Posted in Blog
People With Disabilities are Vulnerable to Fraud Committed By Their Business Partners. America’s population is aging, and the number of people with dementia is expected to reach 14 million by 2060. The fact some of us are successful business owners and investors won’t protect us from this and other debilitating diseases. Someone needs to be vigilant when overseeing our hard-earned wealth to ensure no one, including our business partners, takes advantage of us.
World War II Internee Becomes Successful Doctor and Business Owner
According to a successful lawsuit decided at a recent arbitration hearing, that was the situation facing Etsuko Toguri and her estate after she passed away. She was a young girl when she, and about 22,000 other Japanese-Canadians, spent World War II in military internment camps.
After the war, she became a physician based in Toronto, started a business, and invested in real estate. Dr. Toguri began partnering with Osvaldo Pierotti’s family in real estate investments in the 1960s. In 1977, they bought 32 vacant acres in Rancho Cucamonga for $166,000. It’s now the mixed-use community Day Creek Square.
Business Partner Takes Advantage of Her Failing Health
Dr. Toguri started developing Alzheimer’s disease in the mid-2000s and died in 2019 at the age of 93. Osvaldo and his wife, Anna Pierotti, held legal title to the land and had Dr. Toguri’s share in trust. Attorneys representing Dr. Toguri’s estate claim that:
- In 2017, the Pierotti family sold the property to a developer for $45 million, earning about a 27,000% ROI, without Dr. Toguri’s consent or informing her family. They didn’t pay her or her estate any of the proceeds
- The Pierotti family gave 80% of the money to their son, Peter Pierotti, through a shell company and kept the rest
- They took extreme steps to hide the sales price, structuring the transaction so it appeared the property sold for $8 million. Osvaldo later decided to prevent Dr. Toguri from getting a share of that bogus amount.
Dr. Toguri’s sister Miki hired attorneys to get an accounting of what happened with the property. After a year-and-a-half of litigation, the dispute was decided in Dr. Toguri’s estate’s favor earlier this month. An arbitrator ordered the Pierotti family to pay $30.1 million in compensatory and punitive damages, plus interest, to Dr. Toguri’s estate. All the defenses in the case were rejected.
Financial Exploitation of Those With Disabilities Can Be More Than Stealing Checks
The exploitation of the elderly, frail, and disabled is common. Abusers leverage their position of trust to gain access to cash, credit cards, and information that may be used for financial gain. They could have documents signed without a person understanding what they’re doing, unlocking banking and investment accounts. Others extort gains through the use of threats and intimidation. But this is only part of the problem.
As Dr. Toguri’s case shows, financial exploitation can reach a different level the wealthier the victim is. If you own a business:
- You should have a succession plan in place if you no longer can keep up with your responsibilities.
- To avoid having a guardian named for you to manage your affairs, you can sign a power of attorney over to someone trustworthy and competent to be in charge of your finances and business interests.
- You could also put your wealth in a trust and name a trustee to manage it and fund your lifestyle from the proceeds.
- If you have business partners, an ownership agreement can include language spelling out what happens to a partner’s interest in the company and how the business will be run, if one becomes incapacitated.
Mostly, you need someone to look out for your interests and take action to protect you when necessary. Most business partners won’t kick you when you’re down, but if yours does, you’ll need someone to consult with an attorney and start taking action, just as Miki did in her sister’s case.
Get the Help You Need From a Lawyer You Can Trust
If you believe business partners are cheating you or a loved one, call Focus Law at 714-415-2007 or click here to schedule a consultation. We can talk about your situation, how the law may apply, and what you should do next.
