recognizing and defeating va disability scams recognizing and defeating va disability scams the...

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Recognizing and Defeating VA Disability Scams

The Center for Elder Veterans Rights has produced a detailed White Paper entitledRecognizing and Defeating VA Disability Benefit Scams. As the scourge of disability benefitscams and fraud directed towards our vulnerable, elderly veterans continues to grow, CFEVR isbecoming the “thought leader” in making the long-term care industry aware of the detailedfederal laws regulating Veterans advocacy and helping it to develop ethical, non-deceptive andlegally compliant Veterans outreach programs throughout the nation.

However, today, this egregious scam is occurring every day, throughout the country athundreds, if not thousands of assisted living facilities. Thousands of Veterans and their familymembers are being put to risk and serious financial harm by using illegally operating financialplanners and may have to repay thousands or even tens of thousands of dollars in VA benefitsto the U.S. Treasury.

If you own or manage a long-term care facility, provide home health care to the aged, or are aVeteran or family member of a Veteran, you owe it to yourself and your loved ones to read thisWhite Paper. Don’t take on blind faith what you are told by your assisted living or care provider!Don’t believe a slick, patriotic brochure provided by a deceptive insurance marketing firm! Readthe law and draw your own conclusions. And always remember, CFEVR attorneys are alwaysstanding by to answer your questions with solid, black-letter federal law or policy. If you hear itfrom us, we can and will gladly provide you with a printed copy of the official course document.It’s not hearsay or opinion…it’s law.

To learn more, download our White Paper: Recognizing and Defeating VA Disability Scams Introduction and Intentp. 7 Chapter 1.AShort Overview of VA Disability BenefitsFueling the Flames, or What Financial Planners Don’t Want You to Knowp. 10 Chapter 2.Sour

ces of Relevant Federal LawWhat Exactly Are the Laws Regulating Assistance to Veterans?p. 12When Does Assistance to Veterans Require VA Accreditation?p. 14What is the Legal Concept of "Representation" for VA Purposes?p. 15

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Center for Elder Veterans Rights, PC Unauthorized reproduction or distribution of this copyrighted work is prohibited

“Recognizing and Defeating VA Disability Benefit Scams”

A White Paper from the Attorneys of the Center for Elder Veterans Rights, PC

August 30, 2010

(Revised January 10, 2011)


Abstract

A national tragedy is unfolding daily in the auditoriums, community rooms, and dining

rooms of assisted care communities across America. Elderly Veterans and their families are

exposed to often profoundly inaccurate, incomplete, fraudulent and deceptive information

regarding disability benefits administered by the Department of Veterans Affairs. The

information about these benefits is often presented at so-called “seminars.” These “seminars”

are sponsored by the assisted care facility and are often vigorously publicized throughout the

facility and surrounding community. Often hundreds of people attend these gatherings.

At the “seminar”, an individual representing a financial planning or services firm will

make a 45 minute presentation regarding a very small subset of VA Disability Benefits which is

often mistakenly termed the “Aid and Attendance Benefit.” The financial planner presents an

overview of the benefit (often filled with substantial error) and presents extremely simplified

eligibility requirements.

The actual objective of these “seminars” is not to assist Veterans per se. The objective of

the financial planner conducting the “seminar” is to identify those Veterans in the audience

whose total net estates are in excess of what federal regulations allow for entitlement to one

particular disability program, the Non-Service Connected Pension. Once identified, the financial

planner will proceed to set-up private meetings with the Veterans and their families to present

means by which portions of their liquid estate can be sequestered for VA eligibility purposes.

The financial products and services sold by the planner to facilitate this sequestration are

commission-based insurance products (such as annuities), up front “cash flow analysis” or

“estate planning” consultations often costing thousands of dollars, or legal advice to transfer

assets into a trust.

The subsequent commission for the sale of these products or services is the single

motivation for offering this assistance to Veterans. It is simply how the financial planner earns

his or her living.

Unfortunately, for Veterans, the services provided by these financial planners are illegal,

deceptive and entirely unethical.

Care providers sponsoring these activities in their communities or companies are

generally not aware that assistance to Veterans is highly regulated under federal law and have

not taken the time to understand how these laws are violated. Usually, what information is

“known” by assisted care providers is information which has been provided by the financial


planner rather than an objective understanding of the various applicable laws and regulations.

While it may be true that Veterans do receive some benefits through the efforts of these

individuals, the collusion of the long-term care industry in patently illegal and deceptive

practices certainly does not enhance the reputation of professionalism the industry fosters.

It is the opinion of the Center for Elder Veterans Rights that any long-term care provider

who has not done the due diligence necessary to substantiate objectively in law what can and

cannot be done to assist veterans and perhaps, most importantly insured that their current out-

reach program to Veterans is compliant with those laws and regulations, is guilty of gross

neglect. No care provider would knowingly provide sub-standard care in violation of state

licensing requirements that mandate fiduciary responsibility and standards of prophylactic care.

However, these same providers will allow individuals operating in a patently illegal manner and

providing deceptive and inaccurate information access to elderly residents under their care.

This paper is a call to the industry to take all necessary steps to immediately cease and

desist from this neglectful behavior and substitute in its place a program of education and

advocacy for Veterans that is legal, ethical and beneficial.


Intent

The intent of this White Paper is to acquaint the long-term care industry with the legal,

black-letter laws and facts facts surrounding Veterans assistance and to urge an end to these

deceptive, illegal, and unethical practices that place tens of thousands of vulnerable elderly at

risk every day.

This white paper is not about opinion. It is about legal fact. In all cases the actual law or

legal opinion is cited and quoted.

Long-term care providers – whether facility based or in-home based – must wake up to

the magnitude of the scam and fraud being perpetrated on their vulnerable clients and take

immediate steps to insure that those elderly clients under their care are protected from harm.

Note

Whenever the term “Veteran” is used in this document, it is a generic term inclusive of Veterans,

their surviving spouses and other dependents and used for ease of expression.


A Short Overview of VA Disability Benefits

The Department of Veterans Affairs (“VA”) administers two disability programs under

congressional authority:

Service-Connected Disability Compensation1

Non-Service Connected Disability Pension 2

Service Connected Disability (“Compensation” ) is a monthly monetary award made to Veterans

whose disability occurred as a direct result of their active duty federal service or had a pre-

existing condition exacerbated by active duty service. 3 Disabilities are rated by the degree to

which the disability prevents full and equitable employment (0-100% disability) which 100%

disability being reserved for a Veteran incapable of performing substantially gainful

employment. The term “Compensation” comes due to the nature of the monetary award. The

VA is “compensating” the Veteran for their loss of earnings (compared to a non-disabled person)

on a monthly basis. For example, a Veteran rated at 40% disability would theoretically only be

able to earn 60% (100-40=60) of what a non-disabled person could earn.

Non-Service Connected Disability Pension (“Pension”)4 is an award reserved for Veterans with

wartime duty and low net incomes. The nature of the Pension is that the VA guarantees an

eligible wartime Veteran a minimum monthly income based on their net income. Net income is

calculated as total gross income less all regularly occurring, on-going, out-of-pocket medical

expenses. If the resulting net income is above the guaranteed minimum, the Veteran is not

eligible for assistance. If the net income is less that the guaranteed minimum, the VA will award

the difference between the net income and the amount set by law as a minimum.

The un-remarried, surviving spouses of Veterans are also eligible for Compensation or

Pension assistance. For Compensation assistance, called Dependency Indemnity Compensation

of “DIC,” 5the surviving spouse must have been married to a 100% disabled Veteran for at least

ten years before his or her death. In Pension cases (termed “Death Pension” by the VA,)6 all of

the eligibility issues in law for Veterans also apply to the surviving spouse except the

requirement of military service which is satisfied by the acceptable service of the deceased

spouse.

In both Compensation and Pension cases, special monthly benefits may also apply if

additional eligibility requirements are met. In Compensation cases these special requirements

1

38 United States Code, Part II, Chapter 11 2 38 USC, Part II, Chapter 15 3 38 Code of Federal Regulations 3.4

4 38 CFR 3.3

5 38 CFR 3.5, 38 USC Part II, Chapter 13

6 38 CFR 3.3


are called Special Monthly Compensation or “SMC” 7and include additional grants of money for

especially grievous disabilities such as the loss of arms, legs, eyes, etc. as well as for

Housebound and Aid and Attendance assistance. In Pension cases, only Housebound and Aid

and Attendance special monthly benefits apply.

In both Housebound and Aid and Attendance situations, eligibility is governed by 38

Code of Federal Regulations 3.351 and 3.352. (See Appendix One and Two, respectfully).

These special benefits are not VA programs in and of themselves and cannot be applied

for individually. They are simply additional amounts of monthly grants that can be added to

100%-rated Compensation or Pension benefits if additional evidence is presented.

It is very important to realize that special benefits, especially for Aid and Attendance are

simply additional monetary grants that can be added to Compensation or Pension at the 100%

rate if additional health-related eligibility exist.

7 38 CFR 3.350


Fueling the Flames

The reason for the introduction to VA benefits is straightforward. The financial planners

who hold the previously discussed “seminars” are only interested in assisting Veterans who may

be Pension eligible. They are not interested in Compensated Veterans for one simple reason:

eligibility for Compensation benefits have nothing to do with the Veterans financial position.

Unfortunately, while there are only 350,000 Veterans receiving Pension there are over

3.5 million receiving Compensation. This means that the financial planners are intentionally

ignoring the needs of 90% of Veterans.

For example, a Veteran may be currently rated at 60% Compensation; however due to

increasing disability for the service –connected health issue, the Veteran is unable to work (age is

not a factor.) Instead of applying for Pension and, more than likely requiring the Veteran to

dispose of or purchase financial products or services, requesting the VA to establish Individual

Un-employability could raise the rating to 100% and open the door to additional special benefits

through Aid and Attendance. Rather than receiving $1644 in Pension, the Veteran could receive

over $3300, or twice as much!

Our point is that the VA requires complete and responsible representation for Veterans.

Simply offering the simplest and least valuable benefit because it is “easy” is disrespectful of the

Veteran and obviously a very poor decision. Yet, the seminars sponsored by the industry do just

that every day.


Sources of Relevant Federal Law

Also, we feel it is necessary to emphasize that assisting Veterans in matters of benefits is

directly regulated under federal law (which will be discussed in detail in a paragraph below.)

However, it is important to know that federal law regarding Veterans disability benefits is

complicated and often obtuse. For example, there are at least five sources for relevant legal

statutes, regulations and precedents governing VA disability benefits.

Title 38 United States Code (38 U.S.C.)

Title 38 Code of Federal Regulations (38 C.F.R.)

VA “M” Series internal policy manuals (which have force of law when they expand upon

the „terse‟ language of the regulation according to the Supreme Court.)

Appellate decisions handed down by the Court of Appeals for Veterans Claims

(“CAVA”)

Legal opinions from the VA Office of General Counsel

For example, nearly every eligibility requirement for Pension most people are familiar which

have their exceptions under federal law. In some cases,

it is not necessary that a Veteran have served at least 90 days of active duty,

a spouse may have remarried and still be eligible for her husband‟s benefits,

trusts are usually not compliant for VA financial purposes, etc.

We make this point simply to show that these statutes, regulations, opinions and decisions are

complicated. An individual not familiar with these laws in depth and in detail is inevitably going

to give a Veteran poor advice which could cost tens of thousands of dollars.

As a professional you and your company are ethically bound to provide the best and most

accurate assistance available for your clients. Just as you would not serve sub-standard food,

maintain untidy or dirty facilities, or employ sloppy, un-caring care givers, you should not

encourage incompetent, untrained, financial planners to do what federal law requires.


What Exactly Are the Laws Regulating Veterans Assistance?

The federal statutes and regulations concerning Veterans Relief and Benefits are found in

Title 38 United States Code and Title 38 Code of Federal Regulations. 38 U.S.C. is the

codification of the Public Laws regarding Veterans and 38 C.F.R is the body of regulations

implementing the statutes. Additionally, various internal VA policy manuals have the force of

law if their content “expands upon the terse language of the regulation” in question. Suffice it to

say the law is voluminous and complex.

We understand that there are many conflicting “opinions” as to how federal law applies

in cases of when and by whom a Veteran may be assisted. Rather than debate opinion, we will

simply rely on a straightforward recitation of law to make our point.

38 U.S.C., Section 5901-5905 deals specifically with the assisting of Veterans. It states

that “…no individual may act as an agent or attorney in the preparation, presentation, or

prosecution of any claim under laws administered by the Secretary [of Veterans Affairs] unless

such individual has been recognized for such purposes by the Secretary.” 8 The Secretary has

delegated the task of recognizing agents and attorneys to the General Counsel of the VA, a senior

staff position.

Further, 38 C.F.R.14. 626 provides the reason for this required recognition: “The

purpose of the regulation of representatives is to ensure that claimants for Department of

Veterans Affairs benefits have responsible, qualified representation in the preparation,

presentation, and prosecution of claims for veterans' benefits. The VA specifically states that

representation must be responsible and qualified. Taken together one may intuit that since

federal law is complex, representatives must be fully knowledgeable about the law and its

various permutations and must be responsible for providing “complete claims service” as

required in 38 C.F.R. 14.629. Complete representation is more than just preparing a claim. It

also means fully prosecuting the claim not only until the initial award is made but for the rest of

the Veteran‟s life unless otherwise specified.9 The representative may not just prepare a claim.

He or she has to represent the claimant‟s interest before the VA for an indefinite period. One

reason for this regulation is the annual Eligibility Verification Report required of Pensioned

Veterans. Mistakes on this form can result in the VA demanding repayment of tens of thousands

of dollars.

Other regulations and legal opinions clarify even more of the federal intent. 38 C.F.R.

14.629 states that there are only three types of individuals that can be recognized to assist

Veterans:

attorneys,

agents and

representatives of VA recognized service organizations

8 38 USC §5901

9 38 CFR 14.627(i)


While Veteran Service Officers are employees of local and state governments or

volunteers from one of thirty-seven recognized veteran service organizations, attorneys and

agents have far more latitude. Agents are somewhat limited in that they are not allowed to

specialize in their representation or practice law but like Veteran Service Officers must assist in

all areas of benefits including education, medical, and mortgages.

However, attorneys are in a special category because of their legal standing. This is

because attorneys are licensed by the Supreme Court of the states in which they practice and

have a legal right enshrined in civil law to represent clients in matters of law. Of all categories

of possible representatives that can be recognized by the General Counsel, only attorneys are not

subject to extensive testing and certification due to their expertise and education.

In short, attorneys practice law civilly, not only before the VA. This means that attorneys

are not only required to meet VA standards for responsibility and quality of representation but

they are also liable for civil malpractice at the risk of losing their license to practice law.

Attorneys must be more professionally capable than any other category of VA representative.

Also, only attorneys can be legally assisted while helping Veterans. 38 C.F.R. 14.

629(c)(3)(a) states that attorneys may be assisted by “a legal intern, law student, or certified

paralegal [who] may assist in the preparation, presentation, or prosecution of a claim, under the

direct supervision of an attorney of record.” Note that the law only allows three types of

individuals to assist an attorney: legal interns, law students or certified paralegals. Financial

Planners and estate planners do not meet the regulatory definitions stated above to assist in claim

preparation.

Further, the legal interns, law students and certified paralegals must work under the direct

supervision of the attorney. The VA intent is that direct supervision entails close physical

supervision. It is not possible for an attorney to “directly supervise” a financial planner in

another city or state and to take legal responsibility for the actions of those individuals. The VA

has held that “direct supervision” means close physical proximity, i.e. in the same office as have

the various state bars.

Therefore the reasonable conclusion must be made that a financial planner offering

assistance to anyone outside the “direct supervision” or close physical proximity of the

accredited attorney are themselves in violation of federal law but also the attorney allowing the

practice to occur!

Simply stating that “all of our (my) claims are filed with the VA by a VA-accredited

attorney does not meet the intent of the statute or regulation.


When Does Assistance to a Veteran Require Accreditation?

Title 38 CFR is very specific in this regard and this is a fundamental point in fully

understanding VA scams. Federal law regarding assistance to Veterans begins to apply when an

individual seeking benefits becomes a claimant. “Claimant” is officially defined as follows:

“Claimant means a person who has filed or has expressed to a representative, agent, or

attorney an intention to file a written application for determination of entitlement to benefits

provided under title 38, United States Code, and implementing directives.10

”

Before a person actually starts the process for a claim or formally expresses intent to file

a claim, federal law does not apply. However, after simple intent is expressed, federal law

begins to take effect. Of course, you have already learned that one must be accredited to render

assistance to a claimant.

From a practical standpoint, the definition of “claimant” also has implications for

financial planners. Typically, financial planners begin working with a client‟s financial assets

after an individual has expressed an interest in pursuing VA disability benefits. Otherwise why

make drastic changes to your estate? If this is the case (and it always is), the financial planning

is taking place after a person has become a “claimant” under the law. While financial planning is

not regulated by the VA, if the financial planner is giving advice on a claim (including financial

advice) and then helps with a claim after the financial planning has been done, the financial

planner is again in violation of the law.

10

38 CFR 14.627(h)


What is the Legal Concept of “Representation” for VA Purposes?

38 C.F.R. 14. 627(h) defines “complete claims service” as “representation of each

claimant requesting assistance, from the initiation of a claim until the completion of any potential

administrative appeal.” As we have discussed above, 38 C.F.R. 14.626 indicated that

“representation” is composed of three components that cannot be separated: claim preparation,

claim presentation and claim prosecution.

Claim Preparation is the sum total of all of the advice, research, acquisition of

documents and information necessary to make “application under title 38 U.S.C., and

implementing directives, for entitlement to Department of Veterans Affairs benefits,

reinstatement, continuation, or increase of benefits, or the defense of a proposed agency adverse

action concerning benefits.11

Application implies the actions associated with the forms used by

the VA; wither electronically or in paper format. When a financial planner assists someone with

filling out a VA form or assists in gathering the information that is used on the form, regardless

if the form is presented to the VA by the Veteran or an attorney, it is clear that this consists of

claim preparation, an activity for which one must be accredited as a representative by the

General Counsel. Obviously, this opinion would also extend to any individuals assisting the

attorney and we have already shown, these assistants are limited to legal interns, law students

and certified paralegals. This opinion clearly disallows financial planners from offering advice

to clients who have expressed an interest or intent to pursue VA disability benefits.

Claim Presentation involves insuring that all of the evidence needed to prove a claim for

benefits is properly prepared and presented to the VA office of original jurisdiction in the format

required and expected by the VA. It is not enough to present basic claim forms, all of the facts

asserted on the claim must be proved. Most of the requirements for proof are found in VA

policy manuals (the M21 series). When the VA looks at evidence, the evidence has to be in a

format accepted by the VA and must contain the proof in language acceptable to the VA as a

standard of evidence. Failure to present evidence in the proper format and language is one of the

chief causes in VA claims delay.

Claim Prosecution is another key concept that affects the assistance of Veterans. Claim

Prosecution is all of the acts necessary to obtain the desired entitlement after the claim has been

presented to the appropriate VA office of original jurisdiction. In our experience, after over 11,

500 successful claims, approximately 25-30% of all claims require additional representation

before the VA after the claim is filed. This is not necessarily because the claim was incomplete

or erroneous, but can simply be a question that someone at the VA feels a need to ask! If these

questions (called DTAs or Duty to Assist letters) are not replied to in a timely and accurate

manner, the claim will be summarily denied. Many Veterans receive denials simply because

their case was not proven, not necessarily because they were not eligible! The Veterans Claim

Assistance Act of 2000 requires that the legal representative of a Veteran be copied on all

correspondence from the VA. This often fails to occur and the Veteran or his or her family is

then left to answer the inquiry on their own. While we will not say these inquiries contain “trick

questions,” it is fair to say that an incomplete or honestly erroneous answer will result in a denial

11

38 C.F.R. 14.627(f)


or less of an entitlement than expected. A very common error is providing the VA with too

much evidence which then becomes confusing. Evidence submitted to the VA needs to be

succinct in proving the assertion and no more.

Also, please note that an attorney, even one accredited by the VA, cannot charge any fees

whatsoever for claim prosecution.12

Therefore a lot of free legal work by the attorney can and is

avoided by assuming the position that the family is responsible for this correspondence and that

if help was needed, the Veteran would ask! Since the families do not fully understand their

rights, many avoidable problems occur that could be easily avoided with proper representation.

In short, attorneys generally have no motivation whatsoever to assist in the required claim

prosecution required by the term “complete claims service” discussed above. Attorneys are paid

by the hour. Free legal work is avoided at all costs and it is the Veteran who is harmed by this

avoidance.

In summary, we feel these points must be clearly understood by any long-term care

provider offering assistance to Veterans:

An individual must be accredited by the VA General Counsel to represent Veterans.

Attorneys may be assisted only by legal interns, law students or certified paralegals

working under their direct, physical supervision.

Financial planners do not meet these criteria of law.

Advice on claims cannot be given by anyone who is not accredited unless they are legal

interns, law students or certified paralegals working under the direct, physical supervision

of an attorney.

Claim prosecution is vital to the short and long term success of a claim and the retention

of benefits.

Attorneys have no financial motivation to aggressively assist in claim prosecution over

the long-term.

12

Letter of May 24, 2004, Tim McLain, General Counsel, to Rep. Evans (cited as Appendix Four)


Giving Advice on Veterans Claims and Eligibility.

According to law and the opinions of the VA General Counsel, the real issue is

“representing” a Veteran before the VA. Under Title 38 CFR, the term “Representation”

consists of at least three distinct acts: preparing a claim, presenting the completed claim to the

VA, and prosecuting the claim before the VA.

The VA considers the giving of advice to be an integral part of claim preparation.13

Question: If [I] work with pension benefit clients and advise clients as to eligibility requirements, but does

not file the application for them, do they need to be accredited?

Response: Yes. In answering this question, we assume that (1) a “pension benefit client” means a veteran

not currently receiving VA pension but one who has expressed intent to file for such benefit, and (2) that

the advice provided includes those acts in making the claim ready for filing, but not the actual filing of the

claim. Here, the advice constitutes preparation of a claim and therefore requires accreditation. This is

because the advice is given in regards to a specific application for benefits rather than general advice not

related to a specific claim. The difference is significant in that the purpose of VA’s accreditation program

is to ensure that claimants for VA benefits receive qualified assistance in preparing and presenting their

claims.

The VA wants anyone assisting a Veteran to perform all three actions required to

represent of Veteran. The VA calls this “complete claims service.”14

You cannot just prepare a

claim and disregard necessary legal support. You have to provide full service to the client under

both state and federal law.

The financial planner only lives in the world of Preparation, the first of the “P”s.

The VA General Counsel has clearly stated in their instructions to accredited attorneys,

agents and VSOs exactly what constitutes claim Preparation.

The General Counsel holds that claim Preparation consists of any act (advice, direction,

helping with paperwork) that leads to physically completing an Informal or Formal claim for

benefits. If I show up at a “seminar” and help someone with a particular question and give

advice on asset issues, or any other topic associated with getting a claim together, I am preparing

a claim! Even if I give advice during a lecture when I answer a question, I could be guilty of

illegally helping prepare a claim. 15

13

VA General Counsel website, “Accreditation FAQS” 14

38 CFR 14.627(i) 15 Question: If an attorney works with pension benefit clients and advises clients as to eligibility requirements, but does not file the application

for them, do they need to be accredited?

Response: Yes. In answering this question, we assume that (1) a “pension benefit client” means a veteran not currently receiving VA pension but one who has expressed intent to file for such benefit, and (2) that the advice provided includes those acts in making the claim ready for filing, but not the actual filing of the claim. Here, the advice constitutes preparation of a claim and therefore requires accreditation. This is


So who can represent a Veteran (the three “P”s?) Only an accredited attorney, agent or

VSO. And since agents and VSOs are not attorneys, they can‟t have interns, law students, or

paralegals work for them (and certainly not financial planners!) And then there is that pesky

“direct supervision” issue!

Another important concept in this discussion is the giving of advice to a claimant

regarding a specific claim for benefits. In many situations, financial planners or even good-

hearted staff at assisted living communities offers their advice on a claim or even at the financial

planner‟s “seminars.” The giving of such advice is illegal based on the VA General Counsel‟s

legal opinion. Regarding legal opinions as being binding , the relevant concept in law is found in

Title 5 U.S.C. §500. Title 5 allows federal agencies to develop the policies, regulations and

procedures required to implement statutes for which their agency or department is responsible.

Therefore, legal opinions that define or offer substantive commentary on 38 C.F.R. made by the

VA through the General Counsel has the force of law. It is a binding legal opinion. The General

Counsel maintains a Frequently Asked Question area on its departmental website. The question

has been asked if an individual who is not accredited by the General Counsel can even offer

advice on a specific claim.

because the advice is given in regards to a specific application for benefits rather than general advice not related to a specific claim. The difference is significant in that the purpose of VA’s accreditation program is to ensure that claimants for VA benefits receive qualified assistance in preparing and presenting their claims. (http://www4.va.gov/ogc/accred_faqs.asp)


Providing Financial Advice on a Claim.

As you can see from the discussion above, giving advice on a VA disability claim is not

permitted unless one is accredited by the General Counsel. If the financial advice is being given

to sequester assets so that they are supposedly not countable for VA purposes, obviously intent to

pursue VA benefits has been expressed. The individual is therefore a “claimant” and the

financial planner cannot provide any advice on the claim (including what will or will not work

under the applicable law) or assist in the preparation of the claim.

Additionally, sequestering assets for VA purposes can be a complicated process. How

and when assets can be legally sequestered is covered not only under federal law, but also can

affect HUD and Medicaid entitlements. It is very common for HUD and Medicaid

representatives to misunderstand the issues surrounding asset transfer for VA purposes and some

forms of transfer can make you ineligible for HUB or Medicaid benefits.

It‟s not only a matter of when you can receive help; it‟s the quality of the help and their

knowledge of complicated VA statutes and regulations.


Introduction to VA Disability Scams and Frauds

Now that we have somewhat set the stage by showing the VA legal issues, let us examine

the nature of the scams and fraud being perpetrated on Veterans.

Every provider of long-term care services has been inundated with financial planners

offering to help their residents obtain VA Disability Pension benefits. Many large, national long-

term companies have identified and selected disguised insurance marketing companies to be their

trusted partner in the assistance of Veterans. Often, the firms are disguised under the camouflage

of front organizations that are so-called “not for profit” Veterans advocacy groups. Unless you

are careful, it may even seem as if some of these front organizations are somehow affiliated with

the VA! For example, these firms often create new incorporations that may appear and act as if

they are non-profit charities operating under the banner of names including the terms “Veterans,”

“Benefit,” “Financial,” “Planning,” “Wartime,” “Advocates,” etc. In fact, some names are

deliberately created to provide an illusion that the financial planning company in some manner

has ties to the VA even though the VA took measures as early as 2006 to stop this activity16

It

has become annoying and distracting listening to the various claim and counterclaims of these

individuals. What isn‟t so widely recognized is that using these often poorly informed, poorly

“trained” individuals can put you, your company, and, last but certainly not least, your client at

great legal and financial risk. The purpose of this White Paper is help you identify the Scams,

why they are occurring, and what you can do to protect you and the elderly clients for which you

hold the responsibility of safety.

What you must understand in the beginning of this discussion is that the use of un-

accredited financial planners to assist Veterans is illegal, deceptive and unethical and as a

professional you ought not to be linked to any behavior that can be so described.

16

VA Fast Letter 06-29, Bradley G Mayes, Director, Compensation and Pension Service


VA Scams are Nothing New

In the early to mid-1990s, Insurance Marketing companies offered their agents training

on how to set-up and present seminars on Medicaid planning. Insurance marketing companies

are the middleman in the insurance industry, situated between the insurance company and the

agent. The marketing company‟s goal is to sign-up independent agents (whose commissions

they share) by offering value-added marketing programs to help sell insurance products or as

brokers to access certain specialized insurance products. The marketing company gets a cut of

the agent‟s commission of the products he or she sells.

In fact, the enticements to individual agents are aggressive. We recently were sent a copy

of an email blast from one company stating “Never Prospect for Clients Again!” Why? Because

long-term care communities were going to fall all over themselves to provide the financial

planner with leads from Veterans!

The business problem of these marketing companies is simple. To make money, the

marketing companies have to stay on the cutting edge of offering new, exciting and competitive

marketing programs to lure agents to their fold. In about 2005, the focus of these companies

began to shift from Medicaid planning to offering seminars on “VA Aid and Attendance.” Three

principal companies, one each in Philadelphia, Kansas City and Salt Lake City began offering

classes to “train” insurance salesmen and financial planners. For a fee of between $1,500 and

$3,000, an agent could attend a three day class and receive training on the “Aid and Attendance

Program.” Upon completion, they were awarded diplomas naming them a “Certified Veterans

Benefit Analyst” or “Certified Veterans Benefit Consultant.” On January 2, 2006, Bradley G.

Mayes, the head of the VA Compensation and Pension Bureau in Washington, DC, sent out a

VA Fast Letter to all VA offices condemning this practice and calling on all VA offices to help

put an end to it.17

Obviously, Mr. Mayes efforts were not successful and this practice continues

until now.

For example, in the past, our firm has been approached by a dozen or more of these

companies and, early on, we investigated their approach. Unfortunately, the financial planners

could not be depended on to “do the right thing” when it came to advising Veterans. It always

seemed that the “right” solution for the Veteran was a product or service they were able to sell

for commission. Simple, legal solutions were not discussed and families having hundreds of

17 “Some regional offices have received inquiries or complaints about individuals that were paid by assisted living facilities to

“represent” veterans and other claimants with their VA benefits. These individuals lead claimants and facilities to believe they

have special knowledge of VA laws and can maximize claimants’ entitlement to VA benefits. Although these individuals work for

private companies, they may have job titles that suggest a government connection, e.g., Veterans Benefits Analyst.” VA Fast

Letter 06-29, Bradley G Mayes, Director, Compensation and Pension Service


thousands of dollars were induced to create un-necessary non-VA compliant trusts or purchase

insurance products

The opinion of the VA, as expressed in the Flash Letter from Bradley Mays, is that these

individuals are “preying on the elderly.” In our experience, this is a true statement.


Why are the Activities of Financial Planners Considered Scams?

Because they are illegal, deceptive and unethical.

Webster‟s Dictionary defines “scam” as “a deceptive stratagem for gain.” “Scam” is the

word used by the AARP, the nation‟s largest lobby for the elderly. We feel AARP is correct.

Financial planners are not primarily interested in assisting Veterans. Their motivation is

clearly personal enrichment through the sale of financial products and services to elderly, often

vulnerable seniors. This practice is not only deceptive, it is highly unethical since they do not

disclose the real reason they are offering assistance.

It is for this reason we have no compunction in terming the illegal activity of financial

planners assisting Veterans a “Scam” and those involved in supporting and sponsoring such

ruses as knowingly complicit in a scam. While we admit that these individuals may be

charismatic and seemingly professional, the fact remains, nonetheless is that they are involved in

illegal and highly deceptive activities by claiming they can legally help Veterans when they

cannot. And they have induced unknowing care providers to participate in their illegal program

for gain.

In fact, it must be remembered and emphasized that their entire motivation for even

offering assistance to Veterans is financial gain. The reason is simple.

Eligibility for one of the two disability benefits administered by the VA (Pension) is

partially based on demonstration of “limited net worth.” Since the definition of “limited net

worth” is somewhat vague,18

it is very easily misunderstood. Consequently, financial planners

target Veterans who seem to have assets in excess of what the VA would ordinarily allow and

offer certain insurance products or services (i.e. trusts) that would allow for a portion of the

Veteran‟s estate to be sequestered for VA purposes.

Unfortunately, the product most often recommended is an annuity which, ordinarily, is a

very poor financial investment and may prevent a Veteran from applying for Medicaid due to the

five year look-back rule. The AARP has gone to great lengths to educate seniors about the

pitfalls of the annuity fraud in such articles as “How to Avoid Annuity Fraud” published in the

AARP Bulletin.

Even the insurance industry itself has had to take steps to reel-in their more aggressive

practitioners

18 38 CFR 3.274 - Pension shall be denied or discontinued when the corpus of the estate of the veteran, and of the veteran's

spouse, are such that under all the circumstances, including consideration of the annual income of the veteran, the veteran's

spouse, and the veteran's children, it is reasonable that some part of the corpus of such estates be consumed for the veteran's maintenance.


Please note the following excerpts: “Unfortunately, some of these marketing approaches can be

considered improper pretextual interviews because they:

� Misrepresent the purpose of the agents’ contact with the veteran

as solely to assist in obtaining Aid and Attendance pension benefits,

often for free, when the real goal is to solicit an annuity;

� Misconstrue the agents’ identity and might imply the agent is

working for a non-profit association

It is also interesting to note that at least one major insurance provider has decided to no longer

receive claims based on VA assistance scams.

DATE: January 21, 2011

TO: All American Equity NMO's and Appointed Agents

FROM: James Jones, Vice President - Marketing Services

RE: Veterans Administration Benefits Programs and Marketing

Effective immediately, American Equity will no longer accept business that uses Veterans Administration (VA) Benefits as a prospecting

strategy or that is attempting to qualify individuals for VA Benefits.

As outlined in our November 2010 Regulatory Update (Form RU-1110), using VA Benefits as a prospecting tool may be viewed as a

pretext interview and/or an unauthorized practice of law. Any advice given regarding VA Benefits should only be provided by qualified

advisors.

There is the potential for these programs to not provide adequate disclosure to prospects. Without proper advice, there is the

possibility of adverse tax consequences and situations that could affect future Medicaid eligibility or qualification for other benefits.

Thank you for your attention to this matter.


From these announcements, it is clear that even the insurance industry recognizes the

questionable nature of the problem in that they use terms such as “misrepresent” and

“misconstrue” to label the conduct of their agents.

Also, many unknowledgeable financial planners suggest the creation of trusts for

Veterans. Unfortunately, trusts are generally not compliant with federal law for VA purposes.

Most financial planners only believe that a trust must be “irrevocable” or that the Veterans

cannot access the principal of the trust to be compliant with VA rules. This is not the case. The

applicable regulation is 38 C.F.R. 3.276(b)19

in which the transfer or gifting of assets is

explained. The salient point of law is the term “loss of control.” For an asset to be non-

countable for VA purposes, all control over the asset must be lost. In VA appellate decisions,

(Board citation 0513555, May 18, 2005, Docket No. 01-04 801), the VA has held that language

contained in the trust that directs how the trust may or may not be used is in fact a species of

“control” and is therefore not compliant under 38 C.F.R. 3.276(b). 20

The language even survives

the mental state of the senior. This means that Health Care Trusts, Special Needs Trusts, Living

Trusts, etc. while possibly Medicaid compliant, are not VA compliant.

Any of your Veterans who have been told that these trust are “okay,” are at risk of having

to repay the VA every penny they have received in benefits!

Therefore, regardless of the actual situation, since the goal of the financial planner is

obviously personal enrichment, the long-term care industry simply becomes a means of

introduction to wealthy Veterans and their families to whom can be sold annuities, financial

planning reviews, legal services such as trusts, etc.

So why is offering assistance to your Veterans a scam? Simple. It is deceptive in that it

does not disclose the actual motivation for the services offered.

Not only is the deception that the Veterans is not the main purpose of their activity, it is

also deceptive in that the “best” financial solution for the Veteran is likely going to be one of the

products or services being promoted by the financial planner. In truth, very often, no

intervention whatsoever by an insurance agent is necessary to establish eligibility for VA

Disability Benefits. For example, a Veteran has $112,000 in a money market account. This

exceeds the regulation (38 C.F.R. 3.3) that mandates “limited net worth.” An unscrupulous

agent may recommend establishing a trust or purchasing an annuity when the solution may be as

19

38 CFR 3.276(b)- “A gift of property to someone other than a relative residing in the grantor's household will not be

recognized as reducing the corpus of the grantor's estate unless it is clear that the grantor has relinquished all rights of ownership, including the right of control of the property.” 20

38 CFR 3.276(b): “Transfer of assets. For pension purposes, a gift of property made by an individual to a relative

residing in the same household shall not be recognized as reducing the corpus of the grantor's estate. A sale of property to such a relative shall not be recognized as reducing the corpus of the seller's estate if the purchase price, or other consideration for the sale, is so low as to be tantamount to a gift. A gift of property to someone other than a relative residing in the grantor's household will not be recognized as reducing the corpus of the grantor's estate unless it is clear that the grantor has relinquished all rights of ownership, including the right of control of the property.” (emphasis ours)


simple as adding two other names to the money market account and diluting the ownership

where only $37,333 can be counted against the Veteran!21

The old saying that to a man with a

hammer every problem looks like a nail is certainly true here. The solution to VA benefit

eligibility may be just what I have to sell! We have also been aware of elderly Veterans who got

the impression that unless they worked with the agent, they could not receive VA assistance.

21

38 CFR 3.271(d) also M21-1MR, Part V, Subpart iii, Section I, Topic j: “Example: A surviving spouse has a joint

bank account with her nephew. One half of the interest earned by the joint account is countable income for the surviving spouse.”


The Use of Not- for- Profit Shells

It is a common practice for financial planners engaged in Veterans assistance

scams to create a not-for-profit shell organization as the reputed “front” for their activities. It is

further deceptive in that that seem to be not-for-profit, charitable organizations whose sole

mission is to assist Veterans at no cost. The employees of these shell fronts are often described

as “volunteers.” Of course, these “fronts” are closely tied to a financial planning practice that

actually funds their activities. In our opinion these obviously deceptive fronts border on the

criminally culpable!

The apparent intent is to create the illusion that the not-for-profit is in some manner a

legitimate organization interested in the welfare of Veterans. This scam was exposed in the

October AARP Bulletin article referenced above.

A cursory examination of this unfortunate practice quickly exposes the real intent of the

shell. The forensic question is “How does the not-for-profit shell pay its bills?” Any

organization with staff, office space and expenses obviously has expenses. While a not-for-

profit is not excluded under law from providing services for which they are paid a fee, these

monies cannot come from fees, donations, gratuities or gifts pertaining to VA claims preparation,

presentation, or prosecution (cite: 38 C.F.R. 14.636.) Therefore, the funding must come from

another source. This leaves two possible alternatives, both of which are obviously deceptive.

1. The shell is funded directly or indirectly by another for profit company, in this case an

insurance marketing company.

2. The shell is a “in-name-only” shell that is a front used directly by the insurance

marketing company.

The actual answer is apparent from the methodology used by the insurance marketing

company. As we stated above, insurance marketing companies attempt to attract individual

agents or financial planners to their fold by creating means to attract new business, i.e.

“marketing.” The method being “marketed” is the use of the gratuitous Veterans assistance

strategy to identify new clients for their financial services. In fact, we were just made aware of a

large insurance marketing company involved in this practice to assured their potential agents that

they would “never have to prospect for clients again” because of their VA scam.

Recently, we investigated such an operation in South Florida where the financial planner

had convinced many administrators at assisted living communities that he was a volunteer who

was just “trying to pay it forward.” The ALFs were absolutely convinced that the “volunteer”

had nothing to do with financial planning.

In fact, a cursory search of Florida corporations revealed that the “volunteer” was listed

as an owner both in a financial planning company and an insurance company!


Reviewing material obtained from the “volunteer” contained this telling statement:

“The Veteran and/or family may choose to have any licensed professional do the transfer of

assets for them, however some of our processing team are licensed professionals and are available to

assist with the transfer process at which time they may receive compensation from the product

company…If other planning is involved or if the Veteran and/or family choose not to follow our direction

[name of organization] reserves the right to decline assisting with the entire process.”22

To prove this point, ask yourselves this question: “Who is the person who locally represents

the shell organization?” It is, of course, a financial planner. Therefore the shell “not-for-

profit‟s” agents or representatives locally are “for-profit” financial planners!

This is an obvious give away as to the real intent of the shell: it is operating in a quasi-legal

twilight of “not-for-profit” when the real intent to is to provide financial planners at the local

level with referrals or the means to use VA disability benefits to gain new clients. Since the

agent pays a percentage of his or her commission to the marketing company operating the shell,

there is, in reality a well-marked audit trail that shows this practice for what it truly is, a

deceptive and unethical attempt to camouflage their nefarious activities under the patina of

charity.

Any rational person examining this position should feel a sense of outrage when it becomes

clear that the intent of the “charity” is to sell expensive products or services to unsuspecting

Veterans under the guise that unless they follow the instructions of the financial planner (agent

of the shell) they will not be able to obtain VA disability assistance.

In short, there are many levels of deception inherent in this Scam. If your main goal is to

help elderly Veterans obtain their lawful entitlements, then it is a straightforward ethical conflict

of interest to even pretend that you have another, hidden agenda, to make money by selling legal,

financial services or products.

This process is also unquestionably unethical. Deception however thinly disguised is always

unethical. Ethics would dictate that someone be completely upfront and just state “I am not VA

accredited but I am interested in helping your Veterans so I can earn commissions on my sales.”

But then, who would listen?

22

Copy of firms marketing document in possession of CFEVR


Camouflaging True Intent – The Use of Meaningless Titles

Another facet of the scam we encounter on a regular basis is the use of self-awarded or

entirely meaningless titles used by financial planners. In our catalog of such titles we have

encountered the following. This is not a complete list.

Chartered Federal Employee Benefit Consultant

Veterans Benefit Counselor

Veterans Benefit Analyst

Certified Veterans Benefit Counselor

Volunteer Veterans Consultant

VA Benefit Field Agent

Veterans Benefit Specialist

Representative – American Association of Wartime Veterans

None of these titles have any real meaning whatsoever. They may be awarded by attendance at a

three hour class or upon completion of a CD-based course.


Some Methods Used by Financial Planners to Bypass the Intent of

Federal Law

On June 28, 2008, the VA promulgated an important revision to its representation and

accreditation regulations (38 C.F.R. 14.629) in the Federal Register. Among other items, the

ability for accredited attorneys to represent claimants was somewhat liberalized while additional

restrictions were placed on Veterans Service Officers.

The new language in 38 C.F.R. 14.629 allowed accredited attorneys to be assisted in the

representation of VA benefits claimants by “interns, law students and paralegals” 23

but if and

only if these assistants work under the direct supervision of the accredited attorney. Interns, law

students and paralegals cannot be accredited under the attorney provisions. The key concept

here is the term “direct supervision.”

As discussed above, the VA‟s intent for “direct supervision” is extremely clear. Direct

supervision means that the attorney is actually providing direct, on-site, physical supervision to

the assistant in close geographical proximity, i.e. the same office, reviewing and approving the

work performed by his or her staff. Direct supervision cannot be construed as “supervision at a

distance.”

For example, in our city of Nashville, we have a very well-known financial planner who

has been working this scam for quite some time. Back in the day, this individual would help the

Veteran, sell them financial services, and send the completed claim to a colluding Veterans

Service Officer in a remote Tennessee city. The VSO would illegally send the claim to the VA

as a claim they prepared! Since the revision of law, the financial planner now claims that they

work with an attorney in California and send all of their claims (still illegally prepared!) to the

attorney to file just like the VSO. And the planner states that the reason they use an attorney in

California is because claims get processed faster there!?! (They all go to one of three Pension

Management Centers, in reality.)

So what‟s wrong with this picture? First of all, the financial planner is not one of the

three assistant categories permitted by Federal law (intern, law student or paralegal.) Second,

California is a long, long way for direct supervision! Obviously the scam is (i) deceptive

practice but also (ii) knowingly and blatantly violating Federal law. Is this the kind of person

you want assisting you and your Veterans? Probably not! But it is happening right now!

You have probably seen examples of this scam in your community or with your clients.

A financial planner calls on you. He or she is polite, well-dressed and helpful. They state that

23

38 CFR 14.629(3) and footnote following.


they are able to help your Veterans and unlike others, they don‟t charge anything for their

assistance. And you think, “Great. I get to fill rooms and it doesn‟t cost me anything!” When

asked about accreditation, they say “Well, all of our claims go through a VA-accredited

attorney.”

As you already have learned this just is not legal. And, it is illegal not only under

applicable Federal law but is most probably a violation of state law as well. Offering to assist in

a legal matter without a law license is practicing law without a license and is illegal in all 50

states. You cannot practice law without being admitted to the state bar and you can‟t practice in

front of the VA without being accredited. End of story.

Remember the nature of the Scam: Deceptive, Unethical and Illegal!


The Issue of Fees for Services Rendered

It should be pretty clear by now that the offer to help a Veteran has some pretty

inescapable problems attached to it if you aren‟t in compliance with the law. However, many

financial planners try to dodge this fatal bullet with another piece of self-serving deception; or

rather we should say camouflage.

A good magician tries to distract your attention from the actual transfer of the card or

other “magic” act while it‟s taking place. The financial planner does the same piece of

distraction magic. In this case it is “I don‟t charge a fee for what I do to help your Veterans.”

The fee issue is the camouflage for the illegality.

Everyone now is pretty much aware that the changing of any kind of fee or accepting a

fee for representing a Veteran is illegal (except for an attorney under very limited

circumstances.)24

While this is very true and while the VA makes it clear that even a third-party

cannot even pay a fee for the Veteran (38 C.F.R. 14.636), the fee is not the issue.

We think it is clear that the reason no fee is charged directly is because it is being charged

indirectly in the form of financial planning services and commissions on insurance products.

Sure there are some Veterans who don‟t need these services and may get assistance to some

degree or another, but the financial planner is not going to stay in business long by giving away

his or her time and talent for no remuneration. If the financial planner isn‟t prepared to do an

awful lot of pro bono work (regardless of legality!), they aren‟t going to be around long. And

“not around long” can mean that your Veteran is left high and dry on a claim and phone calls are

not being returned. If a claim is not perfect with regards to evidence, believe us, the VA will

deny the claim in half-a-heartbeat!

Don‟t be misled. Fees are never permitted except under very limited circumstances. The

scam issue is still unchanged: deception, ethics and illegality. The fee issue is just designed to

distract you from the real issues at hand.

24

38 CFR 14.636


So Who Is Getting Hurt: Short Term and Long Term?

The answer is everyone concerned.

First, let‟s consider the Veteran. Generally, the financial planner only speaks about the “VA Aid

and Attendance Pension” or some similar title. As we have shown above this benefit is only a

small part of what can be done to assist Veterans.

For example:

Poor advice is given and a Veteran creates a trust which turns out not to be VA

compliant. The Pensioner is audited by the VAs third-party accounting firm. A demand

is made to repay the entire amount of reward.

An annuity is sold but is not Medicaid compliant. The Veteran is penalized months of

Medicaid eligibility when transferring to a SNF.

The VA requests more evidence on a claim. The family supplies the evidence but

contradicts the evidence needed to secure the benefit. The VA denies the claim.

The VA denies the claim mistakenly or makes a mistake in the award calculation. The

family does not have enough knowledge to handle the denial accurately and files an

appeal. Three years later the appeal is still pending.

The Veteran passes away during the adjudication process. The family does not know of

accrued benefit claims and is denied relief.

Mistakes are made on the annual Eligibility Verification Report. The amount of the VA

benefit is dramatically decreased and a demand is made for repayment; meanwhile the

award is suspended.

The problem is these financial planners simply don‟t understand the law and how to properly

apply it. So who got hurt? The Veteran!

Getting bad advice is just plain risky!

Also, due to lack of understanding in the particular issues in the law, a person might be denied by

the VA when they are actually eligible. Trust us. The VA makes mistakes. From legal

mistakes, to not giving you all the facts in your case, to making simple math errors when they

calculate your award, you can get hurt due to ignorance. Being unjustly denied can make a

difference…a huge difference…in someone‟s life. If it is legitimate, well, okay. But if it is a

VA mistake, it‟s tragic.


Let me provide one final example. There is a persistent myth (and, trust me on this,

that‟s all it is!) that a claimant can have up to $80,000 and the VA will approve them for

Pension. This is a blatant misreading of one of the VA internal policy manuals in the section that

speaks to the size of claimant estates. Nowhere, nowhere in VA law or policy does it say

anything about a “safe” amount of assets. In fact it says just the opposite. The regulations

simply state that a (subjective) determination will be made if the size assets in the estate are – in

the VAs sole opinion – sufficient that some of it should be “reasonably” consumed for their

maintenance. Further instruction is given to the person adjudicating the claim that “the older a

claimant is, the less estate they are expected to have.” Just to reinforce the point, the VA

provides an actuarial table showing projected life-expectancy so the person making this very

subjective decision can make an educated guess just how long your money may last. And even

this isn‟t a binding “rule.” The adjudicator can decide on their own that, well, you should spend

down some of your funds before you are eligible. The unspoken footnote is “and we sure hope

you‟re still alive in a couple of years to resubmit, even if you aren‟t broke before then!”

Let‟s say a financial planner tells a claimant that they can convert part of their estate to an

annuity but it would be okay to keep , oh, say, $70,000.00 in their CDs. The VA makes a

subjective decision (there is no formula, by the way) that the claimant should spend some of their

money first and denies the claim. It‟s really, really hard to go back to the VA two months later

and say something like “Well, now I only have $25,000 in the bank.” The first question the VA

asks is “What happened to the other $45,000?” “Well,” I say, “I gave that money as a gift to my

son and daughter.” Unfortunately one of the restrictions the VA does have on asset gifts is when

it is evident that the gift is designed to enrich heirs at the expense of the VA. Guess what? You

still get denied!

Let us also consider the plight of the long-term care community.

“But I didn‟t have anything to do with helping the Veteran.” Ever hear of Tort law? If I

believe I have been injured by anyone, I have the right to sue that person in court for damages.

Let‟s say you are the Director of Marketing at an Assisted Living and a financial planner

comes in and ask you to let them help your Veterans by holding a seminar and helping – at no

cost, mind – with their “Aid and Attendance” claims. Well, this sounds good to you. Help fill

up a few rooms and doesn‟t cost me anything.

The financial planner comes in, gives a seminar and a dozen claims get filed. In fact,

Mrs. Jones moves her mother in because she was convinced that the sincere financial planner

you introduced her to was going to help Mom get her Aid and Attendance. Now this required

moving some assets, but what the heck, $1056.00 tax-free for the virtually the rest of her life,

what a deal!


Unfortunately, the annuity was not Medicaid compliant and when Momma Jones had to

go to SNF, she found out that the transfer of assets to the annuity invalidates her Medicaid

eligibility for 39 months. Now that‟s 39 months at $165 a day or about $193,050!!

So, Daughter Jones hires a lawyer and the lawyer being a knowledgeable and astute

practitioner knows that when you sue, you go for who has the money to pay direct and indirect

damages. Now the attorney also does some SNF malpractice claims and knows how to play a

sympathetic jury like a Stradivarius. The attorney sues the insurance company, the financial

planner, your company, your Executive Director (because she gave you permission and didn‟t do

due diligence) and you because you gave permission in the first place and Mrs. Jones just

thought you were so trustworthy and wonderful.

Everybody gets sued for the bad advice and guess what, the plaintiffs are winning these

cases! Why, because after deposition and research, the defendant‟s insurance company who

covers for liability makes an out of court settlement for $250,000 rather than go forward with a

messy, long and, therefore, expensive trial. (Don‟t worry about Daughter Jones, her attorney

took the case on a contention basis and she hasn‟t forked over a dime because the lawyer knows

they are going to win!)

Who gets blamed? Er, one guess only, please!

So everyone involved gets hurt in the short term. But what about the long-term results?

These can be just as troublesome and damaging.

For example, every year in January, the VA sends all Pension claimants what is called an

Expense Eligibility Report, the infamous “EVR.” The EVR is an annual report that shows the

VA that you are still financially and otherwise eligible for Pension benefits. There are some

very, very common mistakes that nearly everyone makes on the EVR. Making one of these

simple mistakes results in the VA re-calculating your award (usually much lower, by the way),

stating that you are no longer eligible or worst case, and saying that you were overpaid. The

notice of apparent overpayment is accompanied by a very official looking document from the

VA telling you to repay hundreds, thousands, or even tens of thousands of dollars! And, oh by

the way, we are immediately stopping your VA Pension which you depend on to receive care.

Now, try calling the financial planner and asking for help! First of all, the financial

planner isn‟t knowledgeable enough to help and secondly, they don‟t want to help because it

doesn‟t make them any money. So the Jones family trots down to the county courthouse and

visits with their local VSO who tells them that they need copies of the claim (which Mrs. Jones

never got a copy of) and then tells the family…well, heaven only knows what they will say. I


can promise you this, it won‟t be positive and it won‟t reflect very well on you or the reputation

of your community.

Another thing to think about. What if the claim needs to be adjusted? Care costs go up (or

down). Momma Jones transfers to a SNF. Who deals with the paperwork that needs to go to the

VA?

See what I mean? Just because you were lucky enough to get a claim through in the first place

doesn‟t mean that you‟re going to keep it forever.

Well, I think you see the problem(s). None of the scenarios are pretty and most of them can put

you and your company in the proverbial hot-seat because you tried to do the right thing…but in

the wrong way.


Why Should You Care?

Just last week, we were speaking with a Regional Director of a very well-known assisted

living company headquartered in the Northeast. When we were discussing VA scams and their

effect on his residents, he made what we considered to be an astounding remark: “I really don’t

care who helps my Veterans as long as they get the money!”

Cue the part where our jaws hit floor!

We were left thinking, here is a consummate professional, very knowledgeable, and who

has been around this industry for 20 years, and he doesn’t care if he is breaking the law!?!

Wow! You know, we don’t think it’s so much that he meant to say he didn’t care as much as he

never has stopped to think about it very seriously.

If he was an administrator of a community, he certainly wouldn’t do anything to

violate state law when it came time for the annual record and safety inspection, but here is a

matter of law that can seriously affect the reputation of his company and the safety and well-

being of his residents and he doesn’t care?

Here‟s our point: If you are reading this article you are a professional. Someone who

prides themselves on doing a good job and safe guards their reputation in the marketplace. Why

in the world would you want to put that reputation in jeopardy by turning a blind eye to reality?

Sure you may personally like the financial planner. Sure they may get results for you. But,

folks, it is against the law!

People in the long term care industry often speak with one another about why they got

into elder care to begin with and why they have stayed after so many years. It always comes

down to one common answer: we like and care about old people, people who have entrusted

themselves to our care at what is maybe the second most vulnerable time of their entire lives.

This is a sacred trust, an honor and a privilege. If we take our honor and our trust seriously

(which I hope you do!), you would never, ever, in a million years knowingly do something to

hurt one of these precious souls. Yet, you allow an illegal practitioner running a scam work with

these folks who look to you for guidance and assistance. As professionals we need to begin

acting as professionals!


A Call to Remedial Action

Is there is a way to honestly, openly and legally help your Veterans receive the help they

need and certainly deserve? Yes. Absolutely! In fact, our firm really doesn‟t care who you

choose to use to help Veterans, just be sure you know the facts and the law before you get

started.

At the Center for Elder Veterans Rights, one of our VA-accredited attorneys will be more

than happy to offer you a free consultation on how to insure your Veterans assistance program is

VA compliant and free from dangerous entanglements. You can call (toll-free) anytime to 1-

800-394-1250 any weekday between the hours of 9:00 A.M. to 6:00 P.M. for a free, no

obligation, and private consult with a VA-accredited attorney or email us at [email protected].

mailto:[email protected]

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