Tuesday, November 26, 2013
While working in Europe, I first heard the label "befrienders," as applied to people who work their way into the lives of disabled or elderly persons. The relationship often starts with the befriender doing small, helpful tasks; over time, the helper gains trust that enables him or her to have a greater role in the elder's life, thus opening the door to exploitation of the person's diminishing powers of judgment, while gaining complete control over finances.
On November 5, the New Hampshire Supreme Court affirmed convictions on nine of eleven criminal counts for "befriender" Karen Gagne, accused of stealing over $500,000 from a ninety year old woman in a retirement center. The case is State of New Hampshire v. Karen Gagne, 2013 WL 512499 (2013).
I plan to write more in the future about the technical details of the crimes charged in this context, but one of the clear lessons from the history in this particular case is how much time it may take for the befriending pattern to develop and "ripen" into fraud that is recognized by third-parties. For example, Karen Gagne's involvement with the victim spanned years:
"The defendant met the victim in the 1980s when the defendant performed landscaping services at the victim's home. The two became friends and subsequently lived together as companions in the victim's home for at least one year until the victim asked the defendant to move out. In the summer of 2006, the defendant and the victim rekindled their friendship. The victim moved to Pleasant View Retirement Home (Pleasant View), and the defendant began driving the victim to doctors' appointments and nail appointments, and taking her to lunch. In addition, although the victim had previously had an accountant pay her larger bills, the defendant began handling the victim's bills, including payment of her rent at Pleasant View."
At some point, "helpful" friend Gagne began liquidating the elder woman's annuities or other property and borrowing additional money under the elder's name.
The fact that Gagne was giving herself gifts might not have been discovered, except that by the fall of 2008, Gagne was no longer making regular rent payments to the retirement home. She offered excuses, such as blaming a "grandson or nephew" for stealing money, and claimed that she, Gagne, was trying to "recover" the money in order to pay the victim's bills. By late 2009, the victim was so far behind in rental payments -- and the excuses had become so unbelievable -- that the facility's executive director contacted the Attorney General's office, thus leading to the criminal charges.
Having sat through trials of similar cases, and having read transcripts of other cases, I can just imagine how Gagne would try to justify her thefts, arguing that "her friend wanted her to have the money" to explain why the 90-year old woman had "signed" checks she wrote out for her. In fact, this "gift" argument actually worked as a defense to two of the criminal counts in the case, where the older woman had personal involvement in transactions. Nonetheless, on the majority of criminal counts, the Supreme Court concluded "the defendant was not privileged to infringe upon the victim's interest" in joint accounts, nor was Gagne justified in misapplication of funds she was handling as a "financial representative" of the elder.
Karen Gagne was originally sentenced to "an aggregate of 10 to 30 years in New Hampshire State Prison for Woman." It is not clear from the opinion whether remand on the overturn of two of the elevent counts would trigger a resentencing.
New Hampshire, by the way, is the state that recently passed a new law, permitting long-term care facilities to sue "fiduciaries" who misuse assets of a resident, if that misuse results in "disqualification" of the resident for Medicaid, as we discussed earlier this month.