State of California and Failure to Protect? Funding Shortage Inhibiting PFB’s Effectiveness

Janet Phelan
November 19, 2010
San Bernardino County Sentinel

When Janis Schock learned that her complaint of conservator wrongdoing, submitted to the California Professional Fiduciaries Bureau, had been closed without an investigation taking place, she was dumbfounded. The communication from Angela Bigelow, analyst and sole full-time employee of the Professional Fiduciary Bureau (PFB), stated that the court must first make a determination of wrongdoing before the PFB could take action. Janis Schock wasn’t so sure this was true.

As it turns out, Schock was correct.

The Professional Fiduciaries Bureau is a relatively new addition to consumer oversight agencies and is lodged in the Department of Consumer Affairs. The PFB was established by an act of law in 2006, following public outcry engendered by a 2005 Los Angeles Times series which revealed questionable practices by California conservators, who were at that time unlicensed. The bureau, as written into law, is mandated to license professional fiduciaries, to investigate complaints and, where appropriate, to refer complaints to law enforcement. The bureau is also empowered to revoke a license based on complaints and to take action on unlicensed activity. The Professional Fiduciaries Act defines a professional fiduciary in this manner:

“Professional fiduciary”means a person who acts as a conservator of the person, the estate, or person and estate, or guardian of the estate, or person and estate, for two or more individuals at the same time who are not related to the professional fiduciary or to each other.

Conservators are generally appointed through court proceedings when there are allegations that a person is lacking capacity; in other words, becoming forgetful or otherwise unable to handle his or her affairs. These allegations need meet no standard of proof, which provides an opening for abuse of process. The Government Accountability Office recently released a report citing multiple instances where a conservator had abused his powers to the detriment of the conservatee. Several grassroots groups have sprung up to address the issue of abusive conservatorships, which are reported to be taking place countrywide.

The Bureau did not open its doors for business until the Summer of 2008. Governor Schwarzenneger, who had signed the bill establishing the PFB in 2006, subsequently line- item vetoed the funding for the infant agency two years running. In an interview with this reporter in 2008 for an article published in The American´s Bulletin, Assemblyman Dave Jones, who was a primary author of the bill, voiced his surprise that the Governor acted to gut these bills without any such recommendation from his own party. “What is particularly troubling is that this is a cut that was not on the Senate Republican cut list. The Governor went out of his way to make that cut.”

After two years in operation, the bureau appears to have fallen short of its mandate and is providing less than comprehensive oversight of the fiduciaries it is mandated to watchdog.

Janis Schock had complained that a San Bernardino conservator, Ron Olund, had breached his fiduciary duties to Maxine Douglas, who is Schock’s mother, allowing numerous bills to go unpaid and utilities to be shut off. She reported that Douglas’s home nearly went into foreclosure as Olund neglected to pay the home association fees for several months. She also alleged that Olund had deliberately isolated her mother from family and friends.

The Douglas conservatorship is being heard in San Bernardino Probate Judge Michael Welch’s court. A recent Sentinel article raised concerns that Welch may have perjured himself in another conservatorship proceeding. Other questions have arisen as to Welch’s property dealings and Welch has refused to respond to queries as to whether he or other, undisclosed parties are paying back his multiple home loans.

The closing of Schock’s complaint by PFB analyst Bigelow was brought to the attention of the Department of Consumer Affairs. Consumer Affairs legal counsel Gary Duke expressed dismay at what Bigelow had done and quickly concluded that she had signed off on the complaint “in error.” The Schock complaint was subsequently reopened.

The complaint was then assigned to an investigator within the Department of Consumer Affairs. Janis Schock reports that investigator Jane Valdez subsequently told her that no action would be taken. According to Schock, Valdez did not deny the allegations contained within Schock’s documented complaint. Schock was told that her complaint would go to file, to be reviewed should other complaints come in on Olund which “show a trend of misconduct.”

Schock questions the thinking behind this. “If someone drives drunk and runs someone down, do they not get prosecuted until they do it a second or third time?” she asks.

The Sentinel has reviewed actions taken by the bureau as well as interviewed a number of complaints. A picture has emerged of an agency which is under-funded, under-staffed, and has consequently failed to perform the duties it is chartered to attend to. In the face of inquiries from the press and public, it has repeatedly attempted to obscure its activities and the outcome or premature closure of its investigations.

The PFB, which currently has one full time employee and one half time bureau chief, maintains a board of seven members. At the present time, two professional fiduciaries — Lisa Berg and Daniel Stubbs — sit on the board, as well as supervising probate investigator Sharon O’Neill and two public members. Two seats remain vacant, including a seat reserved for a representative from a nonprofit organization advocating on behalf of the elderly. A recent board meeting found the members focused on concerns about raising more revenue for the bureau, which has taken out two loans totaling over a million dollars in order to stay solvent. The bureau reported that $357,000 for the current year covered only two staff positions and that a mere $50,000 was allotted for enforcement. The minutes reflect concerns that “one big case would break the budget.”

In its first annual report, the PFB reports making no investigations and no referrals to law enforcement. Adding veils of obscurity to its functioning, the PFB refused to supply this information when the Sentinel inquired as to these statistics. Rather, legal counsel Gary Duke stated that this information was not discloseable, citing government code 6254 (f). When the Sentinel persisted, the PFB stopped responding to Public Records Act requests. The Public Records Act mandates a response within twenty days.

In fact, the information which Gary Duke refused to disclose is readily available to the public in the DCA’s annual report,which is on line.

Promises by the DCA to produce documents have also gone unfulfilled. Last summer, the Sentinel had requested input from the DCA as to the cost to the state of the bureau’s efforts with regard to Redlands-based conservator Melodie Scott, who has been the subject of numerous complaints from family members of individuals under her care. Scott’s professional fiduciary license was the first and only such to be denied by the head of the Department of Consumer Affairs after contested hearings last year in Oakland Administrative court. In a response in August of this year, DCA Press Officer Russ Heimerich promised to research the financial impact to the state and to respond with the requested details. At the time of going to press, he has not done so.

Joseph Quattrochi, Jr., met with a similar lack of accountability in his dealings with the Professional Fiducary Board. His complaint to the PFB alleged criminal misconduct by Melodie Scott and was submitted over a year ago. He states he has received no response whatsoever from the bureau. The Sentinel has reviewed a number of emails sent by Quattrochi to Gil DeLuna, head of the PFB, spanning several months, in which he repeatedly requested a response to his complaint and also expressed bewilderment as to why Melodie Scott was not in jail. Quattrochi, whose father had been under a conservatorship with Melodie Scott, has lodged a lawsuit in federal court against the former conservator.

Gina Rilke, whose husband was also under a conservatorship with Melodie Scott, has expressed frustration that her report to the Professional Fiduciary Board also went unanswered. When the Department of Consumer Affairs, via Gary Duke, declined to state whether or not the agency had contacted law enforcement when Melodie Scott persisted in advertising herself as a professional fiduciary after her license had been denied, Gina Rilke went to the Redlands Police to make the report. In a Catch-22 like maneuver, she was then informed by the responding officer, Eric Strobaugh, that only the DCA could make such a report.

The Professional Fiduciaries Act details that such advertising by an unlicensed party constitutes a misdemeanor.

Rilke reports that in a recent conversation with Duke he told her that her complaint to the bureau is moot at this time, given that Melodie Scott is unlicensed. Misstating the powers of the Professional Fiduciary Bureau, which include contacting law enforcement, Rilke writes that Duke told her that “denying/taking away a license is really all the power the Bureau has to discipline any violations.” Says Rilke: “I told him that I had tried for three hours to have a police report filed, but the officer insisted that it was the bureau’s responsibility to follow up on [such] violations—Mr. Duke said that he had heard from others that officers at the Redlands police department had told them the same thing. Duke said it really is the law enforcement agency’s responsibility to deal with it, but they don’t because they have other things that are more pressing from their point of view.”

Rilke also has alleged Scott stole more than sixty thousand dollars during her tenure as conservator of Rilke’s husband, who is disabled.

Gary Duke has informed the Sentinel that the Bureau made an “economic” decision and chose not to investigate the criminal allegations contained in the numerous reports the bureau received on Scott. “We thought we had enough on her in terms of lying on her application,” he stated in a recent interview. By declining to investigate criminal allegations, the bureau lessened the likelihood that she would be prosecuted in criminal court.

Scott’s license denial is under appeal and is scheduled to be heard in Sacramento Superior court in December. Sources close to Scott state that she remains confident that the judge will grant her a license.

Lauren Collins also reported Conservator Stevan Chandler to the Professional Fiduciary Bureau last June and received no response. In the intervening months, Chandler has informed the family that they have less than six months before they lose their home, due to a reverse mortgage placed on the home to pay for the conservatorship. Jeanette Spence, who has multiple sclerosis, has never had a capacity determination and the family has insisted that the conservatorship is completely unnecessary. While physically disabled due to her illness, Spence was alert and lucid during an interview with the Sentinel last year and clearly stated she wanted the conservatorship ended. “Chandler just wants my money,” she said.

Carolyn Perkins, whose parents were under a conservatorship with professional fiduciary Linda Banta has told the Sentinel that she was discouraged from filing a complaint by former Professional Fiduciary Bureau employee Janice Nance. Perkins alleges Nance told her it wouldn’t make any difference. Says Perkins, “Janice very definitively told me not to send a complaint to her but to complain to the judge. I was devastated at the time because I had carefully read the code of ethics and realized conservator Linda Banta had purposefully, deliberately and egregiously violated them, particularly with regard to emotional well-being and family connections.”

Echoing widespread concerns which resulted in the California Legislature passing the act which called the bureau into being, Perkins said, “Of course, I didn’t bother to write the judge because the judge has been complicit all along.”