Failure to Prevent Financial Exploitation and Misappropriation of Resident Funds
Penalty
Summary
The facility failed to prevent financial exploitation and misappropriation of funds for a resident under full guardianship and legal incapacity. The Business Office Manager (BOM) facilitated unauthorized transfers of the resident's trust funds to a debit card without the required approval from the legal guardian. The guardian was not informed about the absence of a patient pay amount and continued to send substantial monthly funds, which were managed by the BOM. The guardian later discovered that approximately $10,000 was unaccounted for, and that funds intended for specific resident needs, such as dentures, were not used as agreed. The resident involved had a history of anxiety disorder, bipolar disorder, narcissistic personality disorder, and adjustment disorder, and required staff assistance with mobility and transfers. Despite an intact cognitive score, the resident was legally incapacitated and unable to consent to financial transactions. The resident reported increased anxiety, paranoia, lack of sleep, and suicidal ideation following the incident, and was observed with self-inflicted injuries requiring psychiatric assessment and 1:1 monitoring. The resident expressed emotional distress related to the removal of the BOM and maintained that the BOM was supportive, while expressing distrust toward facility administration. Interviews and documentation revealed that the BOM engaged in unprofessional conduct, including maintaining an inappropriate relationship with the resident and facilitating financial transactions without guardian oversight. The BOM admitted to assisting the resident with financial matters and obtaining a lawyer for the resident without involving social work or the guardian. Facility staff and the legal guardian confirmed that the BOM's actions violated professional boundaries and facility policy, resulting in substantiated findings of misappropriation of funds and psychological abuse.