Archive for the ‘Trust Fund’ Category

Probate Sharks – OBRA Special Needs Pooled Trusts: Permissable Distributions and Federal Regulations

September 23, 2011

Many of our readers have asked us for more information about OBRA trusts. OBRA trusts were originally created for disabled people with long-term needs, so they could move into public aid facilities and have funds left for their special needs. An appropriate situation would be for a disabled child who received a malpractice award meant to cover long-term needs. In order to prevent the child’s funds from being quickly drained by nursing home costs, OBRAs were created to allow the disabled child to be placed into a public aid facility, and have their estate available throughout their life for those things not provided by public aid. Once the OBRA is created though, private pay facilities are no longer an option for the child, in accordance with OBRA laws.

In the Cook County Probate Courts, these OBRA trusts are being abused. The elderly disabled are having their substantial estates (their hard-earned life-long savings) placed into OBRAs. Wards who lived at home or in beautiful private pay facilities prior to their guardianships have their funds placed into OBRAs (despite having enough funds to enjoy their private pay facilities for the rest of their lives), and are moved to less desirable public aid facilities (at the cost of the taxpayer). The wards’ estates are then VERY quickly depleted by the guardians, GALs, and attorneys.

Although the OBRA laws were created for the purpose of providing for a high quality life for the ward while on public aid, this is not occurring. Over 65% of the Public Guardian’s elderly wards’ estates are placed into OBRA accounts, and these substantial estates are rapidly depleted by the guardians and attorneys, with the approval of certain judges, rather than being spent on the wards special needs.

[See for] a comprehensive list of what is allowed by law to be paid from OBRA trusts, FOR THE BENEFIT OF THE WARD; also included are our comments to show what is actually occurring to wards on the 18th floor of the Daley center. These examples are substantiated with public court records. Case numbers will be provided to investigators upon request.

This abuse must be exposed for what it is: Financial exploitation of the elderly disabled and medicaid fraud and abuse on the part of some of the judges, guardians, GALs, and attorneys in the Cook County Probate Courts.

Your ProbateSharks Team of Medicaid Fraud and Abuse Whistleblowers


See Also:
Probate Sharks: Medicaid Fraud and Abuse Rampant in Cook County Probate Court

Former New Jersey Attorney Indicted

September 23, 2011

A former Northfield attorney was indicted Tuesday in the theft of more than $220,000, Atlantic County Prosecutor Ted Housel said in a news release.

Gary Levin, 61, of Egg Harbor Township, was indicted by a grand jury for second-degree theft by failure to make required disposition after he allegedly misappropriated $220,149 from his attorney’s trust account between Aug. 1, 2008, and Oct. 12, 2010.

The money “represented settlement proceeds belonging to nine different clients,” the news release says.

Levin, who has been a lawyer in New Jersey since 1999, was suspended by the state Supreme Court in September 2010 and permanently disbarred a month later.

If convicted, Levin faces a maximum sentence of 10 years in prison and $150,000 in fines, First Assistant Prosecutor Jim McClain said in a news release.

Full Article and Source:
Former Northfield Attorney Indicted in Theft of Clients’ Settlement Funds

Probate Sharks: Medicaid Fraud and Abuse Rampant in Cook County Probate Court

August 23, 2011

Many of our readers have requested additional information about OBRA Special Needs Pooled Trusts.

In Cook County, many wards’ estates, valued in the hundreds of thousands of dollars, are placed into OBRA Supplemental Needs Pooled Trusts.

Supposedly, this is being done for the benefit of the ward as it allows the ward to qualify for Medicaid, thus saving the funds for the special needs of the ward.

However, in reality, the ones benefitting from these trusts are the attorneys and guardians. Once a ward’s estate is placed into the trust, they can no longer (by law) reside in private pay nursing homes, and are thus moved into public aid facilities.

And, instead of using the funds placed into the OBRA for the special needs of the wards that aren’t being met in the public aid nursing homes, the funds are being used primarily to pay attorneys and legal fees until the estate is depleted.

Full Article and Source:


>Ohio Atty Sentenced to Prison, Restitution for Theft From Trust Fund

June 2, 2011

>An attorney was sentenced in Cuyahoga County to prison time and ordered to pay restitution after he pleaded no contest to charges of theft amounting to more a million dollars.

Judge Michael Astrab handed down an eight-year sentence to 61-year-old Charles Manning of Chesterland on Friday. He also has to pay more than $1.5 million in restitution to the victims and pay a $20,000 fine.

Manning entered the no contest plea to two counts of theft on February 15, 2011.

According to the Cuyahoga Prosecutor’s Office, Manning stole more than $1.5 million from two clients’ trust funds and used the money to invest in a failed water, sewer, pipeline, and a communications and power line construction business operating in southern Ohio.

Full Article and Source:
Attorney Charles Manning Sentenced to Prison Time, Restitution for Theft

>Former NV Supervising District Court Clerk Arrested for Felony Theft

May 4, 2011

>A former supervising Washoe District Court clerk has surrendered to face criminal charges stemming from allegations she siphoned more than $200,000 from a state court trust account to pay personal gambling debts.

The Reno Gazette-Journal reports that 45-year-old Teresa Prince was arrested Monday on a felony theft warrant. Bail was set at $7,500 pending an appearance in Reno Justice Court.

The Gazette-Journal reports that Prince resigned March 2, less than a week after money was found to be missing from a Second Judicial District Court account.

Full Article and Source:
Former Supervising Nevada Court Clerk Accused of Draining Trust Account to Pay Gambling Debts

>Instead of Helping, VA Trustee Program is Hurting Veterans, Families Say

April 11, 2011

>During the Korean War, Billy Brown faced enemy bullets, starvation and bitter cold. Now the benefits that he earned for his sacrifice have been tied up by the Department of Veterans Affairs, which in 2009 diverted his payments to trustees who have taken control not only of those funds, but of his life savings of some $100,000 as well.

Richard Wortham, Mr. Brown’s son, gained power of attorney for his father four years before the department stepped in, and found out about his father’s new financial minder only when he tried to withdraw money from the bank. “They said we no longer had access to his money — we could only get it from the fiduciary,” Mr. Wortham said.

What began as a broad effort to safeguard ailing veterans and their families from financial loss and abuse has turned into what lawyers and veterans’ advocates call a mismanaged and poorly regulated bureaucracy that not only fails to respond to veterans’ needs but in some cases creates new problems.

Families of veterans like Mr. Brown, 80, and William E. Freeman, whose sister was denied the ability to manage his benefits, and beneficiaries like Dennis Keyser, whose appointed trustee turned out to be a felon, say the system is badly flawed.

The department says it has appointed people to manage 111,407 accounts with a cumulative value of more than $3.2 billion. They earn up to 4 percent commission on the money under their care. The department, in a statement, said that beneficiaries had access to due process before a final decision was reached about appointing a beneficiary, and that the financial managers were carefully vetted. Once appointed, they “may also be required to prepare annual accountings.” In making the choice, the agency said, “priority is given to a family member if qualified and willing to serve.”

The report stated that 315 fraud investigations from October 1998 to March 2010 had “resulted in 132 arrests and monetary recoveries of $7.4 million in restitution, fines, penalties and administrative judgments.”

Full Article and Source:
Instead of Helping, Trustee Program Is Hurting Veterans, Families Say

>Heir Says Lawyers Pulled a Fast One

December 20, 2010

>An heir of the founder of DHL Express claims his trust fund dwindled from $90 million to $12 million after his attorneys and trustee increased the attorneys’ contingency fee to 56 percent without his approval. And he claims that the attorneys increased guardianship payments to his grandparents to “the tune of hundreds of thousands of dollars” to keep them from protesting.

Junior Larry Hillbroom sued attorneys Barry Israel and Keith Waibel in U.S. District Court in the Northern Mariana Islands, Hagatna, Guam. Both lawyers were admitted to the California Bar; Israel lives in Santa Barbara and Waibel in Guam, according to the complaint.

Larry Hillblom, the co-founder and former owner of DHL Express, died in an airplane crash in May 1995, leaving behind four children and an estate worth about $550 million, according to the complaint.

Junior – whose name is listed as Hillbroom in the complaint, which refers to him throughout as Junior – was a pretermitted heir, living in poverty in the Republic of Palau at the time of his father’s death.

He learned in mid-1995 that he was entitled to a portion of the estate. In the spring of 1997, Junior proved that Hillblom was his father through DNA testing, and was issued an heirship settlement entitling him to 15 percent of the estate.

Junior says he did not become aware that the defendants drained so much money from his trust until Nov. 10, 2006, when he met with an FBI agent in San Francisco. After that meeting, Junior says, he discovered for the first time that his “ultimate recovery after the attorneys deducted their inappropriate fees and unsubstantiated costs from his approximately $90 million settlement of the Hillblom probate case was only about $12 million.”

Junior seeks special damages, forfeiture of attorney’s fees, and restitution for legal malpractice and fraud. He is represented by Mark Hanson of Saipan.

Full Article and Source:
Lawyers Pulled a Fast One, DHL Heir Says

CT Woman Charged With Trust Fund Embezzlement

October 10, 2010

A Wisconsin woman accused of embezzling $125,800 from a trust fund left by her mother for the benefit of her stepfather was ordered held on $25,000 bond.

Michelle Angst, 49, of Mukwonago, Wis., was assigned as trustee of the fund’s $202,591 several years ago. Angst’s stepfather, Irving, lived in New Milford from April of 2006 through July of 2010, during which time police say she withdrew funds to enrich herself. An investigation revealed that money was used to pay for hotels, groceries, retail items, gas, and to pay Moots and Pellegrini, the legal firm Angst retained after police launched an investigation. Most of it was withdrawn as cash payments.

A complaint was lodged by Angst’s husband David in a Sept. 30, 2009 letter to the New Milford Probate Court. David and Michelle Angst were in the middle of a divorce.

Full Article and Source:
Woman Charged With Trust Fund Embezzlement Held on $25,OOO

CT: Accountant Ordered to Repay Tusts $4.2 Mil

October 5, 2010

Probate Judge James Kelley has ruled that Norwich accountant F. Robert LaSaracina “willfully mismanaged” nine family trusts known collectively as the Kauppinen Trusts and must repay them more than $4.2 million.

Kelley, in a decision filed in Norwich Probate Court, rejected LaSaracina’s accounting of his handling of the estate as trustee, finding that LaSaracina engaged in self-dealing with regard to trust assets; commingled trust assets with personal business assets; and encumbered trust real estate with “ill-advised and excessively expensive loans … for no reasonable purpose discernable by this court.”

LaSaracina, Kelley found, “has caused irreparable harm to the trusts by ‘lending’ money … to other clients … family-owned business interests and client-owned businesses in derogation of the fiduciary duties (as trustee).”

Full Article and Source:
LaSaracina Ordered to Repay $4.2 Million to Family Trusts

CT: Accountant Involks 5th Amendment

September 25, 2010

F. Robert LaSaracina, a Norwich accountant accused of defrauding a family trust fund of $2.2 million and whose office was recently targeted by federal investigators, declined to testify today in the ongoing trial of former Mashantucket Pequot chairman Michael Thomas.

LaSaracina appeared in a New London Superior courtroom with high-profile attorney Hubert Santos and promptly asserted his 5th Amendment privileges against self incrimination.

Santos said the federal investigation, and search warrant served at LaSaracina’s West Town Street office, had changed the circumstances.

LaSaracina had previously testified to his role in dealing with some of Thomas’ finances. Thomas is being sued by Sovereign Bank which claims he defaulted on a multi-million dollar line of credit.

Considering LaSaracina’s new position, Thomas’ attorney Lawrence Rosenthal, asked Judge Joseph Koletsky to strike LaSaracina’s previous testimony. The motion was denied.

Full Article and Source:
Norwich Accountant Invokes 5th Amendment in Thomas Trial