Thursday, September 3, 2009

Stealing Your Parents Blind 101

Ask Clara Philpot how she’s doing, and she’ll answer with a beaming smile and a hearty “Fantastic.” Ask the 87-year-old who is president or the name of the dog napping in her lap and she can’t say.

Philpot, who was diagnosed with Alzheimer’s disease in 2002, also can’t explain how or why she borrowed almost $1 million to finance a luxury home in Sherwood and immediately deeded half to Gayla and Jeff Ross, a daughter and son-in-law who took care of her.

After looking at the evidence, however, a Clackamas County jury took less than two hours to find Gayla Ross guilty of aggravated theft and first-degree criminal mistreatment.

Ross now faces prison. She will be sentenced Sept. 8 along with her husband, Jeff Ross, a former Washington County sheriff’s deputy who was convicted of first-degree criminal mistreatment.

Philpot’s net worth now is zero — she gets by on Social Security — and she could soon be homeless. The debt on the Molalla house she and her husband bought 43 years ago, and once owned free and clear, now exceeds the property’s value, and she hasn’t made a mortgage payment for two years.

Three years ago, Clara Philpot appeared to have the resources to comfortably live out her days at her Molalla home, cared for by her children and other loved ones.

Then Gayla Ross took command.

“It took Gayla less two months to squander a lifetime of work,” said Chris Farley, a court-appointed guardian who now manages the details of Philpot’s foggy life.

Sense of entitlement

The sad-but-true reality is that more people are preying on the elderly, according to prosecutors, police and adult protective service workers.

Two years ago, “there weren’t that many” cases and they didn’t go to trial, said Bryan Brock, a Clackamas County deputy district attorney who specializes in such crimes and prosecuted the Rosses. “Now I’ve got a dozen of them.”

Experts cite several reasons for the surge: the growing number of potential victims, the bad economy - and greed.

“I think there’s a larger sense of entitlement by adult children. Mom and Dad’s money is theirs even though Mom and Dad aren’t dead yet,” said Patricia Piazza, who oversees Philpot’s finances and operates a professional guardian and conservatorship business with Farley.

Parents who bail their adult children out of problems may “create a larger sense of entitlement,” Piazza said.

Clara and Hubert Philpot aided Gayla and Jeff Ross several times, once mortgaging their home so they could lend the Rosses $75,000. The Rosses filed bankruptcy in 2003, which erased their legal obligation to repay the loan.

In a similar Multnomah County case, two relatives of an 83-year-old Portland woman were charged with theft and criminal mistreatment after they gained power of attorney, took all the woman’s possessions and sold her house. The relatives thought Evelyn Roth was dying, but she made a remarkable recovery and last week testified against the relatives.

“They robbed me blind,” Roth said. “Everything was for money, just to get money, money, money.”

$5,600 house payments

Gayla and Jeff Ross don’t seem like people who would raid a feeble relative’s bank account. They are regular churchgoers.

He worked in law enforcement before retiring on disability.

Jurors heard conflicting stories told by Clara Philpot’s daughters, Ross and Bobbie Page.

After Hubert died in June 2006, Ross and Page stepped in to care for their mother. Their father had made all the money decisions. Now alone, Philpot granted her daughters the legal authority to make certain decisions on her behalf. A rift soon developed, and Ross assumed control of her mother’s affairs.

The Rosses used Philpot’s money to pay off a personal $3,300 debt and to occasionally replenish their bank account.

Under Ross’ direction, Clara Philpot took out a $352,000 mortgage on her Molalla home. Ross used that money as a down payment on a home in Sherwood and obtained a $609,000 mortgage in Philpot’s name.

The day after the deal closed, Philpot transferred a 50 percent interest to the Rosses. Legally, Philpot had sole responsibility for mortgage payments that exceeded $5,600 a month — more than four times her monthly income.

Within a week, one of Philpot’s relatives anonymously notified state welfare workers about the deals, and the Sherwood house was lost to foreclosure.

The transactions mystified Chris Farley, a court-appointed guardian, whose firm now has responsibility for Clara Philpot’s physical and financial well-being.

How was Philpot — a woman who doesn’t know what year it is and can’t remember her husband’s name — able to borrow almost $1 million with a monthly income of $1,272? Why would she give away half-ownership in a house that was her only asset?

“I wish I knew,” said Farley, who sued the Rosses and the mortgage companies involved in the transactions. The case is pending.

Financial crimes

Law enforcement officials increasingly view financial exploitation as a crime. They now share more information about potential criminal activity. Many Portland-area police agencies have special units that target financial crimes against older people.

Reports of elder financial abuse frequently “weren’t viewed as criminal by the police,” said Bob Hull, a Washington County senior deputy district attorney. “Officers viewed some of the abuse as a civil matter, so it never got sent to our office.”

“Often the bad guy is the son or daughter or some relative. For some reason law enforcement was hesitant to go after a family member who perhaps would have inherited the money or property anyway,” Farley said. “They’re not looking at it like that any more.”

Things started changing in Washington County 10 years ago when police, prosecutors and social workers started meeting to discuss cases, Hull said. The result: more criminal charges. Washington County now prosecutes 50 or 60 cases a year involving elderly victims of financial abuse.

Prosecuting elder financial abuse is challenging, Brock said.

“You often have victims who can’t tell you what’s happening to their money, because they don’t know.”

Investigators must sift through receipts and bank records to determine whether money was misappropriated.

“It’s not like you’ve got a victim with a bullet hole in the head,” Brock said.

Who decides?

The Rosses said they never tried to hide their actions.

They told jurors they love Philpot and want what is best for her. Ross said her mother was aware of and approved of the major financial decisions made on her behalf.

The Rosses said they devised a plan that would put Philpot in a beautiful home where they could watch over her while protecting her assets. Instead of spending $5,000 a month on a nursing home, the Rosses would pay the household bills and Philpot would own a home that would increase in value.

It was Philpot’s idea to give the Rosses half-interest in the house. “Mom wanted us to have the whole house,” Gayla Ross told jurors.

People who know Clara Philpot will tell you her smile can light up a room but she can’t remember what she ate for breakfast.

She certainly should not be deciding whether to give away her life savings, said Bobbie Page, Philpot’s older daughter.

“She’d answer ‘yes’ to anything you asked her.”

Source=>>The Oregonian

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