Minnesota Attorney General Lori Swanson and Anoka County Attorney Tony Palumbo today announced legislation to provide greater protections to vulnerable adults under the care of guardians and conservators in Minnesota. The legislation will be authored by Representative Debra Hilstrom, Chair of the House Judiciary Committee, and Senator Ron Latz, Chair of the Senate Judiciary Committee. The proposed legislation would improve Minnesota’s background check process for guardians and conservators and provide stronger safeguards against financial exploitation by:
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Expanding background checks to include whether a guardian or conservator has ever been denied a professional license by the State related to the responsibilities of a fiduciary duty, or whether they’ve had a license conditioned, suspended or revoked;
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Requiring that guardians and conservators disclose additional information that may bear on their soundness as a guardian, including whether they have filed bankruptcy, been found civilly liable for fraud or misrepresentation, have outstanding civil monetary judgments against them, or have an order for protection or harassment restraining order issued against them;
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Providing that background checks be conducted every two years, instead of every five years as the law currently provides; and
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Requiring that guardians disclose the above information, as well as any changes in their criminal history, within 30 days of the incident;
“Financial abuse by guardians who are supposed to be looking out for vulnerable people is exploitive. This legislation would update Minnesota law to help ensure that guardians meet the high standards necessary to look after another person,” said Attorney General Swanson.
“As we see a rising number of financial exploitation cases, this legislation requires critical background information on someone who is asking to make financial and living decisions for a vulnerable person. It will help a judge make the right decision,” said County Attorney Palumbo.
“Vulnerable adults who require a guardian or conservator to manage their affairs deserve to be treated with fairness and dignity. This legislation would provide additional tools to help make sure that those selected are up to the task,” said Representative Hilstrom.
“State law should provide robust tools to screen out risky individuals before they become trusted appointees of the court over the assets and care of vulnerable persons. This bill will strengthen the screening process,” said Senator Latz.
The Minnesota Attorney General’s Office recently prosecuted a guardian, Terri Ann Hauge d/b/a Estate Resources, Inc., who was suspended from the practice of law in Minnesota on November 8, 1995 for lying to clients and mishandling cases. Because existing law does not require disclosure of professional licensing actions, Hauge was subsequently appointed to serve as a guardian for dozens of vulnerable adults.
The Complaint filed by the Attorney General’s Office and court documents alleged that:
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In one case involving a ward under her care who only received $650 in Social Security per month, Hauge drained $22,666.48 from his bank accounts over a seven month period, leaving him with $33.65. After Hauge was removed as his guardian/conservator, county social services found that he was living in a squalid apartment with no edible food.
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In another case, Hauge refused to provide food or money to a ward who had just been discharged from emergency medical care, instead leaving him alone in a motel in an unfamiliar town without any money for food. In the same conservatorship case, Hauge failed to pay the ward’s bills and bounced dozens of checks, resulting in daily calls to the ward and his family from creditors seeking payment. Instead of paying the bills, Hauge drained $4,170 from the ward’s bank account, leaving him with a negative balance of -$31.29.
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In yet another case, Hauge cashed in a life insurance policy that was supposed to be set aside for her ward’s future burial services. In this same conservatorship, Hauge also drained $4,656.45 from the ward’s bank account, leaving her with a negative balance of -$143.66 when she was ultimately removed as the woman’s guardian and conservator.
The Attorney General’s Office, Hennepin County, and Rice County charged and convicted Hauge of perjury, felony theft by swindle, felony theft by false representation, and felony financial exploitation for swindling and financially exploiting vulnerable adults out of tens of thousands of dollars while appointed as their guardian.
The United States Government Accountability Office (“GAO”) recently identified hundreds of allegations of physical abuse, neglect, and financial exploitation by guardians in 45 states and the District of Columbia between 1990 and 2010. Out of 20 selected closed cases, the GAO found that guardians stole or improperly obtained $5.4 million in assets from 158 incapacitated victims. Some victims were also physically neglected or abused.
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