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 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 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 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 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 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 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 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 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 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 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 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 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, 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, 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, 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. 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 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 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, 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 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. 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 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 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 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. 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 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, 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 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 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. 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, 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. 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, 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 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. 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, 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, 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. 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 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 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 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 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 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 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. 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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. 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 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, 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 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 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, 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. 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, 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 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 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 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 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 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 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, 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 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 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. 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 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 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 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 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 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 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 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 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 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 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 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 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, 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, 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, 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. 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 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 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, 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 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. 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 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 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 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. 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 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, 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 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 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. 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, 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. 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, 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 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. 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, 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, 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. 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 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 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 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 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 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 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. 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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. 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 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, 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 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 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, 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. 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, 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 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 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 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 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 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 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, 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 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 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. We'll be back tomorrow with another Big Take. Um um hm