Poor oversight allows nursing home workers to plunder residents' trust funds, investigation finds

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Poor oversight allows nursing home workers to plunder residents' trust funds, investigation finds
Poor oversight allows nursing home workers to plunder residents' trust funds, investigation finds

Nursing home workers face few impediments in stealing money from residents' trust funds, according to a USA Today investigation that uncovered thousands of cases of financial exploitation.

When long-term care providers take over management of a resident's finances, the money usually goes into a trust fund that is supposed to be managed like a bank account, with regular statements to show withdrawals, accrued interest and other information. However, the system is easily gamed, the USA Today report suggests.

In the last three years, state and federal nursing home inspectors have issued more than 1,500 citations related to trust fund theft and mismanagement, according to the newspaper. More than 100 nursing home employees have been prosecuted for stealing from trust funds, and about a third of these cases involved at least $10,000.

The report presents the case of Lee Martin as representative of this type of crime. Martin was a trusted employee and the only person handling the resident trust funds at Vicksburg Convalescent in Mississippi. The business office coordinator began skimming money from residents' accounts in 2010 and managed to steal more than $100,000 before being caught, according to court documents cited by USA Today. 

Martin was discovered because the Vicksburg administrator happened to find a photocopied check that aroused suspicion: Specifically, it was for a pair of designer jeans supposedly purchased by a resident with no legs. According to the newspaper, luck often is involved in catching these criminals.

Government inspections focus mainly on quality of care, and surveyors are not trained in forensic accounting; however, 90% of long-term care ombudsmen surveyed by USA Today said tighter oversight is needed in this area. This suggests that many people might be getting away with this type of theft, according to some officials. A spokesman for the nation's largest long-term care provider association disagreed that the problem is common.

"It doesn't happen very often and when it does, it's tragic," Greg Crist, senior vice president of the American Health Care Association, told USA Today. "There are restrictions on how we collect, hold and disperse these funds. It's very regimented.”

Crist noted that AHCA has teamed with the Consumer Financial Protection Bureau to implement safeguards against financial exploitation of seniors. Crist was not available to comment further to McKnight's on Wednesday.

Federal law mandates that nursing homes protect resident funds through mechanisms such as a surety bond, but the damage caused by these crimes goes beyond dollars and cents. It affects staff morale as well as residents' wellbeing, according to Vicksburg Convalescent Administrator Amy Brown, who uncovered Martin's crime.

"The whole thing was devastating; it took a toll on everyone," Brown said in the article. "We have a really good building, a really strong, close staff, and we all work hard to do the best job we can, so this was just a slap in the face to everyone."