Sold investments with no benefit, misrepresented qualifications
SEATTLE — Attorney General Bob Ferguson has filed a lawsuit against a Snohomish couple who scammed elderly Washington residents applying for Medicaid and veterans benefits. The Attorney General’s Office alleges that the Cooks’ actions violated the state Consumer Protection Act.
Peter and Carolyn Cook, doing business as C&C Consulting, claim to help their clients navigate applications for state and federal need-based programs — namely, Medicaid and U.S. Veterans Administration Aid and Attendance — to obtain necessary care.
The Cooks had no special training to provide Medicaid or Aid and Attendance consulting services, and in fact broke the law by offering this Aid and Attendance consulting for a fee without Veterans Administration accreditation. Peter Cook also was involved in an elder fraud scheme in California, and pleaded guilty to a criminal charge of filing a false income tax return.
“I will not tolerate scammers that prey on the elderly and those who served our country,” Ferguson said. “I intend to hold Peter and Carolyn Cook accountable for their unlawful actions that hurt Washington seniors.”
Aid and Attendance is a VA program that offers an added pension benefit to vets or surviving spouses who need home care, nursing home care, or are blind. In addition to service requirements, the beneficiary’s income must be less than the annual pension limit set by Congress.
To reach those limits, or limits set by Medicaid, clients looked to C&C Consulting for advice on gifting, the transfer of assets, and the application of the state and federal law to the their individual situation.
Every C&C Consulting contract stated that Medicaid planning was a complex area of the law and that it is essential to obtain legal advice. Under the terms of the C&C contract, C&C was required to provide and pay for legal counsel to obtain this advice. However, in the course of the Attorney General’s investigation, C&C admitted that this was a misrepresentation — C&C never paid for or consulted with an attorney for its clients.
Additionally, in the course of the Attorney General’s investigation, C&C Consulting at first denied that they had provided individual advice on VA Aid and Attendance that would require that they be accredited. When confronted with C&C Consulting’s own documents, Peter Cook later admitted under oath that he had in fact both provided individual VA Aid and Attendance advice and had charged a fee for it, which are both violations of the law.
The Cooks charged fees from $2,500 to $5,900 to more than 75 clients since 2008, at least 10 of whom were veterans. Many Medicaid and VA Aid and Attendance applications it submitted for clients were either delayed or denied.
One client, an elderly woman from Kent, paid C&C $2,500 to help her obtain care for her Air Force-veteran husband after their insurance benefits ran out. He was in a care center, and his doctors said he couldn’t come home.
C&C told her that her husband would qualify for both Aid and Attendance and Medicaid. Based on that advice, she entered into a care contract, drafted by C&C, that said part of the costs would be paid for by VA benefits.
C&C completed the VA application, which was denied. Eventually, the woman went to the Veterans of Foreign Wars about her case and was told that she and her husband had too much income to qualify for Aid and Attendance. Anyone knowledgeable about the program, such as the attorney C&C was contractually obligated to provide but did not, should have known their income would not qualify for this assistance.
When she later sought C&C’s help in applying for Medicaid, the Cooks asked for an additional $2,400. She refused to pay.
An Everett woman with power of attorney for her elderly parents had a similar experience. Her mother was nearly 90 years old, in a wheelchair and suffering from dementia and other health problems. Her father was in his mid-80s, using a walker and also suffering from dementia.
She moved them to a care facility, but as their assets dwindled, she realized she needed to move them to a new facility that accepted Medicaid. She paid C&C $4,900 to help with the Medicaid application, and the company claimed it could get benefits for both parents.
Instead, she was overwhelmed by a cycle of applications, appeals and denials. The application was usually rejected because her parents had too many assets. Again, her agreement specified that an attorney would be hired to help, and none was. An attorney would have known the Medicaid rules.
Her mother eventually received Medicaid benefits; her father did not. To keep helping her father, C&C asked for another $2,900. The Everett victim stopped using their services at that point.
C&C also sold several clients annuities that gave them no return on their investment — or worse, actually cost them money. The Cooks earned a commission on these sales.
The company sold an 82-year-old Bellevue man two 5-year, single-premium immediate annuities for a total of $339,198.01. Under these two annuity contracts, the annuity beneficiary was to be paid 60 equal monthly payments that equaled $339,198. After 5 years, the beneficiary would in fact receive a penny less than what the Bellevue man paid when he bought the annuities. The rate of return was listed as 0 percent but actually was a negative return. Carolyn Cook was paid a commission of $10,175.94 for selling these two annuities.
These annuities were not approved, as required, by the state Insurance Commissioner. Peter Cook was not licensed to sell insurance products of any kind.
The state has accused the Cooks of violating the Consumer Protection Act. The state is seeking penalties in the amount of $2,000 per violation, restitution for consumers, and injunctive relief to prevent further violations of the Consumer Protection Act.
In response to scams targeting veterans’ pensions, Attorney General Ferguson introduced agency-request legislation — the Pension Poacher Prevention Act — which was passed by the Legislature and signed into law by Governor Inslee in March of last year.
To file a consumer complaint, visit www.atg.wa.gov and click the “Consumer Complaint” button, or call 1-800-551-4636 between 10 a.m. and 3 p.m., Monday through Friday.
The Office of the Attorney General is the chief legal office for the state of Washington with attorneys and staff in 27 divisions across the state providing legal services to roughly 200 state agencies, boards and commissions. Attorney General Bob Ferguson is working hard to protect consumers and seniors against fraud, keep our communities safe, protect our environment and stand up for our veterans. Visit www.atg.wa.gov to learn more.
Peter Lavallee, Communications Director, (360) 586-0725; PeterL@atg.wa.gov