Before a Bensalem man entered Bucks County prison to serve a 10-month sentence, he asked his fiancée to watch over his finances.
She made sure his bills were paid -- as well as her own, unbeknownst to him, police said.
 |
| Cecillia Sarchilli (left), Virginia Marquardt |
In a matter of months, the woman spent nearly $230,000 on vacations, breast implants, home repairs, furniture, school tuition and financial penalties, police added.
She cashed in certificates of deposit and bonds in his name; withdrew money from his IRA, incurring penalties; and she wrote checks for her business and personal attorneys, authorities added. She opened credit cards in his name, too, they said.
The woman even attempted to obtain a loan on the man’s home, according to Bensalem police, who filed theft, forgery and related criminal charges against her in December.
But recently, the Bucks County District Attorney’s Office withdrew all charges against the 51-year-old Warrington woman, a decision that didn’t surprise some attorneys.
That's because the woman had the legal authority to spend her boyfriend’s money. And that is the power behind the power of attorney, a legal document granting its holder the ability to act on another’s behalf in private affairs, business or legal matters.
When used appropriately, the document is a valid tool to protect assets and pay bills for someone who's unable to oversee or control his or her financial interests. It also avoids the more drastic measure of appointing a legal guardian, legal experts and consumer advocates say.
But there are many misconceptions about how power of attorney works, said Debra Kroll, a law professor at Temple University’s James Beasley School of Law.
Among the most prevalent mistakes is the belief that once granted power of attorney, the person has sole control over the representative’s financial decisions. Not true, said Kroll, who teaches about law and aging. The agent can make financial decisions only if the person is mentally incapacitated.
But as recently as 15 years ago, Pennsylvania courts had a different opinion of the documents. Generally, the courts held that agents acting under broadly worded power of attorney couldn't be held liable for misusing the assets of a person they represented, legal experts said.
As a result, police and district attorneys were less inclined to prosecute individuals with power of attorney for using the assets they controlled for their personal benefit.
"People took advantage of them (powers of attorney) and the law didn’t recognize it the same way," Kroll added. "Now, there has been so much abuse of them and so many problems, now it’s becoming recognized."
'IT’S GREED'
The alleged misuse of power of attorney has led to several high-profile criminal cases in which the victims — or their heirs — were bilked out of hundreds of thousands of dollars.
Last year, Bensalem resident Virginia Marquardt, 65, pleaded guilty to stealing more than $300,000 from a 67-year-old neighbor who put her in charge of her finances after she was diagnosed with brain cancer and placed in a nursing home.
Prosecutors say Marquardt transferred the woman's money into her bank account and used it to save her husband's failing businesses, buy him gifts and send him on vacations. The victim now has a court-appointed attorney as her guardian; the guardian will handle her estate as well as the restitution payments from Marquardt.
The thefts went undiscovered until 2011, after Marquardt, who was eventually sentenced to house arrest, stopped paying the woman's nursing home bills.
In January, 52-year-old former banker Cecilia Sarachilli of Bristol was charged with using her financial knowledge to steal nearly $300,000 from the estate of a former friend who died in 2011. The woman had made Sarachilli her power of attorney and trust executor.
But rather than pay the woman’s beneficiaries, Bensalem police said, Sarachilli diverted money from the trust accounts, took out a line of credit on her friend’s home and used credit cards in the name of her friend. Last week, charges of forgery, theft and related offenses against her were forwarded for trial to Bucks County Court in Doylestown.
Bucks County assistant district attorney Marc Furber says his office is seeing a trend with criminal allegations involving unrelated third parties who are granted control over the assets of incapacitated people. The common thread among the cases is that the victim is often vulnerable, isolated and without close family members, he added.
Kroll, the Temple University law professor, said she doesn't see a lot of unrelated third-party power of attorney situations, but she predicts that one of the biggest looming problems that baby boomers will face is no one to name as power of attorney, which leaves the courts to appoint a legal guardian.
"(Older adults) ask my students, will they be their power of attorney," Kroll added. "They’re desperate. I get asked all the time."
Using a third-party power of attorney "greatly" increases the chances of financial exploitation, said Bensalem Detective Stephen Clark, who leads the department’s financial investigations.
“(It’s) greed,” he added. “People think that they won’t get in trouble or no one is watching.”
Bensalem's Clark said people now do realize they can be charged criminally for misusing money.
One man who had power of attorney for an elderly woman in a nursing home called police when he found the woman had no money left. He didn't want police to think he had used it inappropriately. After an investigation, police found the woman gave away the money before she went into the nursing home, he said.
“My point is, he read an article and saw that people are now being charged criminally and he called police to report it.”
POLICING POWER OF ATTORNEY
About 10 percent of the 50 calls the Bucks County Area Agency on Aging’s protective services unit receives each month involve financial exploitation involving power of attorney, supervisor Chuck Danfield said. Most complaints come from parents who claim reckless spending by their adult children or other family members who control their assets.
"Some people don't realize the extent of the power they're giving" with power of attorney, Danfield added.
Often, parents or grandparents are reluctant to pursue criminal charges because the person with power of attorney is a family member, said Kroll, the Temple law professor.
Bucks County deputy district attorney Antonetta Stancu declined comment when asked why the charges were withdrawn against the Warrington woman. Stancu said only that the DA's office didn't feel it had enough evidence to pursue the case. Bensalem Detective Clark, who handled the case, declined comment on the decision to drop the charges.
The woman's private attorney, Ray McHugh, said his client didn't commit a crime since she had legal control of her fiancee's finances under his power of attorney. McHugh added that his understanding is that the DA believed the issue was a matter for the civil courts to resolve.
Falls attorney Ron Elgart agreed that people who misuse power of attorney can be held accountable in civil court, but by the time the theft is uncovered, he said, there often is little money left and little hope for full restitution.
Elgart added that he's "always" hesitant about drafting a power of attorney for a client.
"If the power of attorney is broad, it can cover every asset you own," he said. "This person is handling all the money you have in the world."
Historically, most disputes involving power of attorney ended up in civil court, said Katherine Pearson, a law professor at Penn State University’s Dickinson School of Law.
That changed in 1999, when the Legislature amended the law creating a “presumption” against the rights of someone with power of attorney to use those "powers" to make "self gifts," said Pearson, who has written a book on financial exploitation involving power of attorney.
State law now provides that, in most cases, people using power of attorney are agents with a fiduciary duty to act in the best interest of the person they represent. Unless the person specifically waives informed consent, a power of attorney agent is legally required to use “reasonable caution and prudence,” she said.
The Bensalem Police Department has been conducting criminal investigations into power of attorney and executrix of trust accounts cases only for the last five years, Clark said.
"In the past ... I don't think anyone was really policing the POAs,” Clark said. “Most law enforcement agencies don’t have the manpower, resources or knowledge of how to pursue these investigations. Cases like these are long, confusing and involve retaining a lot of financial documentation."
Thanks for sharing this informative post with us. There are plenty of details that you provided in this article for some helpful tips for a power of attorney. Have a wonderful rest of your day.
ReplyDeleteLawyer Philadelphia