Guardians face more scrutiny

Many people with disabilities rely on guardians or conservators to help with their day-to-day financial tasks. This work can be gratifying to those who do it, and critical for those who need help.

But when guardians and conservators financially or physically abuse their clients’ vulnerabilities, the results can be disastrous. Recent cases in Minnesota illustrate why more protections are needed.

“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 Minnesota Attorney General Lori Swanson.

Swanson’s office recently prosecuted a guardian, Terri Ann Hauge d/b/a Estate Resources, Inc. Hauge was suspended from the practice of law in Minnesota in November 1995 for lying to clients and mishandling cases. Because existing law does not require disclosure of professional licensing actions, Hauge subsequently wound up serving as guardian for dozens of vulnerable adults.

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, social services workers found that he was living in a squalid apartment with no edible food.

In another, Hauge refused to provide food or money to a ward that had just been discharged from emergency medical care. She left him alone in a motel in an unfamiliar town without any money or 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.

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 removed as the woman’s guardian and conservator.

In 2012 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.

In another case, a Woodbury woman was charged in January with a gross misdemeanor after the 19-year-old woman with disabilities in her care was exploited sexually. Cheryl Ann Tschida, 50, is accused of taking the woman to various locations in Roseville and St. Paul, where she was forced to have sex with several different men. The victim is now in a group home.

According to media reports, Washington County had allowed Tschida to become a guardian for adults. Tschida was convicted in 2008 of neglecting a baby who was abused in her unlicensed day-care center.

State lawmakers, Anoka County Attorney Tony Palumbo and Swanson are demanding changes, with a focus on preventing problems through stepped-up background checks and other measures. Before the 2013 legislative session began, they announced proposals to provide greater protections to vulnerable adults under the care of guardians and conservators in Minnesota.

Rep. Debra Hilstrom, (DFL-Brooklyn Center) and Sen. Ron Latz (DFL-St. Louis Park) are authors of the bill, which was introduced in mid-January. Hilstrom chairs the House Judiciary Committee. Latz chairs the Senate Judiciary Committee.

The legislation would improve Minnesota’s background check process for guardians and conservators and provide stronger safeguards against financial exploitation. Background checks would be expanded 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.

The legislation would also require 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. Another requirement would be that guardians disclose any changes in their criminal histories. Any disclosures would have to be made within 30 days of a criminal incident. Also, background checks would be conducted every two years. State law currently requires background checks only once every five years.

“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 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 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 Latz.

In a separate action, Rep. John Lesch (DFL-St. Paul) is asking that penalties be strengthened against those who abuse vulnerable adults in sex trafficking cases. Lesch, who works as a prosecutor for the City of St. Paul, said he will introduce changes that would enable judges to give enhanced penalties in such cases. Lesch said he and other prosecutors and law enforcement officials are hearing about more sexual exploitation cases involving people with disabilities. As of the Access Press deadline, Lesch’s bill hadn’t been introduced.