Guardianship firm seized by marshals - Albuquerque Journal

Guardianship firm seized by marshals

Copyright © 2017 Albuquerque Journal

A Final Four basketball junket. Caribbean cruises and other luxury vacations. Purchases at an Albuquerque RV Center and a Mercedes-Benz dealership.

The alleged lavish spending by the co-founders of one of the state’s largest nonprofit guardianship firms was financed out of the accounts of their special needs clients, according to the U.S. Attorney’s Office. And on Wednesday, a multiagency federal task moved to put a stop to the alleged decade-old embezzlement scheme involving millions of dollars with the indictment and arrests of the co-founders of Ayudando Guardians, a nonprofit guardian/conservator company based in Albuquerque.

Susan Harris, 70, and Sharon Moore, 62, were taken into custody Wednesday, and both women are to appear at detention hearings today at 9:30 a.m. in U.S. District Court in Albuquerque.

State court records show Ayudando as having been appointed by state district judges to serve as guardian, conservator or personal representative in more than 350 cases since 2000. The company’s publicly available 990 tax form for 2015 said the company provides guardian and conservator services to the elderly, veterans, the disabled and the homeless.

The 28-count federal criminal indictment alleges millions of dollars were embezzled from client accounts since the company was created in November 2006. The charges include conspiracy, mail fraud, aggravated identity theft and money laundering.

“This case is all about the victims,” acting U.S. Attorney James D. Tierney said in a press release. “The victims in this case relied upon Ayudando to manage their finances and meet their needs. If the allegations in the indictment are true, the principals of Ayudando cruelly violated the trust of their clients and looted their benefits. Federal law enforcement has now stepped in to ensure that the looting stops.”

Efforts to reach defense attorneys for Harris and Moore were unsuccessful late Wednesday.

According to the indictment, Ayudando receives government benefit payments from the U.S. Department of Veterans Affairs and U.S. Social Security Administration on behalf of many of its clients, and acts as a fiduciary or representative payee for these clients by paying their expenses and maintaining the balances for the benefit of the clients.

The actual number of clients whose accounts have been affected wasn’t detailed in the U.S. Attorney’s Office press release, which said the corporation provides services, including financial management, to hundreds of individuals with special needs.

Ayudando also is under contract with the state Developmental Disabilities Planning Council to provide guardianship services to New Mexico residents who are eligible for Medicaid or a similar public benefit and who have been deemed incapacitated.

The company’s 2017 contract with the state was capped at $640,800, according to state records. Under the contract, the company was supposed to purchase a bond for the indemnification of losses and submit to audits.

In addition, court-appointed guardians and conservators are required to submit to the court an annual report and/or financial accountings for each client.

Marshal take over

The U.S. Marshals Service on Wednesday took control of Ayudando’s business operations to ensure that victims of the crimes charged, who include disabled veterans, continue to receive the “services they deserve and are entitled to,” U.S. Marshal Conrad E. Candelaria said in a press release.

Federal authorities also received a court order to take receivership of the corporation, which has its headquarters on Central SE and has an office in Mesa, Ariz., according to its website.

The order authorizes the U.S. Marshals Service to operate the business to ensure assets are not improperly spent or removed, and that the interests of Ayudando clients are protected as the criminal case goes forward.

Ayudando clients or relatives of clients who wish to speak to someone about their accounts or expenses can call Ayudando, which is being operated by the U.S. Marshals Service.

Tax forms filed by the corporation for 2015, the most recent year for which records are available, show Harris earned $138,230 a year as president of Ayudando and Moore was paid $126,720 annually.

Stealing the money

The indictment described some of the ways the two women allegedly stole from clients.

For instance, Harris wrote 12 checks totaling $457,883 on the client reimbursement account from June 2011 to March 2014 for personal purposes, including checks of $50,950 made out to Mercedes-Benz of Albuquerque and $26,444 to Myers RV Center. Harris is accused of using an Ayudando credit card to pay $140,790 to cover luxury vacations for herself and others, including the cruises and a basketball junket, knowing that Moore would pay off the charges using client funds, the indictment alleges.

Harris and Moore allegedly used $392,623 from the Ayudando client reimbursement account to pay off balances on a company credit card used by the defendants and their families for personal purposes.

As part of the alleged scheme, which federal prosecutors described as “sophisticated,” Moore in 2016 allegedly mailed fraudulent documents to the VA that falsely represented balances in 10 client accounts, claiming the accounts had an aggregate balance of more than $1.9 million when the actual value was $72,281.

Ayudando, Moore and Harris also are accused of engaging in aggravated identity theft by using their clients’ names, dates of birth, Social Security numbers and VA file numbers to commit mail fraud.

The federal indictment comes at a time when the FBI is believed to be assisting in the investigation of an Albuquerque trust company operated by CEO Paul Donisthorpe.

State financial regulators have found a minimum of $4 million missing from client trust fund accounts managed by Desert State Life Management. About 70 clients are affected, many of whom are physically or mentally disabled or elderly. The money allegedly went into private companies controlled by Donisthorpe.

No criminal charges have resulted, but the U.S. Attorney’s Office has filed a forfeiture petition to seize three of Donisthorpe’s properties, alleging a scheme to defraud vulnerable clients.

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