LOS ANGELES (CN) - Hundreds of seniors who say they were duped by the promise of state health care benefits claim in court that California has refused to reimburse them from a fund for victims of corporate fraud.
Senior Care Advocates tricked more than 500 elderly Californians into paying more than $20,000 for a service that would supposedly "qualify" them for the California Medical Assistance Program (Medi-Cal).
In reality, there is "no such thing as 'qualifying' for Medi-Cal," and a person is "either eligible or not eligible" depending on his individual finances, the complaint states.
The now defunct company, run by Roseville-based attorney James Walker, allegedly sold various scams for many years to thousands of victims.
"Senior Care Advocates was able to prey on the fear of elderly individuals who were told that they would lose everything, be kicked out of their house and would never be able to afford any kind of assisted living facility unless they 'qualified' for Medi-Cal through Senior Care Advocates," the complaint states.
Prosecutors investigated Senior Care Advocate and found they had engaged in unfair business practices, the lawsuit states, but no criminal charges were filed and Walker never admitted to any wrongdoing. After an injunction and civil penalties, the lawsuit says, the company filed for bankruptcy in late 2008.
A bankruptcy judge later found that the seniors were victims of fraud, but Walker and Senior Care Advocates allegedly had no assets to compensate those they had scammed.
In May 2010, the seniors submitted their claims to the Victims of Fraud Compensation Fund, according to the lawsuit. But in spite of the bankruptcy court's ruling, the seniors say, Secretary of State Debra Bowen threw out 282 claims based on lack of documentation.
Even those who won restitution have received only a portion of what they are owed, or nothing at all, according to the lawsuit.
Bowen "did not believe they had actually lost any of the money" they claimed, even though the state's attorney general had already prosecuted the offending company, and a federal court had found that they were scammed, the complaint states.
"After two years of bureaucratic delay, the secretary ultimately denied the claims of more than 280 of the 480 victims, while agreeing to compensate the other 203 seniors only a fraction of the value of their losses," the complaint states. "To make matters worse, even the 203 seniors the secretary has agreed to pay have not received the restitution promised. Meanwhile, the secretary is in charge of a fund designed to help victims of corporate fraud which has taken in almost $15 million from corporate registration fees and had paid out only a tiny fraction of that amount to victims."
The seniors also say they received a "ludicrous" request from the secretary "that all 480 plaintiffs, many of whom wrote checks more than 10 years ago, provide both the front and back of the checks they wrote to prove that they were negotiated or provide other proof of actual loss such as a credit card statement or a bank statement showing the payment."
"It also suggests that the plaintiffs' applications to the secretary, which were submitted under the penalty of perjury, were fraudulent," the complaint states.
The seniors are represented by Lawrence Salisbury with Majors & Fox in San Diego. They seek an order directing payment out of the fund, and damages for the alleged violation of the Welfare and Institutions Code.
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