Arizona Department of Veterans Services' Fiduciary Program Gets Slammed by the Arizona Supreme Court
I don't always remember to honor our veterans. Typically, I work through Memorial Day. (And Labor Day, for that matter.) I can't even tell you when Veterans Day is.
But this year, I found myself riveted by festivities for the most obscure veterans holiday we have in Arizona: Vietnam Remembrance Day. I'd never even heard of this particular celebration before it showed up on the TV news last Sunday, yet I couldn't look away.
And that's because, for the first time, it feels personal. My little brother just joined the Marines, and I was lucky enough to attend his boot camp graduation earlier this month in San Diego.
I'm very proud of him, but I'm also worried. Worried because — unless you've got a family member serving — it's all too easy to forget to honor our military. Worried because my brother could face serious repercussions for his enlistment during this time of war. Worried because, when war leads to catastrophic injury, it's all too easy to stick our bravest citizens with the worst care.
I'm thinking of the Walter Reed Army Medical Center, exposed for its neglect of veterans and unsatisfactory conditions in 2007. Closer to home, I'm thinking of the nursing home run by the Arizona Department of Veterans Services: The feds fined the agency $10,000 for substandard conditions there three years ago.
I'm also thinking about Patrick Chorpenning. An appointee of Governor Jane Hull, Chorpenning ruled the roost at Veterans Services for years before the Walter Reed scandal made Arizona take a closer look at its Veterans Home.
Even then, when Chorpenning was pushed out, he vowed that he'd be exonerated. Not quite: Last November, Chorpenning was indicted on a series of felonies. A scathing report from the state's auditor general found that he'd broken state law to hire his son (as a grant writer) and his wife (as an interior decorator) — and billed the Veterans' Home. The auditor general suggests he was literally stealing food from the mouths of hungry veterans to pay his family members.
And in recent weeks, it's become all too clear to me that Veterans Services' problems don't end with Chorpenning. There hasn't been a word about this in any of Arizona's dailies, but a series of consent orders and audits have revealed serious mismanagement of the program that supplies guardians and conservators for incapacitated veterans.
Veterans who qualify for the agency's services pay just $75 for its monthly services, which include both watching over their physical well-being and safeguarding their finances in Probate Court. That's an important service. But earlier this year, the Arizona Supreme Court, which licenses fiduciaries, released both a blistering audit and a formal censure of the agency's program.
I'll get to the censure in a minute, but the audit has led to another, more detailed report in Maricopa County. After the court referred the audit to all the probate courts in the state, Probate Court Judge Karen O'Connor conducted a review of her own, looking into every case in which Veterans Services was responsible for care.
O'Connor's order, issued in March, found that Veterans Services had shown "a pattern and practice of failing to consistently discharge its fiduciary duties by failing to comply with statutory reporting requirements, court orders, and/or court rules" in 27 cases. She didn't just put the agency on probation; she also stripped it of the ability to take on new cases.
Now, it's important to note that most of what O'Connor found wasn't malicious. Veterans Services guardians, or their attorneys, were simply sloppy. They didn't file annual reports in a timely fashion. They didn't close out estates as quickly as they should have. Cases languished, and sometimes heirs didn't get their inheritances as quickly as they should have.
But paperwork errors can often conceal serious problems. Nancy Swetnam, director of the certification and licensing division of the Arizona Supreme Court, tells me that the court is a stickler for these annual reports simply because they're the key to detecting fraud when it occurs.
"If the judges don't get that information, they don't get the information they need," she told me. "And in some prior cases where, unfortunately, we've had fiduciaries stealing their client's money, one of the red flags has been the fiduciary not filing their reports."
(Michael Bosco Jr., the private attorney who's represented Veterans Services on almost all the cases in question, didn't return my calls for comment.)
No one can say that's happened here. But the paperwork problems are serious enough to get the court's full attention. Swetnam tells me they're already planning another audit for September.
In a series of columns about a little old lady named Marie Long, Arizona Republic columnist Laurie Roberts has excoriated the lawyers and commissioners working in probate court — arguing that they helped themselves to $1.3 million of Long's assets and left her in the poorhouse.
All that expense could have been avoided, Roberts has suggested, if only Long's niece had contracted with the Arizona Department of Veterans Services for her guardianship. Because Long's late husband served in the military, she could have availed herself of its services. For whatever reason, Long's niece instead selected private — and therefore more expensive — guardians.
But as all these audits and reports make clear, Long's niece may have been wise to resist the department's services, no matter how cheap.
Exhibit A may well be a Pima County case that triggered a review from the Supreme Court's Fiduciary Board — and ultimately led to the censure of Veterans Services.
In that case, Veterans Services took over as guardian and conservator for an elderly man in 2005 — yet didn't bother to remediate the "potentially hazardous" environment he was living in for five months. The conditions were apparently nasty (think "possible mold" and "seepage of human excrement"), but his guardians at Veterans Services still took no action to remove him.
They were happy, however, to empty his bank account. According to a consent order issued by the Arizona Supreme Court after a family complaint triggered its investigation, Veterans Services withdrew $32,000 from the man's account without notifying his family. Since that left only $500, checks began bouncing. The consent order also notes that Veterans Services caseworkers hired an unlicensed contractor to abate the "human excrement" issue and made errors in the man's tax returns. Oops.
In her review of cases in Maricopa County, Judge O'Connor didn't find anything that awful, thankfully. But she did turn up two disturbing cases.
In one, a veteran under the department's watch died in 2006, but as of January — nearly four years later — Veterans Services still hadn't finished the final accounting. In that case, O'Connor ordered the Maricopa County Public Fiduciary to take over. But Veterans Services resisted. Its attorneys argued that they needed more time.
O'Connor, to her credit, didn't budge.
In another case, an elderly veteran died in his North Phoenix modular home in 2008, leaving behind a surprisingly sizable fortune. (Police found nearly $100,000 in cash on site at the time of his death; he had other liquid assets worth close to $1 million.)
But the man's guardian, an employee of the Department of Veterans Services, apparently found the stash too tempting. He allegedly helped himself to $800, plus an expensive silver coin. When the police were called, fiduciary Jeffrey Lake first blamed the officers on the scene, according to their report, saying they'd "miscounted" in their initial inventory. But when police verified they had witnesses, Lake refused to answer any more questions.
In November 2008, Phoenix police charged Lake with two felonies: theft and forgery.
Strangely, even after Lake's arrest, the Department of Veterans Services never formally notified the court or offered to get off the case. I didn't find even a passing reference to Lake's indictment in the file. Apparently only while O'Connor was reviewing all cases involving Veterans Services did she learn of the theft — and remove the agency, over its objections, from the case in question.
In the three years since Patrick Chorpenning was pushed out, Veterans Services has had two different directors, both appointed by former Governor Janet Napolitano. The current director, retired Army Colonel Joey Strickland, appears to be taking a hard look at his fiduciary program.
Strickland's deputy director, Robert Barnes, tells me that the agency welcomed the court's audit: "When a new administration takes over, the first thing they want is a sense of where things stand." Thanks to its findings, the agency's hired experienced people, including a new accountant. It's also exploring the idea of hiring a new law firm.
And even if the agency is chafing under the public excoriation — "we'd like to solve the problems and then tell people about it," Barnes says drily — it doesn't appear to be ducking from it. "We're talking about our most vulnerable citizens," he says. "We need to do better, and that's what we're going to do."
That's good to hear — and not only because we're celebrating Vietnam Remembrance Day, and not just because I now have a family member vested in the system. Arizona has failed its veterans for too many years.
The criminal justice system is dealing with Patrick Chorpenning. Now it's up to the state to deal with the mess left behind at his agency.
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