The US adult guardianship industry is regulated loosely and ripe for exploitation of elderly and disabled people, Bloomberg Law found in a six-month investigation. Here is Part 1: The Profiteers.
SANTA FE, N.M. – Lorraine Mendiola was desperate to help her adult son, an aspiring electrical engineer battling mental health demons that sent him spiraling through psychiatric hospitals. So in 2011, heeding advice from a psychiatrist, she sought to become his guardian.
When Mendiola got to court, her lawyer told her a private company, Ayudando Guardians, could oversee Matthew Mendiola’s well-being and finances. Mendiola was shocked. She had never heard of the group. But her attorney persuaded her it could handle the guardianship’s complexities, and “you can just be the mom.”
Mendiola’s shock spun to outrage after a judge assigned the company as Matthew’s guardian. Ayudando Guardians put her son in a boarding home where he was beaten in the face and swarmed by bedbugs. Later it placed him in Albuquerque, N.M., where Mendiola found her son living in an incomplete garage with exposed wiring, no shower, and no fire escape. In five years he went through four case managers and seven boarding homes.
For years, Mendiola protested Ayudando Guardians’ treatment of her son and its handling of his finances. Everywhere she went, from the company to a state guardianship office that paid Ayudando $7 million over a decade, doors slammed. In 2016, Santa Fe District Court Judge Sarah Singleton even ordered her to stop “the constant communications to the Guardian and Office of Guardianship.”
Mendiola compared fighting Ayudando, the state, and courts to battling organized crime. “I likened our situation to a guardianship cartel,” she said. “It feels like a Mafioso situation.”
A year later a Department of Justice investigation unmasked Ayudando as a fraudulent house of cards. The case secured lengthy prison sentences for the company’s directors, who stole nearly $12 million from 1,000 vulnerable clients to fuel lavish lifestyles filled with international cruises, Mercedes-Benzes, gate-protected homes, and $300,000 worth of skyboxes at college basketball games. As Ayudando’s executives globe-trotted, some of their disabled and needy clients were left homeless.
Ayudando’s collapse reveals the dark world of adult guardianships in the US. Judges, lawyers, and state officials ignored warning signs about a company the system long held in high esteem.
Nationwide, guardianships are often dogged by ripe greed, scant scrutiny, scattershot rules, and flimsy protections for the vulnerable people put under court-ordered control.
A Bloomberg Law investigation found a national network in peril:
- Judges and other officials in some states don’t have to have law degrees before issuing adult guardianship orders. In Georgia, a former Realtor turned probate judge improperly revoked a young adult’s right to vote without first holding a hearing and restricted her rights on everything from driving to spending money. When the woman’s mother challenged the system, the judge threatened to throw her in jail.
- Just 14 states certify guardians, and no national standards limit the caseloads they can juggle. In Indiana, one professional guardian has taken at least 420 clients since 2016, most referred by nursing homes. Experts say that signals a system lacking meaningful controls.
- Regardless of the size of the person’s bank account, guardianships can generate substantial fees amid long-running court battles. In New York, lawyers serving as guardians and counsel for famed artist Peter Max each bill hundreds of thousands of dollars a year, with one charging $550 an hour. The more they tangle with Max’s family for control of his priceless art, the more they seek in fees.
- The system needs more oversight. More than 1.3 million abuse claims are filed each year with local Adult Protective Services offices, but no one is counting how many involve guardians. Few states require independent attorneys to represent people facing guardianship.
To read the full 5 part article, In the Name of Protection, Visit the Bloomberg law website.