Yet
he was still under a guardianship and as he described
to us, he needed permission to basically make any sort
(17:27):
of purchases. He needed permission before he bought diapers for
his infant when the engine on his SUV failed, he
couldn't choose his own car, and so ultimately he linked
up with the disability writes lawyer in Indiana. But the
name of Justin Schrock, who nine years after the guardianship began,
helped Nick get out of the guardianship and Nick felt
like he was free. One of the first things Nick
(17:48):
did was he sold that car that didn't want to
buy because he wasn't able to make the choice on
what kind of car he could have. But his case
is revealing and sort of what these guardianships can be
like for folks who have recovered fully from traumatic episodes.
Justin Truck who you mentioned, that's Nicholas Klaus's lawyer with
a group called Indiana Disability Rights, spoke to producer Mobarrow
(18:12):
about how he and other advocates are able to step
in and help extricate people from unwanted guardianships. Really, his
case is representative of the cracks and the entire system,
because if someone that independent, someone who has been married
(18:33):
for several years, owned their own home, had a child,
at work full time, and all of these different jobs
that were not entry level jobs that actually require real
skills If someone like that can be forced to continue
under guardianship for years and years beyond the time that
(18:56):
it's necessary, then that really illustrates so many of the
shortcomings and gaps of our system, And his case isn't
an outlier, It's much more representative of the system as
a whole. Part of my success handling these cases has
(19:17):
a lot to do with the fact that the standard
to establish guardianships is so low to begin with, so
oftentimes in these cases there really hasn't been much consideration
of whether some other option less restricted than guardianship could
be appropriate for the individual. So when I come into
(19:40):
a case, the first thing I'm looking at and trying
to assess is what other options might there be that
could work for this person? Requires an honest assessment of
what their strengths and their weaknesses are. But at the
end of the day, just because someone isn't able to
(20:02):
manage their affairs independently doesn't mean they need all of
their rights removed and given to someone else. Oftentimes they
just need a little bit of support and a little
bit of assistance to be able to manage their affairs
really and almost entirely independent fashion. I'm able to connect
(20:24):
those dots. I think better than most as far as
what is actually out there and available and what might
work for an individual client. You know, when it's just
been assumed that because of the client may not have
been able to manage their affairs entirely on their own,
that tends to be the end of it. They get
(20:45):
assigned a guardian. The guardian is assigned all of their
decision making authority, and it's often kind of left to that.
And you know, some states will have pretty robust systems
to where they'll require analysis of the case and review
hearings every so often to you know, make sure that
(21:06):
the case is reviewed for continued necessity or oftentimes lack
of necessity, But that simply doesn't happen in Indiana and
many cases, I don't know that I'm necessarily doing anything
all that special. In a lot of cases, I'm really
just kind of doing the minimum of what should have
(21:28):
been done, either from the very beginning or somewhere along
the way. Because you know, any person, if we're talking
about someone eighteen, nineteen, twenty years old, disability or not,
they're going to be immature. Oftentimes they're not going to
make great decisions. I know, I certainly didn't at that age.
(21:51):
But when someone has an intellectual or developmental disability, they
aren't treated as though they can learn and grow from
those mistakes. They oftentimes actually get held to a higher
standard than the rest of us, and those, you know,
dumb decisions that they might have made at eighteen or
nineteen years old get held against them for the rest
(22:13):
of their life. Kristen Stackback, who was the lawyer for
Nicholas Klaus's guardian, said she couldn't comment on his case
and ultimately his parents supported ending the guardianship. When we
come back, at least one state is doing it better, Ronnie,
(22:36):
you said that there are only estimates for how many
people are under guardianships. What are those estimates right now?
It's about one point five million active guardianship and conti
conservatorship cases at a time. That's a lot of people
for something that's is loosely regulated. You would think that
that many people states would really be looking at it
much more closely as they should be. There's no question
(22:57):
they should be. And the best estimates are that those
guardians control fifty billion dollars in assets for those under
their control. But again that's just an estimate. Other folks
will tell you it's a lot more than that. But
just the fact that no one in the government can
give you firm answers on that almost speaks to sort
of where guardianship stand in sort of the public's eye.
They need more attention. I think that's pretty clear what
(23:18):
can be done to fix this system. Actually, that's one
of the things we looked at pretty deeply. Nevada, which
had some pretty massive guardianship scandals a couple of years
ago with the guardians dealing hundreds of millions of dollars
from our clients, adopted an overhaul in twenty seventeen. And
what's happening in Nevada is now whenever someone a family member,
(23:39):
a lawyer, or a guardian, anyone files a petition to
put someone else under guardianship, automatically a Legal aid lawyer
gets involved in the case before the petition is approved.
And that's really significant. What that means is they so
called protective person has a legal advocate representing only that
person's interest, no one else interest, and that lawyer from
Legal Aid Society it's involved and looked at the petition.
(24:01):
The first thing the lawyer will ask the person who
faced the petition is do you know about this? Sometimes
they'll say yeah, and you know it's my daughter. We
need to do this. You know, I can't make decisions anymore.
This is a good thing. Other times they'll say, I
don't have no idea who this person is. And what
we found was in Nevada, those lawyers get about twenty
five percent of petitions rejected, which is the pretty large number,
(24:22):
and it shows you maybe one out of every four
cases is not needed, which speaks to something that we
heard from a lot of experts, and that is guardianships
in the best sense, can be a good thing, but
they should be a last resort, not the first. In
What the system of Nevada is doing, which has really
not been adopted by other states, is making sure that
the guardianship is truly needed. And I think that's a
good protection. I think that'd be a good first step
(24:44):
if many more states adopted that model. Ali that's Nevada.
As Ronnie said, other states aren't adopting what Nevada is doing.
What are some other states doing to fix this problem? All?
So interestingly in New York Act, it does have a
really robust guardianship system. It has a statute called Article
(25:05):
eighty one that governs adult guardianships that's considered a model.
It was part of a series of reforms over the
last several decades. The problem is that you actually have
to adhere to it, and you have to implement the rules,
and you have to observe them. And so even if
you've got reform on books, you sort of need to
audit it. So the rules will say guardians must file
(25:26):
their annual reports once a year. Do they not always?
And pretty infrequently? And they're supposed to be reviewed promptly.
How promptly are they actually reviewed? How much scrutiny are
they're getting. We know that they're supposed to be reporting
compensation that they receive, we know that they don't always
do it. We need to know more about how big
the problem is, what the problems look like. We need
(25:47):
more information about it before I think we can address it.
Once there's legislation on the books, they need to comply
with it. So it needs to be ongoing scrutiny on
top of reforms as we saw it with are you
down to the company in New Mexico that defrauded so
many of its clients? The US Justice Department stepped in,
and so the federal government is certainly aware that this
(26:10):
is a problem. Are there any efforts by the government
to create national standards. There's lots of periodic bluster at
the national level. You know, we'll have some big crisis
and suddenly there's some interests in it. There'll be some hearings,
there's testimonies submitted. But then what there's the follow through
(26:30):
is which you sort of don't see. One of the
people we talked with is a man named Rick Black,
who helped expose guardianship abuse against his father in law
in Nevada. He's a former corporate executive who has become
a full time guardian reformer. He has studied thousands of
cases across the country and he helped lobbying. You know,
when public hearings for reforms of Nevada that actually passed,
and once Nevada passed, it's overhaul. He was optimistic, like, hey,
(26:53):
this is a good system. Let's get all the other
states to do it. And he said, six years later,
nothing's happened. So other states have not taken up the mantle,
and it just shows that these cases have not become
a priority in our hope is that by putting so
much attention to this story that this will spotlight the
gaping need for reform and maybe there will be some
changes that will be meaningful. We're certainly going to keep
(27:15):
on top of the story and see what happens next.
Ronnie Green, Holly Rucker, thanks so much for speaking with
me today. That's our pleasure. Thank you, thanks for listening
to us here at The Big Take. It's a daily
podcast from Bloomberg and iHeartRadio. For more shows from my
Heart Radio, visit the iHeartRadio app, Apple Podcasts, or wherever
you listen, and we'd love to hear from you. Email
(27:36):
us questions or comments to Dig Take at Bloomberg dot net.
The supervising producer of The Big Take is Vicky Bergolina.
Our senior producer is Katherine Fink. Our producers are Moe
Barrow and Michael Falero. Raphael I'm Seely is our engineer.
Our original music was composed by Leo Sidrin I'm Westkasova.
(27:58):
We'll be back tomorrow with another Big Take. Um um
hm
From Bloomberg News and iHeartRadio. It's the big take. I'm
west Kasova today. How guardianships can wind up hurting the
people they're supposed to protect. Guardianships in the US are
(00:26):
intended to help those who are judged to be unable
to help themselves, but in reality it doesn't always work
that way. They defrauded nearly a thousand of their clients
out of nearly twelve million dollars and nobody noticed. That's
Bloomberg Law's chief investigative reporter Ronnie Green. He spent months
(00:47):
digging into how guardianships work with legal reporter Holly Barker,
There's lots of periodic bluster at the national level. You know,
we'll have some big crisis and suddenly there's some interest
in at the be some hearings, there's testimonies submitted, But
then what the follow through is what you sort of
don't see. Their reporting resulted in a five part series
(01:10):
that reveals a system of widely varying rules in which
people under guardianship can find themselves trapped and sometimes exploited
by the people entrusted with their care. Ronnie, what are guardianships?
Our series focused specifically an adult guardianships, and what that
(01:31):
entails is an adult. It could be a young adult
in their twenties or thirties, or an older adult, maybe
in the final years of their lives. Whenever an adult
is in a situation where he or she or they
are not able to make their own decisions, oftentimes a
family member, sometimes a guardian, sometimes a lawyer will file
a petition to put that person under a guardianship. And
what that means is there's a decision and ultimately a
(01:53):
court decision that person does not have the capability to
make their own decisions, so someone else essentially makes those
decisions for them. And I would say, on one hand,
it's meant to be benign, helpful system. What we learned
is that adult guardianships are deeply restrictive. They lose the
right many times to make very basic decisions. Do I
want to buy this item at the store? No, I
(02:14):
need someone's permission. Can I marry someone else? No? I
need someone's permission, So they become deeply restrictive. And the
irony is the person under guardianship is called a protected person,
but the protective person really has no rights left when
they're in a guardianship. Holly. Sometimes when somebody is placed
into guardianship, it's a parent or family member who becomes
(02:35):
the guardian, but other times it's a company that actually
is contracted to take over that care. Is that right? Well,
it could be a company or any court appointed fiduciary
who's then paid out of the protected person's estate. So
I would categorize it as more a family member or
a professional guardian. And how does that happen. Let's say
(03:00):
I'm the parent of a child who needs a guardian
and I'm unable to provide that service. It's maybe beyond
my capability, and so I go to a company that
specializes in this. How does that then work? How does
my child get put into guardianship? So there would be
(03:21):
a petition typically, and it varies wildly by state, but
typically you would file a petition or emotion, some sort
of request for a guardianship be put into place, and
then at that point, the court or an examiner somebody
will determine whether or not a guardianship is necessary, and
then to decide what the parameters of the guardianship will be,
and they'll implement an order that specifies exactly what the
(03:44):
guardian's responsibilities are. You could have a guardian who's responsible
solely for somebody's personal well being, their care, making sure
that they're getting to their doctor's appointments, making sure that
they have nurses if they meet them. And then you
can have somebody who's responsible for all of your finances,
making sure your taxes get paid, if you live in
a nursing facility or necessary living facility, that they're getting
(04:06):
paid properly, all of those things. Sometimes it could be
the same person, sometimes you might have two different people
who are responsible for those aspects of your life. One
of the things that we found that was really striking
for me is on one end, you know, these systems
are so restrictive, where as an adult you're losing your
right to make so many basic decisions. But in the
other end, it is a system, a court system. I
(04:26):
think it's a very little scrutiny. Different states have different rules.
There's one standard set of rules and how guardianships operate.
There's not one standard set of rules and what guardians
can earn. Frustraman guardians, what their caseloads will be. No
one is even counting how many times a guardian abuses
the person under their control. So on one hand, you
have a system that takes away your rights under hand,
(04:46):
you have a system that's getting very little scrutiny. So
that in between that is the potential for sort of
the wild West of fraud and abuse, and we found
some instances of that. Oftentimes a lot of residents, older
residents and nursing homes will be under guard and chippoon
will happen. There is maybe a doctor working with a
nursing home will do an examination, will find that so
and so is no longer able to make their own decisions,
(05:08):
and we'll file basically a one page report. Suddenly the
nursing home or a guardian or a professional is petitioning
to put that person under a guardianship. A lot of
times that person in the nursing home may not even
be at the court hearing, is not even aware that
this is happening. So that speaks to the system that
really does not have the checks and balances you would
think that it should have for what's ultimately happening here. Ronnie,
(05:31):
let me ask you about one case that seems to
encompass every possible thing that could go wrong in a
guardianship situation, and that happened in New Mexico and it
is the focus of the first story in your five
part series. Can you tell us what happened there? Absolutely? Yeah.
(05:51):
This was really stunning and speaks very vividly to the
dark world of adult guardianships. As we explored, was a
company called Iodondo Guardians. Iodondo Guardians was formed in two
thousand and four by a woman named Susan Harris who
had been a nurse, and by a colleague and friend,
Sharon Moore, who had been dealing in medical records, and
so they formed this guardianship company. Had not had experience
(06:12):
in this field directly before this, but within a year
got to contract with the state. They were a nonprofit
and what happened was, for more than a decade, their
mission was to help those in need of help, to
help adults who had mental health disabilities, post traumatic stress
from serving time, and wars older adults. They were really
created a help of very needy population. But what the
(06:34):
Department of Justice found is for over a decade they
defrauded nearly a thousand of their clients out of nearly
twelve million dollars, and nobody noticed. The State of New
Mexico Office of Guardianship year after year after year, gave
Iodonto Guardians contracts, which gave them prestige, which gave them clients,
which gave them a body of clients from which to steal,
(06:56):
which is what they did. During the time that Iodondo's
executive were diverting client money for their own benefit. They
were going on cruises, they were buying fancy cars and
fancy homes. They spent three hundred thousand dollars for sky
box at the local college basketball games, all with client
money that they stole. A few months before the Department
(07:17):
of Justice in twenty seventeen indicted Iodondo Guardians and its executives.
The State Office of Guardianship was asking Iodondo to send
them a note about success stories that the state could site.
All along the way, they were stealing from people, leaving
several of their clients homeless, leaving several of their clients
to turn to drugs. It was really a hering example.
(07:37):
But for me it speaks to a syst him. Where
there's lots of money at stake, there's very profound human
issues at stake. People's rights were taken away, but no
one's watching. Who's managing the protected people? Do you spoke
to John Black the third, who is the executive director
of the State's Guardianship Office, and he said to you
that he was shocked by the fraud and said the
(07:59):
state would have done more audits of those under guardianship.
But he also said the courtshare some of the blame
when it came to monitoring people's cases. The pool of
money they were pulling from were these people's assets, so
it was their VA money and it was their Social
Security that they didn't have any claim to. They were
simply supposed to be responsible for overseeing. So on top
(08:22):
of the fees that they were collecting for the state,
they were also dipping in to the asset pool that
belonged to their clients and using that money to spend
and to pay their American Express bills every month to
buy their homes and gated communities. And the vast majority
of their victims were veterans, and a lot of them
were also receiving Social Security payments, and that is likely
(08:45):
a big part of the reason that this scheme was
even uncovered if it hadn't been for the involvement of
federal prosecutors. Ultimately, but federal agencies with all of the
red flags that eventually percolated up to be enough. Without that,
I'm not sure how much longer this would have persisted, Ronnie.
(09:06):
You right that this company went to extraordinary lengths to
cover its tracks in falsifying all sorts of information. Oh absolutely, yeah.
When the VA asked them for proof of you know,
what's in your clients account shows that you're properly managing
the money. One of the executives created phony reports and
actually got a copy of a local bank or signature
that she affixed to the reports to make it look
(09:27):
like it was real. And so that was enough, Ronnie.
What happened to the people involved in the company. Yeah,
the four directors who are prosecuted, four directors of Iodando Guardians,
all got prison sentences. They all, I should mentally, all
pleaded guilty to those charges. The company founder, Susan Harris,
got forty seven years, Sharon Moore, the former chief financial officer,
(09:47):
got twenty years in prison, and Susan Harris's husband got
fifteen years. William Harris and her son got just under
six years. They were convicted of money laundering, aggravated identity theft,
and various counts fraud Hollie Harris didn't respond to your
request to be interviewed, but you did speak to Sharon Moore,
who was the former chief financial officer of this company
(10:10):
from prison. What was she like? More sympathetic than you
would imagine. You know, I didn't see her, It was
all over the phone, but she sounds like somebody's grandmother.
I think that she was being as honest with us
as she can be with herself about everything that happened.
I got the sense that she was genuinely remorseful. She
(10:33):
does feel like her sentence was too long. She was
definitely not the mastermind of this scheme. She was a
five percent owner and profited far less greatly than our
co conspirators did. But you know, she forged the documents right,
and she couldn't tell you why she did it. She
did tell us that she thought about quitting multiple times.
(10:56):
But she is going to spend much of the rest
of her life, if not the rest of her life
and a federal facility in the middle of Texas, which
is a long way from her sons and her grandchildren.
More with Holly Barker and Ronnie Green after the break,
(11:17):
one of the things that really struck me about the
stories in this series where how little rights. Say a
parent who has a child place and guardianship has in
making decisions for their own child once that child has
been placed into guardianship. That sometimes if a parent says,
I don't like the way the guardian is treating my child.
(11:38):
I don't like these conditions, the courts are often indifferent
or even hostile to those people. That's absolutely true, and
it can be a really costly fight too. You'll have
to hire lawyers, And as Ronnie can tell you, there
tends to be sort of a one sided communications between
judges and guardians were often as arms of the court,
(12:01):
and there are frequently cozy relationships, and I think it
can be easy to make a family member seems sort
of insane or crazed when you have the judges ear
in that way. When you have those sort of one
sided discussions, judges can wind up sort of I think,
over crediting the information that they're getting from guardians without
sort of really examining or giving that person an opportunity
(12:24):
to truly be heard. Who are these judges? When we
think about a judge, we're thinking of a specific thing,
but guardianship judges are not always courtroom judges. That's right
in New York and New Mexico, for example. They are.
In Georgia, however, they're elected and there are very few
requirements for who may qualify, and the training is extraordinarily limited.
(12:45):
And one of the things we found was in at
least six states across the country, at least six states
allow non lawyers to serve as guardianship judges issuing guardianship orders.
In Georgia, for instance, counties of a small population, I
think it's ninety thousand or fewer residents, the probate judge
does not have to have a law degree, and that's significant,
I think experts will tell you because in guardianship cases,
(13:07):
you're issuing really significant orders. You're taking away someone's rights,
and so advocates who want to see a better system
will say, how can someone without illegal training make that
kind of decision? And the case we found in Georgia
focused on a young woman named Kaylee Bullwinkle who was
Asperger syndrome and her mom worried that she might be
taken advantage when she became an adult, so she thought,
(13:28):
maybe I'll put her an unlimited guardianship that she's eighteen
years old. When she did that, she found the system
to be really deeply restrictive. In fact, within a year,
the mother realized, hey, I made a mistake. Kayley doesn't
need this guardianship. She's doing things on her own. But
it took them almost three years, and all before they
were able to escape the guardianship. And along the way,
the judge in that case severely restricted her already restricted rights.
(13:50):
The judge took away Kayley's right to vote without telling
the family, without holding hearing on the issue. Kaylee had
a perfect driving record, was driving herself to and from
work with the judge, but hurtle on her ability to drive,
the judge said, Kayley can't write checks. The judge said
Kayley can't have her own checking account. And all along
the way, the mother was taken aback by these really
deeply restrictive rules and was challenging the system. Ultimately hired
(14:14):
a lawyer with an advocacy office in Georgia. The family
appealed the judge's orders in an appeal one on every
single account. Finally, Kayley was able to get out of
the guardianship. She's doing much better now, she's a full
time job. It's a daycare teacher, she graduated from college.
She's doing really well. It's really a vivid case study
of going into guardianships for the best reason and having
(14:35):
no idea what it's going to be like until you
get in, and really losing your rights. And as the
mom said to me, I didn't know that every decision
I made would be nitpicked, and she felt like she
sort of losing control being Kayley's mom. What were the
judges qualifications in Kayley's case and Georgia, In small counties,
the probate judge does not have to have a lot
(14:56):
of greyer legal training, and in this case, the judge
in question and not have a law degree. So she
is now the probate judge in the small county in
Georgia issuing these orders. What she will tell you I
interviewed her is that she very deeply studies the law.
She has law books in her office, she turns to
lawyers for counsels. She feels like she looks very deeply
into cases and gives them a thorough vetting before issuing
(15:18):
her orders. But what advocates I interviewed and Holly interviewed
will tell you is that someone sitting in that position,
issuing guardianship orders should have a formal legal training before
taking away someone's rights. Holly, I guess that also raises
the other question, which is how does one become a guardian?
What are the qualifications or career path into that line
(15:41):
of work? Again, it varies by state. In some states,
like New York, it's typically lawyers. There's no requirement that
a guardian and who's appointed by a court needs to
be a lawyer. It could be a social worker in
an ideal world, But in most states there is very
little training. Anybody can sign up to do it, and
in fact that there might not even be any sort
(16:03):
of screening process to make sure, for example, that a
guardian doesn't have a criminal background. It's a hodgepodge, but
in some states it's virtually nothing, and that I think
speaks to sort of where guardianship cases and probate courts
stands sort of on the rung of the criminal justice system.
They're near the bottom. Just to be honest with you,
only fourteen states certified guardians. No one can really tell you.
(16:23):
No one and government can tell you how many exactly
active guardianship cases there are. There's only estimates, No one
can tell you how much money is at stake. There's
only estimates. And what one of the advocates told me
is that you keep track of things when you care
about things, and when someone has the rights taken away,
we should care about those things. I think the fact
that there's so little scrutiny and attention paid to the
(16:44):
system speaks to sort of where the guardianship system stands
and sort of the ladder of the courts. So let's
now go to another example of a young man in
Indiana who is placed into a guardianship after he suffered
head injury. Tell us what happened there. Sure, this was
a really revealing case and evolves young Well now a
(17:05):
man by the name of Nicholas Klaus. When he was nineteen,
he got in a car accident had a traumatic brain injury,
so his mother and stepfather became his guardian. After several years,
Nick recovered from his traumatic brain injury, he married, he
had a child, and he was working full time. Yet
he was still under a guardianship and as he described
to us, he needed permission to basically make any sort
(17:27):
of purchases. He needed permission before he bought diapers for
his infant when the engine on his SUV failed, he
couldn't choose his own car, and so ultimately he linked
up with the disability writes lawyer in Indiana. But the
name of Justin Schrock, who nine years after the guardianship began,
helped Nick get out of the guardianship and Nick felt
like he was free. One of the first things Nick
(17:48):
did was he sold that car that didn't want to
buy because he wasn't able to make the choice on
what kind of car he could have. But his case
is revealing and sort of what these guardianships can be
like for folks who have recovered fully from traumatic episodes.
Justin Truck who you mentioned, that's Nicholas Klaus's lawyer with
a group called Indiana Disability Rights, spoke to producer Mobarrow
(18:12):
about how he and other advocates are able to step
in and help extricate people from unwanted guardianships. Really, his
case is representative of the cracks and the entire system,
because if someone that independent, someone who has been married
(18:33):
for several years, owned their own home, had a child,
at work full time, and all of these different jobs
that were not entry level jobs that actually require real
skills If someone like that can be forced to continue
under guardianship for years and years beyond the time that
(18:56):
it's necessary, then that really illustrates so many of the
shortcomings and gaps of our system, And his case isn't
an outlier, It's much more representative of the system as
a whole. Part of my success handling these cases has
(19:17):
a lot to do with the fact that the standard
to establish guardianships is so low to begin with, so
oftentimes in these cases there really hasn't been much consideration
of whether some other option less restricted than guardianship could
be appropriate for the individual. So when I come into
(19:40):
a case, the first thing I'm looking at and trying
to assess is what other options might there be that
could work for this person? Requires an honest assessment of
what their strengths and their weaknesses are. But at the
end of the day, just because someone isn't able to
(20:02):
manage their affairs independently doesn't mean they need all of
their rights removed and given to someone else. Oftentimes they
just need a little bit of support and a little
bit of assistance to be able to manage their affairs
really and almost entirely independent fashion. I'm able to connect
(20:24):
those dots. I think better than most as far as
what is actually out there and available and what might
work for an individual client. You know, when it's just
been assumed that because of the client may not have
been able to manage their affairs entirely on their own,
that tends to be the end of it. They get
(20:45):
assigned a guardian. The guardian is assigned all of their
decision making authority, and it's often kind of left to that.
And you know, some states will have pretty robust systems
to where they'll require analysis of the case and review
hearings every so often to you know, make sure that
(21:06):
the case is reviewed for continued necessity or oftentimes lack
of necessity, But that simply doesn't happen in Indiana and
many cases, I don't know that I'm necessarily doing anything
all that special. In a lot of cases, I'm really
just kind of doing the minimum of what should have
(21:28):
been done, either from the very beginning or somewhere along
the way. Because you know, any person, if we're talking
about someone eighteen, nineteen, twenty years old, disability or not,
they're going to be immature. Oftentimes they're not going to
make great decisions. I know, I certainly didn't at that age.
(21:51):
But when someone has an intellectual or developmental disability, they
aren't treated as though they can learn and grow from
those mistakes. They oftentimes actually get held to a higher
standard than the rest of us, and those, you know,
dumb decisions that they might have made at eighteen or
nineteen years old get held against them for the rest
(22:13):
of their life. Kristen Stackback, who was the lawyer for
Nicholas Klaus's guardian, said she couldn't comment on his case
and ultimately his parents supported ending the guardianship. When we
come back, at least one state is doing it better, Ronnie,
(22:36):
you said that there are only estimates for how many
people are under guardianships. What are those estimates right now?
It's about one point five million active guardianship and conti
conservatorship cases at a time. That's a lot of people
for something that's is loosely regulated. You would think that
that many people states would really be looking at it
much more closely as they should be. There's no question
(22:57):
they should be. And the best estimates are that those
guardians control fifty billion dollars in assets for those under
their control. But again that's just an estimate. Other folks
will tell you it's a lot more than that. But
just the fact that no one in the government can
give you firm answers on that almost speaks to sort
of where guardianship stand in sort of the public's eye.
They need more attention. I think that's pretty clear what
(23:18):
can be done to fix this system. Actually, that's one
of the things we looked at pretty deeply. Nevada, which
had some pretty massive guardianship scandals a couple of years
ago with the guardians dealing hundreds of millions of dollars
from our clients, adopted an overhaul in twenty seventeen. And
what's happening in Nevada is now whenever someone a family member,
(23:39):
a lawyer, or a guardian, anyone files a petition to
put someone else under guardianship, automatically a Legal aid lawyer
gets involved in the case before the petition is approved.
And that's really significant. What that means is they so
called protective person has a legal advocate representing only that
person's interest, no one else interest, and that lawyer from
Legal Aid Society it's involved and looked at the petition.
(24:01):
The first thing the lawyer will ask the person who
faced the petition is do you know about this? Sometimes
they'll say yeah, and you know it's my daughter. We
need to do this. You know, I can't make decisions anymore.
This is a good thing. Other times they'll say, I
don't have no idea who this person is. And what
we found was in Nevada, those lawyers get about twenty
five percent of petitions rejected, which is the pretty large number,
(24:22):
and it shows you maybe one out of every four
cases is not needed, which speaks to something that we
heard from a lot of experts, and that is guardianships
in the best sense, can be a good thing, but
they should be a last resort, not the first. In
What the system of Nevada is doing, which has really
not been adopted by other states, is making sure that
the guardianship is truly needed. And I think that's a
good protection. I think that'd be a good first step
(24:44):
if many more states adopted that model. Ali that's Nevada.
As Ronnie said, other states aren't adopting what Nevada is doing.
What are some other states doing to fix this problem? All?
So interestingly in New York Act, it does have a
really robust guardianship system. It has a statute called Article
(25:05):
eighty one that governs adult guardianships that's considered a model.
It was part of a series of reforms over the
last several decades. The problem is that you actually have
to adhere to it, and you have to implement the rules,
and you have to observe them. And so even if
you've got reform on books, you sort of need to
audit it. So the rules will say guardians must file
(25:26):
their annual reports once a year. Do they not always?
And pretty infrequently? And they're supposed to be reviewed promptly.
How promptly are they actually reviewed? How much scrutiny are
they're getting. We know that they're supposed to be reporting
compensation that they receive, we know that they don't always
do it. We need to know more about how big
the problem is, what the problems look like. We need
(25:47):
more information about it before I think we can address it.
Once there's legislation on the books, they need to comply
with it. So it needs to be ongoing scrutiny on
top of reforms as we saw it with are you
down to the company in New Mexico that defrauded so
many of its clients? The US Justice Department stepped in,
and so the federal government is certainly aware that this
(26:10):
is a problem. Are there any efforts by the government
to create national standards. There's lots of periodic bluster at
the national level. You know, we'll have some big crisis
and suddenly there's some interests in it. There'll be some hearings,
there's testimonies submitted. But then what there's the follow through
(26:30):
is which you sort of don't see. One of the
people we talked with is a man named Rick Black,
who helped expose guardianship abuse against his father in law
in Nevada. He's a former corporate executive who has become
a full time guardian reformer. He has studied thousands of
cases across the country and he helped lobbying. You know,
when public hearings for reforms of Nevada that actually passed,
and once Nevada passed, it's overhaul. He was optimistic, like, hey,
(26:53):
this is a good system. Let's get all the other
states to do it. And he said, six years later,
nothing's happened. So other states have not taken up the mantle,
and it just shows that these cases have not become
a priority in our hope is that by putting so
much attention to this story that this will spotlight the
gaping need for reform and maybe there will be some
changes that will be meaningful. We're certainly going to keep
(27:15):
on top of the story and see what happens next.
Ronnie Green, Holly Rucker, thanks so much for speaking with
me today. That's our pleasure. Thank you, thanks for listening
to us here at The Big Take. It's a daily
podcast from Bloomberg and iHeartRadio. For more shows from my
Heart Radio, visit the iHeartRadio app, Apple Podcasts, or wherever
you listen, and we'd love to hear from you. Email
(27:36):
us questions or comments to Dig Take at Bloomberg dot net.
The supervising producer of The Big Take is Vicky Bergolina.
Our senior producer is Katherine Fink. Our producers are Moe
Barrow and Michael Falero. Raphael I'm Seely is our engineer.
Our original music was composed by Leo Sidrin I'm Westkasova.
(27:58):
We'll be back tomorrow with another Big Take. Um um
hm
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