STATE OF MINNESOTA, DISTRICT COURT COUNTY OF RICE THIRD JUDICIAL DISTRICT COURT FILE NO. (loc /0- 347-14 PROSECUTOR FILE NO. 33.A318.0266 State of Minnesota, (ute Aiked. vf (UZx? Plaintiff, v. Select Complaint Type Teri Ann Hauge, (dob: 09/30/1955) SUMMONS [] WARRANT dib/a Estate Resources, Inc. 1 Order of Detention 5817 Concord Avenue Edina, MN 55424 (Amended Defendant. [Tab Charge Previously Filed ‘The Complainant, being duly sworn, makes complaint to the above-named Court and states that there is probable cause to believe that the Defendant committed the following offense(s): COUNT 1 Charge: ‘Theft by Swindle (over $5,000) Minnesota Statute: -§ 609.52, subd. 2(4) & subd. 3(2) Maximum Sentence: Imprisonment of no more than ten years or payment of a fine of no more than $20,000, or both. On or about January 1, 2008 through June 30, 2008, in Rice County, State of Minnesota, Terri Ann Hauge, d/b/a Estate Resources, Inc. dob: 9/30/1955, obtained property or services of a value in excess of $5,000 from her wards/conservatees by swindling, whether by artifice, trick, device or other means. Horm Revised August 2006 (ITD SP_0339e) Page | ofCOUNT 2 Charge: Financial Exploitation of a Vulnerable Adult (over $5,000) Minnesota Statute: § 609.2335, subds. 1(1) & 3 referencing § 609.52, subd. 3(2) Maximum Sentence: Imprisonment of no more than ten years or payment of a fine of no more than $20,000, or both. On or about January 1, 2008 through June 30, 2008, in Rice County, State of Minnesota, Terri Ann Hauge, d/b/a Estate Resources, Inc. dob: 9/30/1955, in breach of a fiduciary obligation recognized elsewhere in law, or in breach of the obligations of a responsible party as defined in Minn. Stat. § 144.6501, subd. 1(d), intentionally failed to use the financial resources of her wards/conservatees, vulnerable adults, to provide food, clothing, shelter, health care, therapeutic conduct, or supervision for her wards/conservatees, and the value of the financial resources was over $5,000.00. COUNT3 Charge: ‘Theft by Swindle (over $5,000) Minnesota Statute: § 609.52, subd. 2(4) & subd. 3(2) Maximum Sentence: Imprisonment of no more than ten years or payment of a fine of no more than $20,000, or both, On or about July 1, 2008 through December 31, 2008, in Rice County, State of Minnesota, Terri ‘Amn Hauge, d/b/a Estate Resources, Inc. dob: 9/30/1955, obtained property or services of a value in excess of $5,000 from her wards/conservatees by swindling, whether by attifice, trick, device or other means. COUNT 4 Charge: Financial Exploitation of a Vulnerable Adult (over $5,000) Minnesota Statute: § 609.2335, subds. 1(1) & 3 referencing § 609.52, subd. 3(2) Maximum Sentence: Imprisonment of no more than ten years or payment of a fine of no more than $20,000, or both. On or about July 1, 2008 through December 31, 2008, in Rice County, State of Minnesota, Terri Ann Hauge, d/b/a Estate Resources, Inc. dob: 9/30/1955, in breach of a fiduciary obligation recognized elsewhere in law, or in breach of the obligations of a responsible party as defined in Minn. Stat. § 144.6501, subd. 1(@), intentionally failed to use the financial resources of het wards/conservatees, vulnerable adults, to provide food, clothing, shelter, health care, therapeutic conduct, or supervision for her wards/conservatees, and the value of the financial resources was ‘over $5,000.00. Form Revised August 2006 (ITD_SP_0339¢) Page 2 ofCOUNTS: Charge: Theft by Swindle (over $5,000) Minnesota Statute: § 609.52, subd, 2(4) & subd. 3(2) Maximum Sentence: Imprisonment of no more than ten years or payment of a fine of no more than $20,000, or both. On or about January 1, 2009 through June 30, 2009, in Rice County, State of Minnesota, Terri Ann Hauge, d/b/a Estate Resources, Inc. dob: 9/30/1955, obtained property or services of a value in excess of $5,000 from her wards/conservatees by swindling, whether by artifice, trick, device ‘or other means. COUNT 6 Charge: Financial Exploitation of a Vulnerable Adult (over $5,000) Minnesota Statute: § 609.2335, subds. 1(1) & 3 referencing § 609,52, subd. 3(2) Maximum Sentence: Imprisonment of no more than ten years or payment of a fine of no more than $20,000, or both. On or about January 1, 2009 through June 30, 2009, in Rice County, State of Minnesota, Terti Ann Hauge, dib/a Estate Resources, Inc. dob: 9/30/1955, in breach of a fiduciary obligation recognized elsewhere in law, or in breach of the obligations of a responsible party as defined in Minn, Stat. § 144.6501, subd. 1(), intentionally failed to use the financial resources of her wards/conservatees, vulnerable adults, to provide food, clothing, shelter, health care, therapeutic conduct, or supervision for her wards/conservatees, and the value of the financial resources was over $5,000.00. COUNT7 Charge: ‘Theft by Swindle (over $5,000) Minnesota Statute: § 609.52, subd, 2(4) & subd. 3(2) Maximum Sentence: Imprisonment of no more than ten years or payment of a fine of no more than $20,000, or both, On or about July 1, 2009 through December 30, 2009, in Rice County, State of Minnesota, Terri Ann Hauge, d/b/a Estate Resources, Inc. dob: 9/30/1955, obtained property or services of a value in excess of $5,000 from her wards/conservatees by swindling, whether by artifice, trick, device or other means. Form Revised August 2006 (ITD_SP_0339¢) Page 3 of 25COUNTS Charge: Financial Exploitation of a Vulnerable Adult (over $5,000.00) Minnesota Statute: § 609.2335, subds. 1(1) & 3 referencing § 609.52, subd. 3(2) Maximum Sentence: Imprisonment of no more than ten years or payment of a fine of no more than $20,000, or both, On or about July 1, 2009 through December 30, 2009, in Rice County, State of Minnesota, Terri Ann Hauge, d/b/a Estate Resources, Inc. dob: 9/30/1955, in breach of a fiduciary obligation recognized elsewhere in law, or in breach of the obligations of a responsible party as defined in Minn. Stat. § 144.6501, subd. 1(d), intentionally failed to use the financial resources of her wards/conservatees, vulnerable adults, to provide food, clothing, shelter, health care, therapeutic conduct, or supervision for her wards/conservatees, and the value of the financial resources was over $5,000.00. COUNT 9 Charge: ‘Theft by Swindle (over $5,000) Minnesota Statute: § 609.52, subd. 2(4) & subd. 3(2) Maximum Sentence: Imprisonment of no more than ten years or payment of a fine of no more than $20,000, or both. On or about February 4, 2008 through May 8, 2008, in Rice County, State of Minnesota, Terri Ann Hauge, d/b/a Estate Resources, Inc. dob: 9/30/1955, obtained property ar services of a value in excess of $5,000 from the estate of H.V. by swindling, whether by artifice, trick, device or other means. COUNT 10 Charge: Financial Exploitation of a Vulnerable Adult (over $500.00) Minnesota Statute: § 609.2335, subds. 1(1) & 3 referencing § 609.52, subd. 3(4) Maximum Sentence: Imprisonment of no more than one year or payment of a fine of no more than $3,000, or both. In that on or about October 1, 2008 through February 1, 2009, in Rice County, State of Minnesota, Terri Ann Hauge, d/b/a Estate Resources, Inc. dob: 9/30/1955, in breach of a fiduciary obligation recognized elsewhere in law, or in breach of the obligations of a responsible party as defined in Minn. Stat. § 144.6501, subd. 1(d), intentionally failed to use the financial Tesources of S.R., vulnerable adult, to provide food, clothing, shelter, health care, therapeutic conduct, or supervision for S.R., and the value of the financial resources was over $500.00. Form Revised August 2006 (ITD_SP_0339c) Page 4 of 25STATEMENT OF PROBABLE CAUSE ‘The Complainant states that the following facts establish probable cause: Your complainant, Susan Fortney Renstrom, is an investigator with the Minnesota Attomey General’s Office, currently assigned to the Medicaid Fraud Control Unit (MFCU). 1 have been an investigator with the Attomey General’s Office since 1977. I have extensive training and experience in the investigation of crimes committed against vulnerable adults, including neglect, abuse, and financial exploitation, Recently, I investigated allegations that Terry Hauge, d/b/a Estate Resources, Inc., financially exploited vulnerable adults while in her position as conservator. This investigation stems from a referral from the Rice County Attorney's Office. Subsequently, the matter was assigned to me to investigate. In conducting this investigation, I reviewed financial documentation, including bank records, cancelled checks, court records, and social services files ftom Rice County Social Services. 1 have also reviewed information from the Rice County Sheriff's Office, Faribault Police Department, and the United State Social Security Administration Office of Inspector General. Background A conservator is someone who has been given legal authority by a court to handle the financial affairs of an individual who is unable to manage his/her own finances. A guardian, however, is someone who has been given legal authority by a court to make some or all personal decisions for an individual who is unable to make his/her own decisions because of incapacity. ‘The court will appoint a conservator when it has been determined that an individual is not able to manage his/her own finances usually due to a medical condition such as a developmental disability, dementia, brain injury or stroke. ‘The conservator acts as an agent of the court. The conservator has a fiduciary responsibility to conserve and manage the protected person’s estate and is accountable to the court for management of the estate. A conservator and a guardian only have the powers and duties granted by the court, The conservator may or may not be given the power over the protected person to: pay charges for care and support of the protected person and dependents; take control of estate (financial assets); collect and manage assets; pay debts; approve contracts; apply for governmental benefits; revoke power of attomey or void financial transactions made prior to the establishment of the conservatorship. A guardian may be or may not be granted the responsibility to determine where the ward lives, provide for the ward’s comfort and maintenance needs, take care of the ward’s personal property, make medical or other care decisions, approve contracts, exercise supervisory authority over the ward, and apply for government benefits for the ward. After appointment, a conservator is required to file with the court an inventory of the protected person’s assets. Every year thereafter, the conservator files an accounting to the court Form Revised August 2096 (ITD_SP_0339e) Page 5 of 25Which lists all of the money that has come into the estate and all the money that has been paid out of the estate. Verifications of assets and expenditures are also to be filed. The payment of “personal needs” is outlined in Minn, Stat, §256B.35, and requires the payment of a minimum of $45, in welfare allowances for clothing and personal needs for individuals receiving medical assistance while residing in any skilled nursing home, intermediate care facility, or medical institution, including recipients of Supplemental Security Income, Estate Resources, Inc. (“Estate Resources”) filed as a Domestic Corporation with the Minnesota Secretary of State on August 30, 1991, naming Terri A. Hauge (“HAUGE”) and T J Larpenteur (“Larpenteur”) as the agents. The primary business address for Estate Resources listed on the Minnesota Secretary of State web page is 7400 Metro Blvd. #100, Edina, MN 55439, On December 14, 2006, HAUGE signed a contract on behalf of Estate Resources with Rice County Social Services (“RCSS”) to provide conservatorship and/or guardianship services as requested by RCSS. The contract states in part, that Estate Resources would provide an average of three hours of service per clienvward per month after the initial month’s service. If it ‘was anticipated by Estate Resources that this average would be exceeded, authorization to exceed the three hours was required from the client's/ward’s RCSS case manager. ‘Compensation to Estate Resources for services to RCSS clients/wards was agreed to be at the rate of $56.65 an hour. Under the terms of the contract, Estate Resources was required to submit an invoice and request for payment on an invoice form acceptable to the county. The invoice was required to be submitted within 15 days following the last day of each calendar month in which services were provided. HAUGE was required to provide the following details in the invoice submitted to RCSS: the date services were provided, a general description of the services provided, and the name of the client/ward receiving the services. HAUGE wrote a letter to RCSS dated May 16, 2007 stating that it was her intention to end her association with Estate Resources, and expressed her intent to establish a new corporation to provide guardianship and conservatorship services to Rice County clients now served by Estate Resources. While HAUGE continued to operate as Estate Resources thereafter, HAUGE was the only person from Estate Resources to appear in Rice County on behalf of Estate Resources with respect to the wards/conservators referenced in this complaint. Between 2006 to 2009, HAUGE was one of RCSS’s primary conservators/guardians in Rice County. Between 2006 to 2009, HAUGE had anywhere from 50 to 80 clients/wards, both RCSS clients/wards end private pay clients/wards, for whom she had been appointed guardian/conservator in Rice County. HAUGE submitted invoices to RCSS for services provided to approximately 60 clients/wards during the time period reflected in this complaint. ‘An analysis of the billings HAUGE provided to RCSS on ot about August 5, 2010, reflects a pattern of billing the majority of RCSS clients/wards for two to four hours of “monthly financial services” on the first of every month. From October 2007 to December 2009, HAUGE billed the 60 RCSS clients a total of from 50 hours to 130.67 hours on the Ist day of each month. Invoices for services to additional clients are yet to be presented to RCSS. Form Revised August 2006 (FTD_SP_0339¢) Page 6 of 25Some time after December 14, 2006 and before July 7, 2009, HAUGE and RCSS Director Mark Shaw (“Shaw”) had a conversation about HAUGE billing clients directly for services and obtaining payment from their funds “when, in our discretion, they could afford it.” This conversation was never formally documented as an amendment to the contract. In response to issues with HAUGE billing certain RCSS clients/wards, Shaw sent a letter to HAUGE dated July 7, 2009 in which he instructed her to cease and desist billing RCSS clients and obtaining payments for her services from their funds. HAUGE acknowledged having received this letter in ‘July 2009 in an email she sent to several parties on February 12, 2010. Investigation I reviewed records, including bank records, court records and social services records of select wards of HAUGE d/b/a Estate Resources. Below are my findings. WARD HAUGE d/b/a Estate Resources was appointed G.P.’s (initials are used to protect ward's identity) emergency conservator and guardian by a court order filed on or about December 17, 2007, and guardian and conservator by court order on or about March 27, 2008, HAUGE remained guardian/conservator until the appointment of Alternative Resolutions, Inc. on or about September 23, 2009. When HAUGE was guardian/conservator, G.P.’s average monthly income from Social Security was approximately $650.00. On July 2, 2008, G.P. received a back payment from Social Security totaling $21,250.00, which was directly deposited into a Wells Fargo account. G.P. resided at Greenvale Place, a subsidized housing building, with a monthly rent obligation of $212.00. G.P. received between 4 to 8 checks of $50.00 to $75,00 a month for personal needs from HAUGE. HAUGE opened two conservatorship bank accounts for G.P., with the first at Wells Fargo on or about February 19, 2008 and for an unknown reason, a second account at Bremer Bank on or about October 2, 2008. The second account at Bremer was opened with a check from the Wells Fargo account in the amount of $12,149.20. Both accounts were closed in October 2009. Between the two accounts, HAUGE withdrew $20,397.50 not for the benefit of G.P., and incurred overdraft fees and non-sufficient funds (“NSF”) fees of $343.99. HAUGE's notable withdrawals are as follows: Date of | Check # ] Description Amount [Balance | Comment Transaction after ‘Wells Fargo Wiarawal, 3/11/08 __|2004__| WF - Estate Resources | $200.00 [$199.21 ___| Endorsed Estate Resources T3108 2030__| WF -Estate Resources | $1,179.48 | $21,373.29 | Endorsed Estate Resources 7/15/08 __|2006__ | WF - Estate Resources | $8,146.59 | $12,664.70 | Endorsed Estate Resources 11/13/08 | 2090) WF - Estate Resources | $4,165.15 | -$2,342.23 | Endorsed Estate Resources resulted in Return check fee resulting in overdraft fee of $35 11/14/08 [2091 | WF - Estate Resources [$700.00 __| $1,037.92 _| Endorsed Estate Resources Porm Revised August 2006 (ITD_SP_0339e) Page 7 of 2512/2708 | 2094" | WF - Esiate Resources [$500.00 | $411.63 | Endorsed Folate Resources 1229108 [2113 | WF - Estate Resources | $400,00 | -$181.23 __| Endorsed Estate Resources Resulted in overdraft fee of $35 479 [2185 | WF- CASH $250.00 | $105.16 | Endorsed Terry Hauge S/ITO9 WE - Withdrawal at [$250.00 | $247.16 | Signed Terry Hauge branch T06I08 [95 B-Eslate Resources | $694.00 | $11,455.20 | Signed Temi Hauge endorsed Estate Resources Toes [98 B-Estate Resources | $1,694.12 | $9,507.58 | Signed Terri Hauge - no endorsement 1022/08" [100 | B- Estate Resources| $1,811.16 | $6,637.05 | Signed Temi Hauge - Endorsed Estate Resources TIATIO8” [2534 | B-Estaie Resources | $4,165.15 | $2471.90 | Signed Teri Hauge, Endorsed Deposit Onl; 871009 [2377 B-CASH $125.00 — | $144.64 | Endorsed Terri Hauge - not signed Between September 25, 2009 to October 1, 2009, several online transfers occurred between the bank accounts of G.P and an account held by Estate Resources. The net result of the transfers back and forth resulted in a loss to G.P. of $715.00. Additionally, $300.00 was transferred online from G.P. to J.W.’s account, resulting in a loss to G.P, of $300.00. Invoices provided by HAUGE to RCSS for services provided to G.P. between December 1, 2007, and December 1, 2009, reflect billings that range from 2 to 4 hours on the Ist of every month, totaling 57.5 hours. From December 1, 2007 through December 31, 2009 (25 months), under the terms of the contract limiting billing to 3 hours a month at $56.65 an hour, HAUGE could have billed up to $4,248.75 to RCSS if she had actually provided services. However, HAUGE removed $21,307.49 from G.P.’s account. Additionally, HAUGE billed at a rate of $85.00 an hour on invoices provided to RCSS rather than the contract rate of $56.65 during this time, Due to the increased rate and billing more than 3 hours a month, HAUGEs billing invoice submitted to RCSS on August 4, 2010, states that she is entitled to $9,208.35 for guardianship/conservator service fees. HAUGE failed to fill out G.P.’s financial application for reduced rent, mailed to her on March 3, 2009, which resulted in G.P.’s rent increasing from $212.00 per month to $566.00 per month although HAUGE continued to pay rent, on behalf of G.P,, in the amount of $212.00 per month, In addition, HAUGE also failed to complete G.P.’s annual renewal program form for Medical Assistance and Minnesota Supplemental Assistance, Failure to complete and return the renewal forms resulted in G.P. being terminated from M.A. and M.S.A. and leaving GP., through HAUGE, totally responsible for the full costs of his food, medical care, and shelter. Hauge conducted a limited number of transactions on this account; failed to complete or provide the necessary paperwork to continue G.P.’s benefits; billed higher than the contracted Tate of $56.65; and billed her conservatee/wards for more than 24 hours on the Ist of every Form Revised August 2006 (ITD_SP_0339e) Page 8 of 25,