modlin dec

SUPERIOR COURT OF PLACER COUNTYSTATE OF CALIFORNIA

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THE PEOPLE OF THE STATE OF CALIFORNIA,1

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Plaintiff,

vs.FIL

Superior CourtCounty of

Df Californiaiacer

No. 11-04-053880

ee;z-/Oi{:tt)DECLARATION IN

4DELBERT JOE MODLIN APR 27 ZOI1 SUPPORT

Defendant.5

6

Jake Ch ttersExecutive Offi er & Clerk

___-::--:-_-;--:-_-:-__.,--;-~"-"........LW.J:>.!.h.!B.Ia dt, DeputyI, the undersigned, say and dec are:

OF ARREST WARRANT

7 I am employed by the Office of the Attorney General as an Investigative Auditor. I

reasonably believe that there is probable cause to arrest the above-named individual for violations8

of:9

Penal Code section 368(D) PC, THEFT, EMBEZZLEMENT, FORGERY, FRAUD OR

10 IDENTITY THEFT FROM AN ELDER OR DEPENDENT ADULT, two counts; Penal Code

11 section 506, FRAUDULENT INTENT TO APPROPRIATE; Vehicle Code section 10851(A),

12 UNLAWFUL DRIVING OR TAKJNG OF A VEHICLE; Penal Code section 118, PERJURY

BY DECLARATION; Penal Code section 470(D), FORGERY.13

My belief is based upon statements and information contained within the report consisting of 25

14pages, which are attached hereto and incorporated by reference as if set forth fully herein.

15I hereby declare under penalty of peIjury that I have read the above report and know

16the contents to be accurately reported and true to the best of my knowledge.

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WHEREFORE, your declarant prays that a warrant of arrest be issued for the arrest of18

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said defendant.

i1m . . 11-011Executed onlll"MCL ! at~~acer County, California.

<-... /.. ZB min arba, Declaranto Ike of the California Attorney General

1 KAMALA D. HARRlSAttorney General of California

2 MARK ZAHNERSUPERVISING DEPUTY ATTORNEY GENERAL

3 STATE BARNo. 137732STEVEN D. MUNI

4 DEPUTY ATTORNEY GENERALSTATE BARNo. 073567

5 BUREAU OF MEDI-CAL FRAUD AND ELDER ABUSE1425 RrvERPARKDRIVE, SUITE 300

6 SACRAMENTO, CA 95815Telephone: (916) 263-1442

7 Fax: (916) 274-2929E-mail: [email protected]

8 ATTORNEYS FOR PLAINTIFF

FOR THE COUNTY OF PLACER

SUPERIOR COURT OF THE STATE OF CALIFORNIA9

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13 PEOPLE OF THE STATE OF CALIFORNIA, Case No.

14 Plaintiff DECLARATION IN SUPPORT OFARREST WARRANT

15 v.AG Diet. No. SA2010103081

16 DELBERT JOE MODLIN,

17 Defendant

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19I, BENJAMIN BARBA, do hereby declare the following:

I am an Investigative Auditor with the California Department of Justice, State of20

California, assigned to the Bureau ofMedi-Cal Fraud and Elder Abuse Prosecution Unit21

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(BMFEA).

This Declaration is submitted in support ofmy request for the issuance of a felony arrest

warrant for DELBERT JOE MODLIN.

DESCRIPTION OF AUTHORITY

Title 42 of the United States Code Section 1396b empowers the BMFEA with the

authority to investigate complaints alleging abuse or neglect ofpatients residing in board and care

facilities. "Board and Care facility" means a residential setting which receives payments

ORIGINAL1

DECLARATION IN SUPPORT OF ARREST WARRANT

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(regardless of the source ofpayment) from or on behalf of two or more unrelated adults who

reside in such facility and for whom one or both of the following is provided: A substantial

amount ofpersonal care services that assist residents with the activities of daily living, including

personal hygiene, dressing, bathing, eating, toileting, ambulation, transfer, positioning, self

medication, body care, travel to medical services, essential shopping, meal preparation, laundry,

and housework.

California Welfare and Institutions Code Section l56l0.07(a) defines abuse of an elder or

a dependent adult as either physical abuse, neglect, financial abuse, abandonment, isolation,

abduction or other treatment with resulting physical harm or pain or mental suffering.

California Welfare and Institutions Code Section 15610.27 defines an elder as any person

residing in California, 65 years of age or older.

DETAILS OF PROBABLE CAUSE

Delbert Joe Modlin's Professional Background

Delbert Joe Modlin (Modlin) is an attorney licensed by the California State BAR (131265)

since 1987 to practice law. Modlin is licensed by the California Department of Insurance

(OE93756) to sell "Accident and Health" and "Life-Only" insurance. Modlin's current license

period is from October 1, 2009 to September 30, 2011. Modlin is a licensed Real Estate Broker

who has been licensed by the California Department of Real Estate (01774755) to sell real estate.

However, Modlin's license expired on October 18,2010. Modlin is a Notary Public certified by

the California Secretary of State (1743090). His current commission expires on May 28,2011.

Modlin has been practicing law for approximately 23 years. He has been working with

elders and performing estate planning for approximately 15 of those years. According to Modlin

about 60% to 70% of his business is with elderly clients. Modlin is a Medicare Set-Aside

Certified Consultant (MSCC) certified by the International Commission on Healthcare

Certification and he considers himself an expert in estate planning and Medi-Cal.

Modlin was the Trustee for the Dale F. Bettinger and Mary U. Bettinger Grantor Trust

(Grantor Trust) from March 18,2010 through November 22, 2010, the Mary U. Bettinger Special

Needs Trust from April 20, 2010 to November 22, 2010 and the Dale F. Bettinger Special Needs

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1 Trust from April 20, 2010 to November 22,2010.

2 Complaint

3 On August 25,2010, BMFEA received a complaint which alleged financial elder abuse.

4 The complaint was received from Debbie Westlake (Westlake), a Fraud Analyst from Addison

5 Avenue Federal Credit Union (Credit Union). The complaint alleged the following: Large sums

6 ofmoney which belonged to Dale F. Bettinger (Bettinger) and Mary U. Bettinger (Mary) had

7 been transferred to the Credit Union by Modlin and the elderly victims' niece, Eleanor Johns

8 (Johns). Modlin had directed Johns to open several accounts at the Roseville Branch of the Credit

9 Union located at 1210 Roseville Parkway in Roseville, California on March 18, 2010. Johns used

10 a Durable Power-of-Attorney (POA) for Bettinger and Mary to transfer $600,000.00 from their

11 financial accounts at Bank of America to the Credit Union.

12 The Credit Union was told by Johns and Modlin that Bettinger and Mary had recently

13 moved into a "secured care facility" called "Alta Vista Living" in Loomis, California. Johns and

14 Modlin told the Credit Union they would need accounts set-up so Bettinger and Mary could have

15 their needs taken care of. Westlake stated Bettinger (DOB March 23,1916) and Mary (DOB

16 October 15, 1912, now deceased) had various [mancial accounts (savings, checking, special needs

17 trusts, and Grantor's Trust) held at the Credit Union. Johns could not be a co-owner on the

18 accounts since she was English and did not have a Social Security Number. As a result, Modlin

19 was made the joint owner on the accounts opened at the Credit Union and had exclusive access to

20 the accounts.

21 The complaint was forwarded to multiple agencies including the Long Term Care

22 Ombudsman. On August 27, 2010, Long Term Care Ombudsman Geneva Carroll (Carroll) met

23 Bettinger and Mary. Carroll interviewed them and determined they needed her assistance.

24 Bettinger told Carroll what had occurred since his fall and hospitalization in March 2010. He

25 conveyed to Carroll how he wanted his car back, wanted an accounting of his finances, wanted

26 his missing possessions and wanted to return to his home which had actually been sold by Modlin

27 without Bettinger's knowledge. Bettinger told Carroll he felt trapped and Modlin had not

28 followed through with anything he had promised. Bettinger did not know his account balances

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1 and did not have access to his funds. On September 13,2010, Bettinger told Carroll he did not

2 know about the two annuities Modlin had bought with his funds and he did not want them.

3 On November 9, 2010, Mary passed away and Carroll learned Johns would receive the

4 proceeds of the annuity purchased for Mary. Carroll introduced Bettinger to a professional

5 fiduciary named Matt Quentmeyer (Quentmeyer) and Bettinger hired Quentmeyer to help re-

6 establish control ofhis remaining [mances.

7 Summary of Investigation

8 My investigation revealed Mary suffered from severe dementia and confusion prior to the

9 events described in this affidavit and up until her death on November 9,2010. Until March 6,

10 2010, Mary and Bettinger lived together in their own home at 11824 Kemper Oaks Court in

11 Auburn, California. At some point three to five days prior to March 6, 201 0 Bettinger fell and

12 became incapacitated at home. Bettinger was unable to reach a phone or otherwise sunrmon help.

13 Due to Mary's severe dementia, she became confused and did not call for assistance for several

14 days. On March 6, 2010 at 9:18 am Mary called "911." In the 911 call Mary informed the

15 Emergency Operator her husband had been kidnapped and there was a "little boy" who was

16 "crippled" in her bed. Mary knew her address and she was able to tell the Emergency Operator

17 her husband's name. Mary was unable to answer many other questions asked by the operator and

18 Mary never said her name during the call.

19 Placer County Deputy SheriffRyan Zender responded to their home. Mary told him the

20 year was 1994 and Lyndon Johnson was the President of the United States. Although Mary knew

21 she was at home she did not know what city she was in. Deputy Zender determined Mary was

22 delusional and unable to care for herself or others. As a result, Mary was detained on a 72 hour

23 hold per Welfare and Institutions Code 5150 and transported to Auburn Faith Hospital by

24 ambulance. Bettinger was frail and weak so he was transported to Kaiser Hospital in Roseville by

25 ambulance. Mary was moved to Kaiser-Roseville later that day and reunited with Bettinger.

26 Both were discharged to a skilled nursing facility in Auburn several days later.

27 Since Bettinger and Mary had no known family members, their neighbors were the only

28 ones available to assist them. Bettinger directed the neighbors to contact Mary's niece, Eleanor

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DECLARAnON IN SUPPORT OF ARREST WARRANT

1 Johns and Johns received a telephone call in England from Bettinger's neighbor. While Bettinger

2 was a patient at Kaiser-Roseville he was attended to by Patricia R. Modlin (patricia). Patricia is a

3 Registered Nurse and Patient Care Coordinator (also known as Discharge Planner) at Kaiser-

4 Roseville who assisted Bettinger with his discharge. Patricia is Modlin's wife and referred

5 Bettinger to Shawana Heintz (Heintz) to expedite their discharge fi'om Kaiser-Roseville.

6 Heintz is a "Senior Placement Agent" and co-owner of a company called Advocate for

7 Seniors (AFS). AFS provides placement services for elders who need assistance in locating

8 appropriate housing. The placement service is paid a fee by the facility into which the elder is

9 moved. Heintz facilitated a move for Bettinger and Mary to Alta Vista, a locked and secured

10 Alzheimer's living facility in Loomis, California. Bettinger required some physical rehabilitation

11 before moving to Alta Vista so he was discharged to Foothill Oaks Skilled Nursing Facility

12 (Foothill Oaks) on March 8, 2010. Mary was discharged to Foothill Oaks on March 9, 2010 and

13 after receiving rehabilitation, Bettinger and Mary both moved to Alta Vista on March 18, 2010.

14 Johns and her husband, William "Bill" Johns, traveled from England to assist Bettinger

15 and Mary. Shortly after arriving, Johns and her husband met with Heintz. Heintz told Johns

16 Bettinger and Mary would notbe able to return to their home. Heintz told Johns she would need

17 to hire an attorney and Heintz recommended Modlin. Heintz has referred other clients to Modlin,

18 and Modlin has performed free legal services for Heintz and her family.

19 Heintz told Johns and her husband Modlin could assist them in setting up an estate plan

20 and she told them in-home care would be far too expensive. Johns says Heintz told them the

21 home would have to be sold, but Heintz maintains she only told Johns Bettinger and Mary should

22 move to an assisted living facility.

23 Modlin apparently met with Johns and her husband for the first time on March 15,2010

24 where an "Attorney Fee Agreement" was signed by Modlin and Johns. It indicated a fee of

25 $50,000.00 "plus additional feesas needed" and it read, "take care ofMary and Dale's affairs for

26 as long as they live. Take a~ditional fees from Grantor Trust after house is sold. Give to charity

27 and discard remainder." Modlin told me his normal attorney's fee was $3,500.00 to $5,500.00 for

28 an irrevocable trust, but he charged Bettinger $50,000.00 plus additional charges to be determined

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1 because he anticipated taking care ofBettinger for the rest of his life, plus selling Bettinger's

2 house and creating different kinds of trusts. Modlin said he would earn the first $35,000.00 to

3 $45,000.00 just by getting Bettinger's house cleaned up and sold. Modlin also told me this was

4 the first time he had become a Trustee and he only did it because Johns was out of the country.

5 He also told me he had paid himself the first $35,000.00 of the fee, but when he tried to take the

6 remaining $15,000.00, the bank had frozen the assets and he was unable to do so.

7 Modlin told me he met with Johns, her husband, Bettinger and Mary again on March 17,

8 2010 to create POAs for Mary and Bettinger-the day before Bettinger and Mary were to move

9 to a locked Alzheimer's facility. Modlin admitted he understood Mary had been diagnosed with

10 Alzheimer's disease and he was aware Mary had a documented history of dementia and

11 confusion. However, Modlin still had Mary sign a POA appointing Johns as her agent. Bettinger

12 also signed an identical POA. Both POAs were witnessed and notarized by Modlin. In that

13 notarization, Modlin specifically, and under penalty ofpeJjury, certified that Mary acknowledged

14 to Modlin as notary that she, Mary, was executing this Power of Attorney in her authorized

15 capacity.

16 Modlin then established the Grantor Trust with a signature from Johns as "Attorney-in-

17 fact" on March 18, 2010 and their home was placed into the Grantor Trust. Two additional

18 special needs trusts were created after Johns returned to England. On April 20, 2010, Modlin and

19 his business associate, "William A. Glover" (Glover), created the special needs trusts with Glover

20 as "Settlor." Modlin was named Trustee of all three trusts.

21 In March 2010, when Bettinger and Mary left their home they had more than $444,000.00

22 in cash and Certificates of Deposit (CDs) which were taken from accounts at Wells Fargo and

23 Bank of America. The funds were deposited into the new Credit Union accounts in three

24 cashier's checks. In April 2010, five separate wire transfers were made from the Credit Union to

25 Halifax Bank in England (also known as the Bank of Scotland). Each transfer was $75,000.00

26 and was wired to Johns as the "beneficiary." The stated purposes of the wires were "Medi-Cal

27 Planning" and the total amount wired to Johns in England was $375,000.00. The Credit Union

28 charged an additional $200.00 in fees.

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1 In May 2010, the funds were wired back from Johns to the Credit Union. The Credit

2 Union received five incoming wires in the following amounts on the following dates: 5/6/10

3 $67,687.95,5/10/10 - $71,784.77, 5/11110 - $70,105.51 and $75,050.00 and on 5/12/10-

4 $70,948.13. The total amount ofthe wired funds was $355,576.36. The funds were wired from

5 Johns directly to Modlin and deposited into Modlin's personal account at the Credit Union. An

6 analysis of the wires determined Modlin received $19,423.64 less than he sent. When the

7 $200.00 in additional outgoing wire fees from the Credit Union were added it showed Bettinger

8 lost a total of$19,623.64 froni the wire transfers orchestrated by Modlin.

9 However, the entire $19,623.64 loss was not from falling currency exchange rates

10 between US Dollars and English Pounds. If an estimate of currency exchange rates is used it

11 would show approximately $522.18 was paid in fees from English banks to wire the funds to

12 Johns and back. Additionally, Johns kept $1,778.63 of the funds wired. Modlin never asked

13 Johns to provide an accounting of the $19,423.64 he knew was lost in the exchange. On March

14 15,2011, Johns voluntarily wired $2,708.26 to Bettinger to repay him for the amount she had

15 kept. Johns did not explain why she sent more funds than she had actually kept.

16 When I interviewed Modlin, he claimed the funds were wired to fulfill eligibility

17 requirements for Medi-Cal Long Term Care benefits for Bettinger and Mary. Medi-Cal only

18 provides long term care benefits to those who are unable to pay for their own care. As a result,

19 Medi-Cal has strict guidelines which must be followed before individuals can give away or "gift"

20 their assets to others to impoverish themselves and qualify for long term care benefits. Certain

21 assets are exempt from Medi-Ca1 property limits and all but $35.00 of a person's monthly income

22 is paid toward their "share-of-cost" of the monthly long term care they receive.

23 I interviewed four California Department of Health Care experts in Medi-Cal eligibility,

24 Pritesh Mogera, Leanna Pierson, Robert Laederich and Wendy Digiorno by telephone conference

25 call. They told me the amounts Modlin wired exceeded the Medi-Cal gifting limits. The plan

26 Modlin created and executed <;lid not qualify them for Medi-Cal benefits. His plan actually made

27 them ineligible for benefits[or approximately one year. Even if they had qualified for Medi-Cal

28 their monthly income (which was in excess of$5,000.00 a month) would have been taken by

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1 Medi-Cal each month to cover the majority of the costs associated with their care. Medi-Cal

2 planning was not appropriate for Bettinger and Mary and it was not necessary.

3 They informed me there was no need to create the special needs trusts and Modlin should

4 have known their horne would be exempt from the asset limits and did not need to be sold.

5 According to the Department ofHealth Care Services experts, no attorney who wanted to qualify

6 their client for Medi-Cal Long Term Care benefits would have created this estate plan, and the

7 estate plan created by Modlin only succeeded in taking control away from Bettinger of his life's

8 savings and assets.

9 On May 17, 2010, Modlin started moving the funds which had been sent back by Johns.

10 Modlin wrote two checks for $171,000.00 each. One check was deposited into the special needs

11 trust account for Mary and the other was deposited into the special needs trust account for

12 Bettinger which were both controlled solely by Modlin. Modlin used the funds to purchase two

13 annuities from American National Insurance Company (ANICO) for $170,000.00 each.

14 The annuities were purchased with the trusts as the "owner" and "beneficiary" and Johns

15 as the "annuitant." Modlin told me the annuities were chosen as investments as he believed the

16 annuities would "shelter" the funds taken out of their control from Medi-Cal asset limits. The

17 annuities were sold byModlin's brother, Lawrence C. Modlin (Lawrence). Lawrence is a

18 licensed insurance agent who works out ofModlin's office. Lawrence was paid $15,300.00 by

19 ANICO in commissions on June 10, 2010 for the sale of the two annuities. The next day

20 Lawrence gave Modlin a check for $7,500.00, although Modlin told me Lawrence neither shared

21 his commission nor paid any type of "finder's fee" to Modlin.

22 While Modlin was Trustee and in sole control of Bettinger's finances he did not safeguard

23 the funds or uphold his fiduci<trY responsibilities. Modlin did not provide any accounting to

24 Johns, Bettinger or anyone to show how their funds were spent. Modlin did not perform any

25 reconciliation of accounts, and Modlin told me he never even opened an account statement.

26 Modlin admitted to making two ATM withdrawals of $503.50 each from Bettinger's

27 Credit Union checking account at an ATM located inside of Thunder Valley Casino in Lincoln,

28 California, using the ATM card issued for the account. Modlin alleged the withdrawals were

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DECLARAnON IN SUPPORT OF ARREST WARRANT I

1 made by mistake since his ATM card was identical to Bettinger's card and the two were next to

2 each other in his wallet. Since Modlin never reviewed any account statements he claimed did not

3 realize he had used Bettinger's card. Modlin only repaid the missing funds after they were

4 discovered months later by the Credit Union and Bettinger. He did not provide a valid

5 explanation as to why he was carrying Bettinger's ATM card in his own wallet.

6 In addition, Modlin failed to perform his fiduciary duty by not protecting their physical

7 possessions. In March 2010, Johns arranged for a few pieces offumiture and some small items to

8 be delivered to Bettinger and Mary's one bedroom apartment at Alta Vista. A smal! number of

9 their valuables were also taken back to England for safekeeping. However, the entire home

10 (which contained all of their remaining possessions) was "cleaned" and prepared for sale by

11 Modlin's son-in-law, Alexander K. "Ken" Pogue, Jr. (Pogue).

12 Pogue was unemployed, unlicensed, uninsured and unbonded. Pogue did not have any

13 experience with antiques, hadno,expertise with handling property and no experience with estate

14 sales. Pogue admitted he was receiving unemployment benefits at the time. Modlin hired Pogue

15 and paid him $2,225.00 from Bettinger's checking account. Pogue determined which items from

16 the home were to be salvaged and put into storage, which items were to be given to charity and

17 which items were to be disposed of. Modlin rented three or four large rol!-away dumpsters which

18 Pogue filled with Bettinger and Mary's belongings and had taken to the landfil!.

19 Pogue did not create any type of inventory or account for their property in any way.

20 Pogue did not keep receipts from the charities where the items were al!egedly donated and neither

21 Pogue nor Modlin ever consulted with Bettinger or Mary. Pogue asserted he removed items from

22 the house under Modlin's direction and he only did what Modlin asked him to do. Pogue used his

23 personal vehicle to transport some oftheir furniture and other items to a storage facility in

24 Folsom, California with Modlin's assistance. In August 2010, right before the sale of the home,

25 Pogue took a 100+ year old family heirloom serving table from Bettinger's house. Pogue

26 transported the table under Modlin's direction to Modlin's home in Folsom. Modlin also took

27 Bettinger's automobile and had it parked in front oflus own house.

28 As part of the estate plan created by Modlin, he arranged for the sale of Bettinger and

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1 Mary's home. Since the home had been placed in the Grantor's Trust Modlin had sole control as

2 Trustee. Modlin hired a realtor, a landscaper and a contractor to make repairs to the house.

3 Modlin signed all legal documents at Placer Title Company and handled all ofthe financial

4 transactions. The home was sold on August 25, 2010 although Bettinger had asked Modlin not to

5 sell it. Modlin admitted Bettinger did not want to sell the house, but Modlin told me he had

6 convinced Bettinger to sell it. Bettinger was quite clear in talking with me that he had

7 specifically told Modlin not to sell the house.

8 The funds from the sale were placed into the Grantor Trust account at the Credit Union

9 which was solely controlled by Modlin. In September 2010, Modlin attempted to purchase a

10 $300,000.00 annuity from ANICO with the sale proceeds. Modlin purchased the annuity from

11 Lawrence and Lawrence would have earned another commission of$13,500.00. However, the

12 Credit Union believed the check written to ANICO was flawed. The Credit Union suspected

13 elder abuse and temporarily froze the funds in the account. As a result, the annuity was canceled.

14 Modlin attempted to pay himself$15,000.00 for overseeing the sale ofthe home.

15 Modlin's fee was higher than the $10,200.00 (3.00% Commission) paid to each of the real estate

16 agents making the transaction. However, since the Credit Union account was frozen Modlin

17 never received the $15,000.00. Modlin protested the freezing of the account and threatened legal

18 action against the Credit Union if they did not make the funds available. Modlin later stopped

19 pursuing the $15,000.00 payment.

20 On November 22, 20 I0, Modlin resigned as Trustee after many weeks of refusing

21 repeated requests by Quentmeyer and others to do so. Modlin turned over control of the Credit

22 Union accounts and gave Quentmeyer incomplete documentation from the approximately eight

23 months he had managed Bettinger's affairs.

24 Modlin gave Quentmeyer the key and title to Bettinger's car and informed Quentmeyer

25 the car was parked in front of his home in Folsom. Modlin had made several efforts to transfer

26 Bettinger's car into his name, but the Department of Motor Vehicles (DMV) did not accept the

27 paperwork. However, for an unknown reason Modlin and his wife, Patricia, did sign and file a

28 transfer notice with the DMV, transferring the car back to Bettinger and registering it in his name

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1 shortly before returning the keys to Quentmeyer. 111 the DMV paperwork Modlin filed he

2 claimed the title had been lost. Modlin also gave Quentmeyer the key to a storage unit in Folsom,

3 but did not provide an inventory or the proper security code to access the unit.

4 On November 30,2010, I observed Bettinger's 100+ year old serving table in Modlin's

5 Roseville office. This was eight days after Modlin resigned as Trustee and Modlin no longer had

6 any relationship with Bettinger. Modlin had not informed us about the table on November 22,

7 2010 as the office was searched during the execution ofPlacer County Search Warrant number

8 63-016205. On December 2,2010, Modlin returned Bettinger's table to Quentmeyer.

9 Quentmeyer assisted Bettinger in his move from the locked Alta Vista facility to Oakwood

10 Village, an assisted living facility in Auburn. Quentmeyer took Bettinger to the storage unit in

11 Folsom and recovered what he could of Bettinger's furniture to be moved to his new apartment in

12 Oakwood Village.

13 In February and March of20ll, I determined Pogue had kept some of Bettinger' s

14 furniture and possessions since April 2010. Pogue told me Modlin had given him Bettinger's

15 large china cabinet and some, assorted china for free. On March 10,2011, Pogue voluntarily

16 returned the items to Quentmeyer. After Pogue returued the china cabinet and china, his wife,

17 Patricia Tatterson-Pogue, informed me she had found the very old Bettinger family Bible in her

18 home and wanted to return it. On March 22,2011, the family Bible was returned to Quentmeyer

19 who hand-delivered it to Bettinger.

20 Carroll, the Ombudsman, informed me Modlin had told her he checked on Bettinger

21 constantly, and he admitted to her he had mistakenly used Bettinger's ATM at Thunder Valley

22 Casino. Modlin also told Carroll he may have used Bettinger's ATM card for "dinner" a couple

23 oftimes.

24 On April 4, 2011, I served a bank records search warrant on Modlin's personal checking

25 account at U.S. Bank (account number 153456559324). A review ofthese bank records indicates

26 numerous payments, by ATM and other electronic withdrawals to Thunder Valley Casino. The

27 withdrawals are made at least weekly and often occur multiple times in one day and/or over

28 several consecutive days during the week. The withdrawals range in amounts from $503.50 a day

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1 to as much as $7,000.00 in a single day. Records show Modlin withdrew $7,000.00 on a single

2 day on multiple occasions. This level of withdrawal activity at Thunder Valley Casino dates back

3 prior to Modlin's hiring by Johns. The level ofwithdrawals continue all throughout 2010 and up

4 through the current bank statement ending on March 18, 2011.

5 Interviews

6 Interviews of Victim Dale F. Bettinger

7 I interviewed Bettinger multiple times from November 2010 through March 2011. During

8 these interviews Bettinger, although a little vague on some details, appeared reasonably clear and

9 able to relate what had happened. On November 12,2010, during our first interview Bettinger

10 told me he had fallen in their home and had "blacked out" for "five days" before he was taken by

11 ambulance to Kaiser-Roseville.

12 Bettinger could not recall the date when he first met Modlin and he could not remember

13 exactly how they had met. Mary's niece, Johns, was visiting from England and she "made

14 decisions" for them. Johns was very "busy" taking care of everything for the 10 days she was in

15 town. Once Modlin got involved Bettinger no longer knew any details.

16 Bettinger told me that he was making more than $5,000.00 each month, his house was

17 paid for, he paid all of his bills, managed all ofhis finances, paid his taxes on-time, and had no

18 problems. Bettinger had $230,000.00 in cash and CD's at Bank ofAmerica but Modlin and Johns

19 had his money moved to another bank. Modlin did not tell him where his money was moved

20 andJor invested. Bettinger w\ls not familiar with the annuities Modlin had purchased and he had

21 never met Modlin's brother or anyone to discuss investments. Bettinger did not have access to

22 his funds and he did not know why.

23 Bettinger stated Modlin sold his home against his wishes. Bettinger told Modlin to stop

24 the sale of the home and Modlin never even informed him when the house sold. Bettinger

25 learned his home had sold when Carroll told him. Modlin, Johns and her husband handled all of

26 his and Mary's possessions and Bettinger does not know where most of them are.

27 A few pieces of furniture were in his apartment but "65 years" worth ofpossessions were

28 gone, including passports, funeral plot documents, furniture, clothing and personal mementos.

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1 Bettinger wanted to keep everything he had and nobody asked him what to sell or throwaway.

2 Bettinger did not know where his 1998 Oldsmobile Cutlass was or his collection of guns, stamps,

3 coins and other important keepsakes. Modlin told him his possessions were in a storage facility

4 near Modlin's home in Folsom but Bettinger did not know the name ofthe facility and Modlin

5 never gave him a list of what was or was not in storage. Bettinger told me Modlin was not his

6 attorney and he did not want Modlin to have access to his checking account.

7 On January 7,2011, I interviewed Bettinger again with the assistance of other DOJ

8 personnel at Oakwood Village, shortly after he had moved there. He stated again Modlin was not

9 his attorney but Modlin had been brought by his niece, Johns and her husband when they arrived

10 from England in March 2010. Johns and her husband "did not know American law" and

11 Bettinger could not recall signing anything for Modlin. However, Bettinger remembered signing

12 a power-of-attorney for Johns. Bettinger was appreciative of the help Johns and her husband

13 were trying to provide.

14 Bettinger told us he had not given Modlin or anyone else permission to sell his home.

15 Bettinger did not tell us where or when he told Modlin, but Bettinger insisted he told Modlin to

16 "take it off the market." Bettinger did not give Modlin permission to take his car and he had not

17 seen it in months.

18 Bettinger did not give Modlin, Johns, or anyone else permission to give away, sell, or

19 dispose of any of his possessions. Bettinger was aware Johns had taken jewelry and gold watches

20 back to England for safekeeping, but he did not know where any of his other valuables had gone.

21 Bettinger described specific items he had owned but now could not find. Bettinger told us he had

22 not given Modlin or anybody else permission to take his small wheeled table. The table had been

23 in his family since he was a small boy and was very important to him. The table had been taken

24 from Bettinger's house after it was sold and was not in the storage facility. Bettinger finally got

25 the table back which I observed in Bettinger's apartment.

26 Bettinger said he never gave Modlin permission to use his ATM card at Thunder Valley

27 Casino. Bettinger discovered Modlin had used his ATM card when he fonnd the charges on his

28 bank statements. Bettinger did not tell us when he first learned of the charges but said it was after

13


1 Carroll had started helping him. Modlin gave Bettinger a photocopy of the front and back sides

2 of two ATM cards along with a receipt for $1,007.00 deposit. A handwritten note read "to

3 correct mistaken withdrawal."

4 Interview and Email Contacts with Eleanor Johns

5 On November 16,2010, I interviewed Jolms by telephone. Jolms and her husband came

6 from England for approximately 10 days in March 2010 to handle Bettinger and Mary's affairs.

7 Heintz assisted Jolms and Jolms believed Heintz was an "advocate" working for Kaiser. Heintz

8 told Jolms Bettinger and Mary needed placement in an assisted living facility and they needed

9 legal representation so she introduced Johns to Modlin. Jolms said Bettinger and Mary discussed

10 it and they decided they wanted Jolms to become their POA. Even though Jolms knew Mary had

11 a history of dementia and confusion, she felt Mary was "fine" the first thing in the morning when

12 they discussed the POA and Modlin prepared them. The POAs were signed by Bettinger, Mary

13 and Jolms. Afterwards Jolms had control of their finances but left all of the decisions to Modlin.

14 Bettinger informed Jolms he had cash hidden in their Auburn home and he showed Jolms

15 where it was kept. Jolms gathered up the cash with Bettinger and took it to Bank ofAmerica. It

16 took Bank of America "four recounts" but they counted over $200,000.00 in cash and deposited it

17 into Bettinger's accounts. Jolms stated Bettinger also had an account with approximately

18 $200,000.00 in the Isle of Jersey which is an island off the coast of England. Jolms used her POA

19 in November 2010 and went through the English courts to have the account closed and transferred

20 to herself. Jolms later wired the funds wired to Bettinger's account at the Credit Union.

21 Modlin explained to Johns they would have to transfer money out ofBettinger and Mary's

22 accounts and move it into special needs trust accounts. However, Jolms did not really understand

23 why. Jolms trusted Modlin and left the decisions up to him. Jolms did not know how much

24 Modlin had received in fees and could not remember discussing what the total fees would be.

25 Modlin did not discuss the i,nvestment strategy in detail, and Jolms did not know anything about

26 the annuities before Modlin purchased them. Modlin told Jolms he would invest the money so

27 there would "always be money for their care."

28 Jolms stated when they left the United States the house had not been sold. Jolms arranged

14


I for a few pieces of furniture to be sent to their new apartment and she left money for a television

2 to be purchased. Johns left the house keys and verbal instructions with Modlin to clean the house,

3 Modlin told Johns he kept the car and "some bedroom furniture" which was put in a storage

4 facility, Modlin did not provide Johns with an inventory of their remaining possessions and

5 Johns felt much ofwhat was left in the house was ')unk" purchased at "thrift shops and dollar

6 stores," Johns knew the items may have been important to them but she did not have time to "go

7 through" the entire house, Modlin did not tell them how or where he disposed of the property.

8 Johns took the jewelry from the unlocked jewelry box back to England for safe keeping, Johns

9 did not want to leave it in the empty home and Heintz told Johns she could not tell Bettinger or

10 Mary about the items, Johns stated they just "had to trust" Modlin with the sale ofthe home, the

II handling of the possessions and the investments since they had very little time here, Johns last

12 spoke with Modlin by telephone in November 20I0 when she had flowers sent to Mary's service.

13 On March 3, 2011, via an email, Johns explained she still did not understand why Modlin

14 had to transfer the money to her at all, and she explained there was a lot of money lost in the

15 exchange, Johns received the funds by wire with a rate of $1.57 per pound and wired it back to

16 Modlin at $1.50 per pound. Johns estimated they lost between $18,000.00 and $19,000.00 in the

17 exchange, Johns found "a discrepancy of £1,175,70" but she did not know how it happened and

18 she wanted to wire the funds back to Bettinger. Johns wrote another brief explanation of what

19 had occurred and described the many health problems she dealt with while she was handling

20 Bettinger and Mary's affairs. Johns wrote, "We had to take Mr Modlin at face value as we were

21 introduced to him by Mary and Dale's senior advocate and the running the account was left up to

22 Mr Modlin because of our circumstances and the distance between us,"

23 On March 15, 2011, Johns informed me by email she had wired £1,750.20 from her

24 account to "Dales Conservatorship account" to pay the discrepancy from the original transfers,

25 Johns provided confirmation from the bank which showed she converted £1,750.20 to $2,708.26

26 and transferred it on March 15, 2011 to "Dale Francis Bettinger."

27 III

28 III

15

DECLARATION IN SUPPORT OF ARREST WARRANT I

1 Interview with Ed Corey

2 On November 17, 2010, I interviewed Edward J. Corey (Corey) who is an expert in estate

3 and trust litigation, financial/fiduciary abuse, elder financial abuse, trust administration, probate,

4 and conservatorships. Corey is an attorney with Weintraub, Genshlea, and Chediak. The facts of

5 the case were provided to Corey and he told me the following: Based on his understanding of the

6 case, there was no benefit to Bettinger and Mary in selling their home and establishing the

7 annuities. There was no tax benefit in transferring the residence of the Bettinger estate to Johns

8 and then transferring the funds back to the trust accounts. The actions taken by Modlin would not

9 qualify either spouse for Medi-Cal since the funds were disbursed from the estate and it would

10 make little sense to qualify them given their financial status.

11 In Corey's opinion it was inappropriate for Modlin or anyone familiar with California law

12 to reasonably believe Mary had the capacity to enter into any legal arraigmnent. Corey found it

13 egregious and grossly unconscionable that the fee agreement for Bettinger and Mary was for

14 $50,000.00 plus additional fees. Since they already owned a home, held CDs, and had financial

15 accounts, there was no advantage served to them by purchasing annuities. In Corey's opinion the

16 annuities were an unsuitable investment for clients like Mary and Bettinger. The interest rate on

17 the annuities was ofno consequence and Corey could only see a benefit for the attorney and a

18 commission for the annuity salesman.

19 Interviews with Matt Quentmeyer, Professional Fiduciary

20 On various dates from November 2010 through March 2011, I interviewed Quentrneyer

21 in-person, over the telephone or through the exchange ofemails. In summary, Quentmeyer

22 provided the following information:

23 On December 2, 2010, Quentmeyer picked up the rolling serving table with from

24 Modlin's Roseville office. Quentmeyer repaired the broken drawer and delivered the table to

25 Bettinger at his new room at Oakwood Village. On March 10, 2011, he picked up the china

26 cabinet with two boxes of loose china wrapped in newspaper from Pogue's house in Orangevale.

27 Pogue also gave Quentrneyer a small table and stainless steel serving ware. On March 22,2011,

28 Quentrneyer picked up Bettinger's family Bible from Pogue's house in Orangevale. Pressed into

16


1 the pages ofthe Bible were pictures, newspaper clippings and other small mementos.

2 On March 22,2011, Quentmeyer informed me Johns had wired a total of$235,959.53

3 from funds held in an "offshore" Jersey Island account in Bettinger's name. Johns closed the

4 account in September 2010 and took possession of the funds as POA. Johns wired a portion of

5 the funds in November 2010 and the remainder ofthe funds in March 2011.

6 On March 29,2011, Quentmeyer provided me with all ofthe account balances for the

7 Bettinger financial conservatorship and assorted trusts. The information showed Quentmeyer

8 controlled a total of$891,005.90 held in cash or annuities by the conservatorship and/or the three

9 trusts. A total of $545,485.32 was held in cash at two local financial institutions.

10 Review of Documents

11 Durable Powers of Attorney

12 The POAs are essentially identical for both Bettinger and Mary. The only differences in

13 the POAs are the names of the Principal listed on each POA. "Mary U. Bettinger" is listed as the

14 Principal on one and "Dale F. Bettinger" is shown as the Principal on the other. The POAs name

15 Johns as the "true and lawful attorney-in-fact" or "Agent." Johns' husband, "William Johns," is

16 listed as the "Successor Agent!' The POAs are both dated March 17, 2010. Mary's POA is

17 signed with the name "Mary,U. Bettinger" and the other is signed with the name "Dale F.

18 Bettinger." Both POAs were personally witnessed and notarized by Modlin on March 17,2010.

19 Article 5 of the POAs give Johns authority over their finances, real and personal property,

20 tax matters, and estate planning. The Agent can open bank accounts for them, sell property for

21 them, enter into agreements, file tax returns and handle many other responsibilities. Article

22 5.3(e)(3) addresses Medi-Cal gifting and states, in part the Agent has the authority to "gift exempt

23 assets or non-exempt assets as may be necessary or advisable to carry out the purposes of this

24 provision (including gifts to my designated agent), even if a period of ineligibility for

25 Govennnental Benefits may result."

26 Article 6 ofthe POAs contains a "Limitation on Authority of Agent." This article states

27 the Agent (Johns) "shall not take any actions under this Power ofAttorney without first

28 consulting with me and obtaining my instructions and directions, provided I am physically and

17


I mentally capable of giving such instructions and directions. If I am physically and mentally

2 capable of giving such instructions and directions, the Agent shall follow such instructions and

3 directions, without any personal liability whatsoever."

4 Review of Trusts

5 I reviewed the three trusts Modlin created and noted the following: "The Dale F.

6 Bettinger and Mary U. Bettinger Grantor Trust" was created on March 18, 2010 with signatures

7 from Johns as "Attorney-in-fact" for Bettinger and Mary. The irrevocable trust was established

8 "as a means by which assets, which may include real property may be held for the benefit ofthe

9 trust beneficiaries." Modlin was named as the original trustee and Johns was named as the

10 lifetime beneficiary of the Grantor Trust. The Grantor Trust is irrevocable and Bettinger and

II Mary have no power to alter, amend, revoke, or terminate any trust provision or interest, whether

12 under this trust or any statute or other rule oflaw. The Grantor Trust was notarized by Notary

13 Public Jennifer Diane Moldrup.

14 The Trustee has the authority to open bank accounts for the Grantor's Trust and will "be

15 responsible for the maintenance of adequate records showing the financial condition of the trust."

16 The Trustee can hire advisors, attorneys, accountants or pay for assistance from other

17 professionals. The Grantor Trust records should be "open for inspection at all reasonable times"

18 by Bettinger and Mary and the Trustee is responsible for providing an annual "accounting." The

19 Trustee may "pay himself or herself reasonable compensation for his or her services rendered."

20 The only property placed in the Grantor's Trust was the home owned by Bettinger and Mary.

21 Placer County property recor4~ show the home was later sold on August 24, 2010.

22 The "Mary U. Bettipger Special Needs Trust" and the "Dale F. Bettinger Special Needs

23 Trust" were established for Mary and Bettinger who were both considered, "a person with special

24 needs." The irrevocable trusts were both executed on April 20, 2010 with Modlin as the "Initial

25 Trustee," "William A. Glover" as the "Settlor" and Johns and her husband as successor Trustees.

26 Both trusts were witnessed and notarized by "S. Henkel."

27 The special needs trusts were intended to provide "benefits" for them "without interfering

28 with or reducing the benefits" to which they would be entitled to from any government agency.

18


1 The Trustee "agrees to accept, hold, and administer the assets of this trust and to perform the

2 duties of trustee, as provided, and solely for the purposes stated, in this trust instrument."

3 Both trusts were "funded" with a $5.00 "gift" on each trust from Glover. Additional funds

4 or property may be added to the trusts with the approval of the Trustee. The assets held in the

5 trusts should not be commingled with any of Bettinger or Mary's assets. The assets held in the

6 special needs trusts do not belong to Bettinger and Mary, and no funds belonging to Bettinger

7 and/or Mary should ever be added. The funds in the trusts are controlled by the Trustee, and the

8 Trustee alone decides how todistribute the funds including "Reasonable attorney" fees. An

9 armual "accounting" of the monies in the trusts should be reported to Bettinger and/or Mary, and

10 the books should be "open at all reasonable times to inspection" by them. The trusts will be

11 terminated upon their deaths and all remaining principle in the trusts will be distributed to Johns.

12 Attorney Fee Agreement

13 I reviewed the "Attorney Fee Agreement" between Modlin and Johns. It indicated a fee

14 of$50,000.00 "plus additional fees as needed" was agreed to by both parties on March 15,2010.

15 The agreement reads, "take care ofMary and Dale's affairs for as long as they live. Take

16 additional fees from Grantor Trust after house is sold. Give to charity and discard remainder."

17 The agreement states Modlin Will prepare all necessary documents, including irrevocable trust

18 and medical planning docU1l1.ents. Johns also signed an authorization allowing Modlin to sign and

19 act as joint owner of any and all bank accounts with Mary and Bettinger. It also indicates Johns

20 waives any and all conflicts of interest that may result from saidjoint ownership.

21 Medical Record Review

22 Medical records for Bettinger and Mary from Kaiser-Roseville and Foothill Oaks were

23 reviewed by Bureau of Medi-Cal Fraud and Elder Abuse Nurse Evaluator Sherry Huntsinger.

24 Huntsinger described her findings to me in detail and she determined the following:

25 Bettinger was 94 years old when he was admitted to Kaiser-Roseville on March 6,2010

26 for "generalized body pains and fall, with contusions and dehydration." Dr. Quan T. Nguyen's

27 history and physical indicated Bettinger appeared to be confused with poor short term memory.

28 However, Dr. Nguyen's note showed Bettinger was able to give lots of financial information to

19


1 the social worker. On March 7, 2010, notes from Bettinger's chart show he was seen by "Patricia

2 R. Modlin" who started the process ofhaving Bettinger transferred to Foothill Oaks.

3 Mary was 97 years old when she was taken from her home on March 6, 2010 on a "5150

4 Hold." Mary was transferred to Kaiser-Roseville later the same day from Sutter Aubum Hospital

5 after she was evaluated ther~. When Mary was admitted to Kaiser-Roseville she was noted to be

6 frail looking and pleasantly confused. Mary was aware Bettinger was also at the same hospital

7 and she asked to see him. Mary was discharged to skilled nursing facility Foothill Oaks on

8 March 9, 2010, and then to a secure (locked) Alzheimer's assisted living facility Alta Vista on

9 March 19,2010.

10 Addison Avenue Federal Credit Union Records

II In March 2010, April 2010, and August 2010, Modlin opened a total often separate

12 enumerated checking and savings accounts at the Credit Union relating to Bettinger and Mary.

13 Each checking/savings account had their own account number but the checking and savings were

14 linked together as one account. Modlin opened six of these checking/savings accounts as (I) the

15 Trustee ofthe Grantors Trust (45161346 and 45161379), (2) the Dale F. Bettinger Special Needs

16 Trust (45018074 and 45018108) and (3) the Mary U. Bettinger Special Needs Trust (45018082

17 and 45018090). Modlin opened joint checking/savings accounts for Bettinger (44949709 and

18 44949758), and Mary (44960367 and 44960359), with himself as co-owner of the accounts. In

19 addition, Modlin also opened a checking/savings account solely in his own name for his own

20 personal use (44960292 and 44960300).

21 My review of all these accounts determined Modlin wrote seven checks for a total of

22 $27,258.00 payable to himself from Bettinger's Credit Union checking account. Some, but not

23 all of the checks contained memos which indicated the payment was for Trustee or legal fees. Of

24 the checks written by Modlin to himself, five checks totaling $19,458.00 were deposited into US

25 Bank account number 153456559324. (A search warrant was served on the account on April 4,

26 2011.) The remaining two checks totaling $7,800.00 were cashed at the Credit Union.

27 In addition, Modlin used his personal Credit Union account (44960300) to receive

28 $355,576.36 in funds wiredjTom England by Johns. Modlin had previously wired $375,000.00 in

20


I funds from Bettinger's joint checking account (44949758) to Johns. The $375,000.00 had

2 originated from a $444,646.59 deposit made to Bettinger's joint checking account when Bettinger

3 and Mary's accounts at Bank of America and Wells Fargo Bank were closed. Once Modlin

4 received the funds back from Johns, he transferred $2,000.00 into the Credit Union accounts he

5 created for Bettinger and Mary's special needs trusts. Modlin also purchased a $170,000.00

6 insurance annuity for Bettinger and a $170,000.00 insurance annuity for Mary. Modlin kept the

7 remaining $13,576.36 ofthe wired funds in his personal account for his own use. On May 11,

8 2010, Modlin wrote two checks made payable to himselftotaling $8,000.00 from his personal

9 Credit Union account and deposited them at US Bank. Modlin spent all of the remaining funds

10 from the personal Credit Union account at Thunder Valley Casino, gas, golf outings or dining out.

II By the end of August 2010 Modlin had already taken $40,834.36 from Bettinger and

12 Mary. Modlin had also attempted to take an additional $15,000.00 from them by writing two

13 checks payable to himself from the Grantor Trust account (45161379) after the sale of the home.

14 If the Credit Union had not stopped payment on the checks and frozen the account Modlin would

15 have received $55,834.36 from Bettinger and Mary in less than five months.

16 In addition, in June 2010, two ATM transactions for $503.50 each were made at Thunder

17 Valley Casino for a total of $1,007.00 from Bettinger's joint checking account (44949758).

18 Modlin deposited $1,007.00 back into Bettinger's joint checking account on September 27,2010.

19 CONCLUSION

20 The results ofmy investigation and interviews with various witnesses lead me to believe

21 that on March 17, 2010, Modlin set in motion an estate plan for Bettinger and Mary. Modlin

22 drafted, notarized and witnessed POAs for Bettinger and Mary which gave control of all their

23 financial decisions to Johns. Modlin, while taking advantage of Johns' lack of legal acumen and

24 familiarity with American procedures, did inappropriately and illegally wrest from the control of

25 the Bettingers' funds in excess of $993,000.00 so that he and his associates, Lawrence C. Modlin

26 and Alexander Kenneth Pogue, Jr. would benefit from the funds taken from the Bettingers' and

27 the various trusts Modlin created.

28 Pogue received payment of $2,225.00 for removing, donating, or taking for his own

21


1 personal use the entire contents of the Bettingers' home. Lawrence Modlin received commissions

2 of $15,300.00 derived from the creation of questionable annuities, and immediately paid Modlin

3 $7,500.00. Modlin himself received $40,800.00 in excessive attorney and trustee fees. Modlin

4 also attempted to pay himself an additional $15,000.00 in fees. In addition, Bettinger lost

5 $19,623.64 as a result ofwire transfers Modlin made to/from Johns in England. On March 15,

6 2011, Johns voluntarily returned $2,708.26 to Bettinger by international wire to repay Bettinger

7 for some of the funds lost, but Modlin never asked Johns to account for any of the funds lost in

8 the exchange to/from England.

9 Additionally, Modlin notarized, under penalty ofpeljury, that Mary acknowledged to

10 Modlin she executed the Power of Attorney "in her authorized capacity," when based on her

11 mental status as demonstrated by the police report of the first contact, the transcription of the 911

12 call, and the medical records, Mary was clearly in no mental condition to do so. Mary suffered

13 from severe dementia and was moving to a secured facility designed to house Alzheimer's

14 disease patients the day after signing the POA. Just days before signing the POA, Mary was so

15 delusional she thought it was 1994, that Lyndon Johnson was President, that her husband had

16 been kidnapped, and that a small crippled boy was in her bed.

17 Further, the POA created by Modlin states in Article 6 Johns was not allowed to take any

18 action without Mary and/or Bettinger's consent if they were capable of giving it. Clearly,

19 Bettinger was competent for the purpose ofminding his own affairs, something that was

20 reasonably apparent to anyone interacting with him. Modlin would have known the POA was not

21 being appropriately used when he directed Johns to sign on Bettinger's behalf. Therefore, as to

22 both Mary and Bettinger, Modlin clearly knew the trusts created were done so illegally.

23 Additionally, the trusts were designed to benefit Johns, not Bettinger and Mary. The only

24 people to reap any benefit from these trusts were eventually Johns as the beneficiary, and

25 immediately Modlin himself through the collection offees for the administration of the trust,

26 Lawrence for the commissions earned on the purchase of an annuity, and Pogue for taking

27 Bettinger's personal property. Finally, the contract for attorney's fees in the amount of

28 $50,000.00 plus additional fees as required is so unconscionably and grossly unfair and

22


1 overreaching that the payment of these fees constitutes a theft.

2 Based upon records received from the Credit Union, I computed Modlin received more

3 than $40,800.00 in fees from March 2010 to November 2010. Modlin also unsuccessfully

4 attempted to pay himself an additional $15,000.00 in fees in September 2010. Modlin, as

5 Trustee, purchased two unnecessary (given Bettinger's and Mary's ages) and financially harmful

6 annuities, for $340,000.00, through his brother Lawrence which resulted in a commission to

7 Lawrence of $15,300 and a prompt reconveyance back from Lawrence to Modlin of$7,500.00.

8 While the $340,000.00 is presently invested at American National Insurance Company in

9 the form of these two annuities, these investments no longer belong to Bettinger but belong

10 instead to the two irrevocable trusts. The $170,000.00 annuity in the name of Bettinger's Special

11 Needs Trust could be cashed out with a substantial penalty and used for Bettinger's "special

12 needs," but it cannot be repaid back directly to Bettinger. In addition, Bettinger no longer has any

13 ownership or rights to the $170,000.00 annuity owned by the special needs trust of his late wife

14 Mary. Upon Mary's death the trust should have been terminated leaving all assets in the trust to

15 Johns as the beneficiary. The remaining approximately $545,000.00 of Bettinger's funds are now

16 being managed by Matt Quentmeyer at two local financial institutions. Quentmeyer is a

17 Professional Fiduciary and is Bettinger's court appointed financial conservator.

18 I believe the evidence shows that in order to support his gambling habit Delbert Joe

19 Modlin saw an opportunity with an elderly couple, where the wife had severe dementia and

20 whose only relative was a ni~ce in England. This provided an opportunity for Modlin, who had

21 been referred to the niece indirectly through his own wife, Patricia Modlin, who as a nurse at

22 Kaiser had brought the Bettingers' to the attention of the "placement agent" Shawana Heintz.

23 Heintz had referred Mary Bettinger's niece, Eleanor Johns, as well as other clients to Modlin in

24 the past and had received free legal work from Modlin in return.

25 Once Modlin had been introduced to Johns he had Bettinger and Mary each sign Powers

26 of Attorney, which notarized as well. In those notarizations Modlin certified, under penalty of

27 perjury, that Mary acknowledged to Modlin she was executing the Power of Attorney in her

28 authorized capacity---despite believing Mary had Alzheimer's disease, and despite the large

23

DECLARATION IN SUPPORT OF ARREST wARRANT

1 amount of evidence showingIvIary was completely delusional and moving into a locked

2 Alzheimer's facility the following day.

3 Once Eleanor Jolms had Power ofAttorney Modlin had Jolms give him virtually

4 unfettered authority which he used to create unnecessary and harmful trusts. Modlin made

5 hirnselfTrustee, ostensibly to safeguard assets and render the Bettingers' eligible for Medi-Cal,

6 but in reality to generate outrageous and unconscionable legal fees. He transferred his clients'

7 money around into new accounts with himself as a joint account holder or sole signatory as

8 Trustee. Modlin even went as far as to keep the ATM card issued on Bettinger's new checking

9 account in his own wallet. Modlin used the ATM card from the joint checking account to

10 withdraw funds for his personal use at Thunder Valley Casino although Modlin alleged the casino

11 withdrawals were made by accident.

12 Modlin converted some of the Bettingers' furniture to his personal use, and gave other

13 possessions oftheirs to his son-in-law and step-daughter, who he hired with Bettinger's money to

14 clear out the Bettingers' home and dispose of their effects. Modlin orchestrated the sale of the

15 Bettingers' home against the specific wishes of Bettinger. Modlin took possession of Bettinger's

16 automobile, used it as his 0Wll and attempted to transfer the vehicle into his own name. In fact,

17 although the vehicle never actually successfully transferred to Modlin's name, Modlin and

18 Patricia executed are-transfer ofthe car back into Bettinger's name shortly before Modlin

19 resigned as Trustee.

20 As a result of Delbert Joe Modlin's actions, Bettinger has lost his home and well over

21 $400,000.00. In addition, Delbert Joe Modlin has illegally enriched himself in the amount of

22 $40,800.00 in illegal attorney fees and $7,500.00 in a kick-back from his brother Lawrence on the

23 sale of the first two armuities.

24 Therefore I believe the evidence shows that Delbert Joe Modlin has committed the

25 following felony violations: (I) a violation of Penal Code section 368(d), Financial Elder Abuse,

26 (2) a violation of Penal Code section 487(a), Grand Theft, (3) a violation of Penal Code section

27 506, Embezzlement by Trustee or Attorney, (4) a violation ofPenal Code section 118, Perjury,

28 (5) a violation of Penal Code section 470(d), Corruption of Records (Falsification of

24


1 Acknowledgement by Notary), and (6) a violation ofVehicle Code section 10851(a), Unlawful

2 Taking of a Motor Vehicle.

3 The defendant is described as follows:

4 Name: Delbert Joe Modlin

5 Residence: 130 Moss Rock Court, Folsom, CA 95630

6 Date of Birth: 1-21-1951

7 Sex: Male, Race: Caucasian, Hair: Brown, Eyes: Blue, Height 5'10", Weight: 235

8 California Driver's License: N7424377

9 ClI: Hll051 096

10 I respectfully request that the Court issue a warrant for the arrest of the defendant Delbert

11 Joe Modlin for the above charges, with bail set in the scheduled amount.

12 I declare under penalty ofpeIjury pursuant to the. laws of the State of California that the

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foregoing is true and correct.

Dated: .fina II Z] 2{J1j"Iv·c'· I

\;Respectfully Submitted,

ENJAM R.B Avestigative Auditor N (Specialist)

Bureau ofMedi-Cal Fraud and Elder AbuseCA Attorney General's Department of Justice

25-----------
