Have California seniors been subject to financial abuse? A recent article in the San Francisco Chronicle reported that residents at an “exclusive continue-care community” for the elderly in Palo Alto might have been fraudulently cheated out of millions of dollars. In short, many of these older adults paid substantial fees—some as pricey as $2 million, according to the article—based on a promise from the company to repay the remainder if the resident moved or to repay the remainder to the resident’s next-of-kin in case of death. However, residents and their relatives are accusing the facility, the Vi at Palo Alto, of “reneging on a promise to return most of the money to them.”
Nursing home abuse can take many forms, and elder abuse is a term that refers to more than just physical abuse or elder neglect. As we’ve noted in recent news cases, the elderly can be particularly susceptible to financial abuse and instances of consumer fraud. Are you concerned that your older parent or relative has been the victim of a financial crime? The sooner you speak to an experienced elder law attorney, the quicker you’ll be able to take action for your elderly loved one. Contact the California nursing home abuse lawyers at the Walton Law Firm today to learn more about elder financial rights.
Financial Security and “High-End” Elder Living—Not What it Seems?
The Vi at Palo Alto houses about 500 elderly residents in apartments, and about another 100 seniors in its assisted-living facility. It’s one of several facilities that’s operated by CC-Chicago, which is a company created by Penny Pritzker. We know Pritzker as President Obama’s commerce secretary, according to the San Francisco Chronicle.
Living at the Vi doesn’t come cheaply. The retirement home sits on 22 acres of land that’s leased from Stanford University, and according to the report, it charges residents between $4,320 and $9,320 per month, depending on the type of apartment and level of care that each resident receives. The entrance fees for new residents are also shockingly steep—anywhere between $745,000 and $4.6 million. How does it convince seniors to shell out such a high entrance fee? According to current residents, the retirement homes has promised them that “75 to 90 percent of the money will be refunded when they leave, or turned over to their estates when they die.” The Vi also promises residents a “sense of security” with their money, since “they know their entrance fee refund will not fluctuate with changes in the market.”
However, the Vi at Palo Alto and its parent company may be guilty of financial crimes committed against these elderly residents. The company has “no remaining cash reserves and has transferred more than $190 million to CC-Chicago,” which insists that it has no financial duty to the residents at the Vi. In short, it looks like the Vi at Palo Alto won’t be able to keep its promise about refunding entrance fees.
Class Action Lawsuit Against Palo Alto Elder Community
The residents at the Vi at Palo Alto are doing their best to make sure that the continuing-care community will be held liable for financial crimes. According to those residents, the Vi and its parent company (out of Chicago) transferred their money to a corporate headquarters “with little prospect of repayment.” With high entrance fees for each of these residents, this amounts to a substantial amount of money—about $190 million when all is said and done.
What are the residents doing to go after the Vi at Palo Alto and its parent company? They’ve proposed a class-action lawsuit, which they filed last week in a federal court in San Francisco. The claim currently involves six of the Vi’s residents, and it’s headed up by Burton Richter, a resident who won the 1996 Nobel Prize in physics. The lawsuit asserts that “Vi at Palo Alto and the parent company have drained the retirement home of its reserves, run up a deficit of more than $300 million and illegally hidden their financial practices.”
For the past several years the company has insisted that the residents’ funds are perfectly safe. However, the class action alleges that the company owners “have taken hundreds of millions of dollars from a group of vulnerable senior citizens, deprived them of their security, and placed much of their lifetime savings at risk.”
A spokesperson for the company owners insisted that “the charges are completely unfounded.” However, the lawsuit alleges that the Vi at Palo Alto breached it contract and violated California law, which “requires continuing-care homes to disclose a lack of cash reserves to refund entrance fees.” We’ll be keeping an eye on the case as it moves forward.
In the meantime, don’t wait to speak to a California elder attorney if you suspect elder abuse. Contact us today to discuss your case.
See Related Blog Posts:
Insurance Agent Arrested for Financial Elder Abuse
Elderly Financial Abuse and Privacy Laws Revisited