At the end of the month, her money dwindling, Carolyn Osterhout
would survive on peanut butter sandwiches.
She had trouble paying for both the Prozac she took for depression
and the prescription spray she needed for her asthma. For a time,
she went without either.
The widow of an Air Force veteran, Osterhout was not penniless.
She had money in the bank and received veterans benefits of more
than $1,000 a month.
The source of her troubles was Anne L. Chavis, the court-appointed
guardian who controlled her money and was supposed to look after
her.
Chavis was late paying the rent on Osterhout's apartment in
Colton. She was late sending a monthly living allowance. She was
late paying for her medical insurance, which at one point was
canceled.
"I just felt like I wanted to lay down and go to sleep and
die," recalled Osterhout, 62.
For more than a decade, the Department of Veterans Affairs and
California's probate courts entrusted Chavis with dozens of
vulnerable adults, most of them disabled veterans and their
survivors.
She exploited and neglected many of them with seeming impunity —
conduct that highlights the flaws in a broken system.
While supposedly under the supervision of the VA and the courts,
Chavis often failed to pay her clients' bills and refused to tell
them what she was doing with their money, interviews and records
show.
She arranged to buy the home of one elderly client at a discount
— while pretending that someone else was the real purchaser.
She helped a business associate inherit the estate of another
client — a senile, nearly blind World War II veteran.
She once paid a lawyer with money she took from the bank account
of an 80-year-old widow.
When VA officials and the courts finally demanded answers after
years of inaction, they discovered that Chavis had failed to
account for more than $1 million of her clients' money.
Courts have ordered her to come up with the funds.
To date, she has not paid a cent.
Chavis, 72, denied any wrongdoing and said she did her best for
her clients. "When I started doing conservatorships, I wasn't
that smart," she said in an interview. "There were
probably a lot of things that I overlooked or didn't do."
She said she lost track of her wards' finances after her
bookkeeper died in 2002 and her longtime lawyer, who helped her
run her practice, lost his license a year later. Nevertheless,
Chavis said, "I don't want to blame nobody for something I
should have been on top of myself."
Chavis said she loved her clients, many of whom suffered from
mental illnesses. She visited them regularly, she said, and always
returned calls that seemed important.
"Gee whiz, I think I've done a good job with the type of
clients that I had and the amount that I had," she said.
"It's really crazy, but I really care about those guys."
She vowed to account for all of their money.
"I'm going to pay it," she said. "The Bible says
you have to pay what you owe. And, if I owe it … I'll sell my
house."
A New Career
Chavis has a smooth, round face and kind brown eyes. A devout
Baptist, she often closes conversations with a pat of her hand and
a warm "God bless you."
Born in North Carolina, she moved to Los Angeles in the 1950s and
raised seven children while juggling different jobs. She worked as
a nurse's aide at what is now County-USC Medical Center and later
became a licensed vocational nurse.
She took a second job at the California Department of
Transportation, wearing a hard hat on road crews before moving to
a desk job. After a day at Caltrans, she often pulled a night
shift as a nurse.
Moonlighting at a Pico Boulevard nursing home in 1984, she filled
in patients' charts with work she had not done. Investigators said
she wrote fake blood sugar readings for eight diabetics and
recorded insulin doses that she never administered to five of
them.
She then put on a patient gown and slippers and curled up to sleep
in a hospital bed, according to a complaint by state regulators. A
state nursing board placed her on probation for two years.
In 1988, Chavis filed for bankruptcy protection. Her car had been
repossessed, she owed $7,100 on her credit cards and a mortgage
lender was about to foreclose on her home.
Despite these difficulties, she helped found Victory Institutional
Baptist Church in Hawthorne. After Sunday services, she served
refreshments from the back of her Jeep Cherokee.
"They called it Cafe Chavis," recalled Pastor Richard
Williams, who has known her for 30 years. "This church
wouldn't be here without her."
Williams said the complaints from Chavis' clients did not square
with the woman he knows. "I don't buy it," he said.
"If I needed a conservator, despite what you've told me, I'd
trust her with my assets."
As she was helping found the church, Chavis moved into another
line of work. She turned her three-bedroom home in the West Adams
district into a boarding house for veterans.
State inspectors who visited in 1990 reported finding soiled rooms
with torn, dirty linens. But Chavis made a favorable impression on
a VA employee who dropped in to check on a boarder. He suggested
that she become a conservator.
"What is that?" Chavis remembered asking. "What do
you do?"
No Background Check
The VA was — and is — constantly looking for caretakers
for veterans too sick to care for themselves.
For some, the VA appoints fiduciaries, who collect veterans'
benefits and pay their bills. For those with considerable savings
or large benefit checks, the government wants an added layer of
protection and seeks a conservator.
Conservators are appointed and supervised by probate courts and
draw their fees from their clients' assets. They are required to
file detailed accountings at least every two years, showing what
they are doing with their wards' money.
John Paxson, head of the VA's fiduciary unit in 1990, said a
subordinate recommended Chavis as someone who could be trusted.
"She was presented as a very religious person and a retired
nurse who really, really cared for veterans," he recalled.
Had VA officials conducted a background investigation, they might
have learned about Chavis' bankruptcy and the disciplinary action
by the nursing board. They did not.
Instead, with Paxson's approval, they made her fiduciary for three
veterans during a trial period, then sent her more cases. Paxson
soon left the fiduciary unit for other assignments and did not
encounter Chavis again for years.
Chavis, meanwhile, got additional referrals from outside the VA
and began securing court appointments as a conservator.
One of her first clients was an 89-year-old woman living in a
nursing home. Her most valuable asset was her house. It was vacant
when Chavis took charge of her affairs. It did not stay that way
for long.
An Untruthful 'No'
Helen Smith moved to Los Angeles from Kentucky as a young
woman. She and her late husband, Luddie, worked laundry and
construction jobs to buy a modest white bungalow on Denver Avenue
in South Los Angeles.
By 1993, Smith was in the Marlinda nursing home in Lynwood,
suffering from dementia, with no one to manage her affairs.
Chavis said she learned about Smith while chatting with an
elder-care investigator in a supermarket checkout line. In August
1993, she filed a petition with Los Angeles Probate Court to
become Smith's conservator.
She was required to obtain a surety bond. The application asked
whether she had ever filed for bankruptcy.
Had Chavis answered truthfully, her career might have ended right
there. Instead, she marked "no."
Chavis allowed her son, Orlando Johnson, then 29, to live in
Smith's house rent-free. She paid the utility bills from Smith's
bank account.
In the summer of 1994, Chavis sought a restraining order against
her son, whom she described as a paroled murderer and drug user.
In court papers, she said he had threatened her.
She also said he was stealing Smith's belongings.
That fall, Chavis asked the Probate Court for permission to sell
the house to pay Smith's nursing home bills.
She said she had found a buyer willing to pay $85,500. That was
$9,500 less than a court-appointed appraiser had said the house
was worth.
Another unusual feature of the sale was that Smith was lending the
buyer 20% of the purchase price.
Also surprising was the identity of the buyer. Chavis swore in
court papers that it was her lawyer, C. Brian Smith.
In fact, it was Chavis herself.
In an interview, she acknowledged that her lawyer agreed to serve
as a straw purchaser because she could not obtain a mortgage.
Chavis said that she, not Brian Smith, made the mortgage payments.
"I couldn't qualify for it," she said. "My debt
ratio was too high."
Brian Smith declined to comment.
In explaining the bargain price, Chavis said no buyers had come
forward, though the house had been listed for months.
Neighbors, however, said they saw no for-sale sign, no visits by
prospective buyers or any other evidence that the property had
been on the market.
Chavis gave the court a document consenting to the sale,
purportedly signed by Vatie L. Rogers, identified as Helen Smith's
cousin and heir. Chavis provided Rogers' address in South Los
Angeles.
Contacted by The Times, Rogers, 73, said she did not know Chavis
or Helen Smith and knew nothing about the Denver Avenue house.
Shown a copy of the consent form, she said: "That's not my
handwriting, and I never signed that paper."
Rogers, a retired nurse, was puzzled as to how her name had turned
up in connection with the sale. Then she remembered having signed
up for a Red Cross first-aid class at a Baptist church.
The instructor was Anne Chavis.
'It Was Miserable'
Gregory Maynus was a Marine at Camp Pendleton in the late
1970s when he began hearing voices.
Diagnosed with schizophrenia, he was living on a disability
pension in San Bernardino in 1996 when Chavis knocked on his door
and said the VA wanted her to become his conservator.
"We talked about Jesus Christ," he recalled. "We
did pray together."
Chavis moved Maynus from his apartment to a run-down two-story
boarding house on West 37th Street in South Los Angeles. It was
called At My Home.
Verlene Cameron, who runs the facility with her mother, said in an
interview that Chavis helped her set it up and taught her to
recruit disabled veterans.
Chavis also served as administrator of the home during a period
when Cameron lacked the necessary credentials.
Maynus' room cost him $1,300 a month, three times what he had been
paying in San Bernardino.
He complained that Chavis neglected his needs and begrudged him
his own money, providing a living allowance of just $10 a day.
Having lost his spleen to cancer, he needed regular checkups at
the VA hospital in Loma Linda. In a sworn court declaration, he
said he missed several appointments with his oncologist because
Chavis wouldn't give him bus fare.
Maynus also wanted to see his seven children, who were in San
Bernardino, 60 miles away. Chavis refused to let him move back or
buy a car so he could visit them, he said.
"It was miserable," said Maynus, 46. "I felt
ashamed. I felt like I wasn't a parent, like I wasn't a dad."
In January 1997, he found an apartment in Loma Linda with help
from his mother and daughter. Maynus said Chavis would not give
him $20 to pay for a credit check, and he lost the apartment.
Two months later, he arranged to move into the home of a Rialto
minister, a man he described as "my second father."
Chavis thwarted him again, Maynus said, refusing to provide $150
to move his belongings.
In August 1997, Maynus' mother died. He went to Loma Linda for the
funeral and told Chavis he was not going back to At My Home. She
finally relented and allowed him to rent an apartment, he said.
Maynus hired a lawyer and asked the Probate Court to remove Chavis
as his conservator. In early 1998, she agreed to step aside, and
in return Maynus dropped his demand for an accounting of his
money.
Chavis denied mistreating Maynus and said many of his complaints
stemmed from drug use. She said he had been evicted from his San
Bernardino apartment and that At My Home was the only place that
would take him.
"I didn't bring him to Los Angeles because I wanted to,"
Chavis said. "I had nowhere else to put him."
Maynus said he has used drugs but not while he was at the boarding
house.
Around the time Maynus left, other Chavis clients sought to break
free of her control, complaining that she ignored their calls and
was mishandling their money. In many of her cases, she failed to
file required financial reports with the VA or the court. Of those
she did file, most did not account for all the money she had
received.
But the VA continued to send her clients, and the courts kept
approving new conservatorships.
By 2001, she was conservator for 27 people, nearly all of them
veterans. She was overseeing the government benefits of two dozen
other veterans as a fiduciary. In all, she was managing at least
$1.4 million in assets and $800,000 a year in benefits.
Dubious Inheritance
Louis P. Williams, a Navy veteran and former longshoreman, was
79 and nearly blind. His dementia was so advanced that a judge had
stripped him of the right to vote. His kidneys were failing.
He was living at the Hayworth Terrace boarding home for the
elderly in the Fairfax district when Chavis became his conservator
in 1999.
She placed him in the care of Verlene Cameron, the operator of At
My Home. Court records show that Chavis paid the boarding house as
much as $2,600 a month in rent from Williams' bank account.
Cameron said Williams was actually living in her private home on
Mullen Avenue in Mid-City.
Williams liked to go on drives to the beach and watch the Rams on
television, she said. He went to a clinic several times a week for
kidney dialysis.
In September 2000, Cameron composed a will for Williams on her
computer.
"I MR. WILLIAM WOULD LIKE TO MAKE VERLENE CAMERON MY
BENIFACARY OF MY MONEY; SHE IS TO MAKE ALL DECISION PLANNING MY
BURIAL, THANK YOU," it said.
Cameron said that Williams told her he wanted to leave his estate
to her and that Chavis suggested she draft a will and have him
sign it.
"I asked him, 'Are you sure you don't want anything else to
be done with this money? Are you sure you don't have kids out
there?' " said Cameron, 40. She
said
she "kind of felt uncomfortable" until she
learned that Williams had no surviving children.
"I know that he loved me like a daughter," Cameron said.
"This is a man who for five years I got him up, dressed him,
laughed with him, watched football with him."
Chavis sent her bookkeeper to notarize the one-page document,
according to both women.
The will bears two scrawled signatures. One appears to be
Williams' full name, the other his last name.
The document is dated Sept. 21, 2000, but was notarized on Sept.
20, 2000.
Chavis said she spoke to Williams before he signed the will and
was satisfied that it reflected his wishes. "He said, 'She
takes good care of me,' " Chavis recalled.
Chavis did not consult Williams' relatives about the will. They
learned about it when a Times reporter called, seeking comment.
"That's some fraud," said Idell Alexander of South Los
Angeles, Williams' cousin. "Louis was very sick. There's no
telling what they had him sign."
After Williams died in January 2002, Cameron filed the will in
Probate Court, represented by Chavis' lawyer, C. Brian Smith.
Cameron was appointed administrator of Williams' estate.
Chavis submitted a final accounting of Williams' assets and, with
court approval, paid herself and her lawyer, Smith, $12,500 in
fees.
Chavis was required to turn over the rest of Williams' estate to
Cameron. After nearly two years, Chavis still had not made full
payment.
In the end, she kept more than $15,000, a court-appointed lawyer
found.
Cameron decided not to pursue that money and asked the court to
award her what was left of the estate: $61,593.
Superior Court Judge Aviva Bobb, newly arrived in Probate Court,
approved the distribution in February, rejecting complaints from
Alexander and the VA that the will looked phony.
Last month, after The Times submitted questions to her about the
case, Bobb stayed her ruling and said she would hold a hearing to
determine whether Cameron should be allowed to inherit the money.
'A Real Good Front'
Chavis might still be accepting new clients if not for a burly
Vietnam veteran and his well-connected lawyer.
Patrick Murphy was 18 when his Marine unit came under fire in
Quang Nam province in 1968. A grenade explosion shredded his legs.
Today, he gets around on crutches and a motorized scooter. The
shrapnel in his body sets off airport metal detectors.
Murphy was at the VA hospital in Loma Linda, suffering from
post-traumatic stress disorder, when Chavis became his conservator
in July 1999.
"She put on a real good front," Murphy, now 55, said in
an interview. "She can look you in the face and you can think
this woman is really out to do the best for you."
Murphy said Chavis was late paying his bills and rarely came to
see him. When he asked her to account for his money, she stopped
returning his calls, he said.
"I'd be in turmoil," Murphy said. "You feel like
this piece of garbage and anyone can walk all over you."
He vented his frustration during group therapy at the VA hospital,
complaining about "his conservator ignoring his needs, that
she never responds to his call," according to a therapist's
summary.
In 2000, he got married and asked the VA and the Social Security
Administration to stop sending his monthly checks to Chavis. He
wanted his wife, Guadalupe, to collect the money.
In response, Chavis wrote federal officials that Guadalupe was
unfit to manage Murphy's finances and had bounced a $6,017 check
at a car dealership where the couple bought a used minivan.
The VA took Chavis at her word and refused to send Murphy's checks
to his wife.
In June 2001, Murphy's court-appointed lawyer, E. Joan Nelms,
petitioned the court to end the conservatorship. She said Chavis'
story about the bounced check was a "blatant falsehood"
and produced a letter from the car dealership that said Murphy and
his wife had done nothing wrong.
The dealership did have complaints — about Chavis. She failed to
make installment payments on the minivan, as she had promised, the
dealer's finance director wrote.
Judge Michael A. Smith ended her conservatorship over Murphy,
calling her conduct "unwarranted and unprofessional."
Smith ordered Chavis to file a full accounting of Murphy's money.
Months passed and she failed to do so. Nelms had taken a new job,
so the judge appointed another lawyer for Murphy.
Roy H. Nierman, a Navy veteran, was a member of the Republican
National Committee, and he had dealt with Chavis before. He
couldn't believe the VA and Southern California's probate courts
were still putting disabled veterans in her hands.
The Bureaucracy Stirs
Two years earlier, Nierman had been involved in a legal battle
with Chavis over who would serve as conservator for Michael Dolan,
a veteran suffering from schizophrenia. Dolan's mother wanted to
manage his affairs. So did Chavis, his VA-appointed fiduciary.
Nierman, representing the mother, discovered that Chavis had
collected $21,000 of Dolan's money but had not paid his bills. He
complained to U.S. Rep. Jerry Lewis (R-Redlands), a former
chairman of the House subcommittee overseeing the VA. The dispute
was resolved without Lewis' involvement: Dolan's mother became his
conservator, and Chavis returned his money.
In 2002, now representing Murphy, Nierman sent the congressman
another letter. "It appears the problem with Anne L. Chavis
has not disappeared," he wrote. "Anne Chavis is again
refusing to account for the funds she has expended on behalf of a
VA recipient."
Nierman expressed dismay that the VA "continues to appoint
her as [fiduciary] for veterans in the Inland Empire area."
A Lewis aide called the VA in Los Angeles, and at last the
bureaucracy began to stir. An investigation found that Chavis had
failed to submit accountings for many of her clients, and the L.A.
regional office had let her slide.
John Paxson was brought in to clean up the mess. He was the VA
official who, back in 1990, had approved Chavis' first cases. A
slim man with a mop of graying hair, Paxson, 57, had earned two
Purple Hearts and two Bronze Stars in Vietnam.
He called Chavis and demanded to know why accountings for more
than 50 of her VA clients had not been filed. Chavis said her
bookkeeper had died recently, but she would quickly pull the
paperwork together, Paxson recalled.
He gave her a deadline, then extended it twice when she pleaded
for leniency, citing health problems.
"I even let her stall me," Paxson said in an interview.
"It was misplaced compassion."
The promised reports never materialized. Fed up, he barred Chavis
from receiving VA benefits on behalf of any veterans beginning in
October 2002.
Chavis was also behind in filing financial reports with the
probate courts in her conservatorship cases. VA officials reasoned
that judges might succeed where they had failed. They asked the
Los Angeles court to order her to produce reports in eight cases.
A hearing was set for Jan. 24, 2003.
Chavis did not show up. Alan Achen, a VA lawyer, accused her of
dodging the agency's process servers.
A judge postponed the hearing until March. By then, the VA had
decided to give Chavis yet another chance. Chavis' lawyer, C.
Brian Smith, told the court that she would file all the overdue
accountings in 45 days.
"Is there a point to ordering Ms. Chavis back?" the
judge asked.
"I don't think so, your honor," Achen replied. "I
think she's got the message."
The next day, Smith's license was suspended. The state bar said he
had stolen $274,000 from clients in cases unrelated to Chavis. He
was later charged with grand theft, forgery and perjury and has
pleaded not guilty.
The 45-day deadline came and went with no reports from Chavis.
She hired a new attorney, Billy Hall Hairston, and wrote him a
$1,750 check. It was drawn on the bank account of one of Chavis'
wards, 80-year-old Rheajean Redmon.
Redmon, widow of a soldier killed in the Korean War, suffered from
dementia and lived in a nursing home in Joshua Tree.
"I'm just flabbergasted," said her daughter, Penny
Waite. "I'm astounded that she has the audacity to use my
mother's funds to pay her bills."
Pulling the Files
By February 2004, the VA had finally had enough. Three agency
officials appeared at the Hill Street civil courthouse in downtown
Los Angeles and asked to speak privately with Thomas W. Stoever,
then the supervising probate judge.
The three were ushered into the judge's second-floor chambers.
They said they had grave concerns about Chavis' cases and what was
happening to her clients' money.
"After they left," said Sandra Riley, the court's
supervising
probate attorney, "we started
pulling the files."
Court officials discovered that Chavis had not filed financial
accountings, inventories of clients' assets or other records in 27
cases. This was a serious breach. Conservators are required by law
to keep the courts informed of their activities; the courts are
supposed to make sure they do.
"I honestly can't tell you why this happened," Riley
said. "I wish I [could] because we would do something about
it."
In March 2004, Stoever summoned Chavis to a hearing. Her case
files were piled on a metal cart and wheeled into Department 11,
his wood-paneled courtroom.
Scanning the room, Stoever saw several of his staff members and
representatives of the VA. He did not see Chavis.
"Alrighty, bench warrant issued for Anne Chavis,"
Stoever said.
Chavis appeared two days later. Stoever ordered her to file the
accountings by May and attend another hearing in June.
"We're going to do what we can to put a full rein on the
conservator's actions in this and other cases," Stoever said.
Chavis missed the May deadline.
She was busy, but not with her clients' finances. She transferred
to her daughter, DeLisa Easter, the Denver Avenue home she had
secretly bought from Helen Smith back in 1994. A month later,
Easter sold the house for $260,000, three times what Chavis had
paid.
Chavis did not show up for the June hearing. Again, Stoever issued
a warrant for her arrest.
Five weeks later, she appeared unexpectedly in Department 11 with
a letter for the judge. He refused to accept it and ordered his
bailiff to arrest her.
She spent the day in a cell at the sheriff's Inmate Reception
Center before posting $10,000 bail.
At a hearing on Sept. 28, 2004,
Stoever asked her
to explain her behavior.
"I had a stroke and another stroke. A lot of stuff was going
on with me as far as my diabetes," Chavis said in a barely
audible voice.
"I just got overwhelmed."
Stoever ended her career as a conservator that day. He called case
after case and ordered her removed in each one. It took more than
an hour.
Under order to repay more than $1 million, Chavis has filed
reports accounting for some of the VA benefits and other income
she collected on her clients' behalf. But nearly $750,000 remains
unaccounted for.
Bonding companies that insured her clients' money have paid less
than $90,000, settling cases for a fraction of the missing money.
To recover some of their losses, the companies are searching for
Chavis' bank accounts and other assets. Gary Wayne Burger, a
lawyer for two of the firms, said the insurers had determined that
they could not lay claim to the real estate she transferred out of
her name.
Carolyn Osterhout is among the former wards still scarred by their
experience with Chavis.
With help from a friend, she managed to get free of Chavis'
control after seven years under conservatorship. But her lawyer's
review of financial records found that $31,706 of Osterhout's
money was missing.
In 2003, a judge ruled that Chavis had "misappropriated"
the money and ordered her to repay it. She has yet to pay a penny.
*
Times researcher Maloy Moore contributed to this report.
*
Planning ahead
To avoid a conservatorship, or to ensure that someone you trust is
put in charge of your affairs, attorneys recommend one or more of
the following steps.
A durable power of
attorney designates someone to manage your finances.
It does not have to be drafted by an attorney, but must be
notarized if real estate is involved. If you don't plan on using
an attorney, ask for a "statutory" form at stationery
stores or look for it on the Internet.
An
advance healthcare directive
authorizes a friend or loved one to make medical decisions for
you.
An advance nomination designates
someone to serve as your conservator if a court deems one
necessary.
A revocable
trust, also known as a living
trust, designates an individual to manage your assets
outside court jurisdiction while you are alive and after you die,
thereby avoiding the cost of probate. Trust documents must be
filed with your bank and other financial institutions.
Be sure to inform the people whom you have designated to make
decisions for you. Give them copies of the appropriate documents
and tell them where the originals have been filed.
Sources: California Medical Assn.; Irell & Manella; Mitchell
A. Karasov; American Bar Assn.
About this series
Caring for the aged and
infirm was once a family affair. Now, it is a business. In
documenting this change, reporters Robin Fields, Evelyn Larrubia
and Jack Leonard and researcher Maloy Moore examined records of
more than 2,400 cases handled by California's professional
conservators since 1997. They also conducted hundreds of
interviews — with probate lawyers, judges and independent
experts as well as people under conservatorship and their loved
ones.
Monday: How probate courts have failed the
elderly.
Tuesday: One conservator's troubled career.
Wednesday: L.A.'s public guardian — a canceled
promise.
On the Web
To see a photo gallery, share your experience and ask the
reporters a question, visit www.latimes.com/conservators
ESTATE PLANNING
