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Scams & Fraud
by Sean Gardiner, AARP Bulletin, April 29, 2009
When stories of the desperate living conditions that New York City’s leading socialite and philanthropist, Brooke Astor, was being forced to endure first surfaced in the press, details of physical abuse and neglect caused the most shock and anger.
Astor’s son, Anthony Marshall, it was reported, refused to buy his mother, then 104 and once one of the richest and most stylish women in the country, new clothes, forcing her to wear a tattered nightgown and live on a smelly couch. Her favorite expensive makeup and face creams were replaced by drugstore brands and Vaseline. Her beloved dachshunds, Boysie and Girlsie, were sequestered from her in a pantry because her son and daughter-in-law didn’t want them to destroy the furniture they stood to inherit.
Three years removed from the sensational headlines, Marshall’s trial on charges of defrauding his mother’s estate, which started April 27 in Manhattan Supreme Court, has thus far focused on a more calculated, much less emotional form of elder abuse—financial fraud.
For 3 1/2 hours on the opening day, prosecutor Elizabeth Loewy, who heads the Manhattan District Attorney’s Office Elder Abuse Program, walked jurors through a trail of will changes and property transfers and alleged forgeries and secret commission deals. Loewy outlined what she said was Marshall’s “systematic” scheme to take advantage of his mother’s failing mental capabilities and divert tens of millions of dollars she earmarked for charity, what she hoped would live on as her “legacy,” into his own pockets.
“What is this case about?” Loewy asked the jury. “This case is about greed.”
Today, defense attorney Fred Hafetz offered a different take on why Marshall’s mother, who he said was suffering from Alzheimer’s disease but far from being a “vegetable,” changed her will the way she did.
“It’s as simple as a mother decides to leave her money to her son,” Hafetz said.
Hafetz painted Marshall, 84, as a “dutiful and loyal son” who years after earning a Purple Heart in World War II as a Marine cut short his subsequent diplomatic career to return to New York in the late 1970s and help run his mother’s empire. Years after all her “big shot” socialite friends stopped paying her regular visits, “the person who was there for her, her rock and her support, was her son,” Hafetz said.
Marshall and his lawyer friend Francis X. Morrissey Jr., 66, are charged with multiple counts of conspiracy and scheming to defraud. Marshall, who is also charged with grand larceny, faces up to 25 years in prison if convicted. Morrissey is also charged with forgery. The trial is expected to take up to two months and may include celebrity witnesses like Henry Kissinger and Barbara Walters.
Loewy started off the trial saying Brooke Astor, who died in August 2007 at age 105, was “the grande dame of New York,” who will always be “remembered for her philanthropy and her spirit and her love of all things New York.” Through the foundation established by her real estate mogul husband, Vincent Astor, over the years she gave away nearly $200 million to such charities and institutions as the New York Public Library and Metropolitan Museum of Art.
Beginning of the End
Although Astor remained incredibly active well into her 90s—hosting galas, sitting on boards, passing summers in Maine and winters in Palm Beach, Fla., even doing yoga—she told friends as early as 1997 that she was “losing it” mentally or going “gaga,” in her own words.
And Marshall knew it, Loewy said. He also knew that doctors had diagnosed Astor as suffering from dementia and Alzheimer’s as early as 2000, the prosecutor said. To show that, she read from letters Marshall exchanged with his mother’s physicians that year, quoting Marshall as saying that his mother was growing more confused and told him, “’I don’t know what’s wrong with me. It would be better to die than to go on feeling this way.”
The prosecutor said Astor had long planned to leave Marshall quite well off, willing him her 14-room Park Avenue duplex, a 64-acre estate in Westchester County, N.Y., another summer estate in Maine and a “small” $4 million Manhattan apartment. In addition to the properties, worth a total of $40 million, Astor’s will as of early 2002 left Marshall $5 million in cash and a guaranteed annual income worth millions more from a trust fund.
“But that wasn’t good enough for Anthony Marshall,” said Loewy.
Transfer of Wealth
Brooke Astor planned to eventually leave most of two family trusts worth approximately $120 million to charity. Instead of adhering to his mother’s wishes, Marshall enlisted Morrissey’s help to systematically drain his mother’s estate and “line their own pockets” with money earmarked for charity, Loewy said.
In 2003, with the help of her mother’s longtime attorney, Henry “Terry” Christensen, who is not being charged in the case, Marshall obtained signed authorization from his mother approving a $5 million cash gift to himself. Marshall and Christensen then orchestrated a mother-to-son deed transfer of her $5.5 million summer estate in Northeast Harbor, Maine. Marshall quietly transferred the property to his wife, Charlene, in defiance of Astor’s wishes that her grandson Philip, who is Marshall’s son, inherit the house, Loewy said.
Although Astor no longer owned the Maine estate and a broken hip had prevented her from even traveling there anymore, Marshall, as his mother’s official financial adviser, charged about $600,000 in costs to maintain and update the estate from his mother’s funds, Loewy said.
During 2003, Loewy said, Marshall had falsely “convinced his mother she was running out of money” and tricked her into selling one of her most beloved paintings, Childe Hassam's Flags, Fifth Avenue, to a gallery for $10 million while secretly cutting a side deal to receive a $2 million commission. The gallery resold the painting about a year later for $29 million, Loewy said.
As 2003 closed out, “Marshall set his sights much higher for the next grab at his mother’s money,” the prosecutor said.
'What Did I Do?'
On Jan. 12, 2004, Marshall, Morrissey and two other attorneys “literally pulled Mrs. Astor out of the arms of one of her nurses,” at her Park Avenue apartment and made her sign an amended will, Loewy said.
Afterward, Loewy said, a befuddled Astor, whose Alzheimer’s now included episodes of hallucinations, asked her nurse, “Who are those men? What did I do?” For weeks after, Astor had nightmares about “men in suits coming to get her,” Loewy said.
That will amendment concerned a $60 million trust fund that Astor had earmarked to eventually be donated to charities. Instead, her son now received that money “outright.”
The will change also granted Marshall full power of attorney over his mother’s affairs. Motivated by a “preoccupation to get money for Charlene” and her children, Marshall “continued to find ways to take advantage of [Astor’s] diminishing mental capabilities,” Loewy said.
Even though he was spending only a few hours a week as his mother’s financial adviser, in 2005 Marshall approved a $900,000 raise for himself, up to $1.4 million a year. Then he ordered his mother’s accountants to make it retroactive to 2004. As soon as he received the $900,000 check covering the pay bump, Marshall bought a 55-foot yacht with it, Loewy said. He then arranged so his boat captain’s $52,000-a-year salary would be paid by his mother’s funds.
At the same time that Loewy said Marshall was living it up on his mother’s money, he was cutting back on her expenses, closing down her Holly Hill estate, despite the fact that Astor had made it clear she wanted to die there, and firing the estate’s staff. He also fired her longtime “beloved” chauffeur and refused to pay for even relatively inexpensive items like air purifiers.
“She loved her son, but she went through great lengths throughout her life to protect her charities and protect her legacy,” Loewy said. “That should have been worth something.”
Of Her Own Free Will
When Hafetz, Marshall’s lawyer, got his chance to reply today, he said that while Astor was suffering from dementia and Alzheimer’s, much of the time she was lucid.
“Someone with dementia, someone with Alzheimer’s, is still a human being. … They do not forfeit their rights because they’re elderly and they have Alzheimer’s to make their own decisions,” the lawyer said.
Hafetz said the critical issue is whether Astor knowingly and willingly made the Jan. 12, 2004, changes to her will, bequeathing $60 million and sole power of attorney to her son. If she did, then all the money and property that the district attorney’s office is accusing Marshall of stealing was either essentially his or within his right to do with it as he saw fit. Hafetz said two leading trust and estate lawyers, Warren Whitaker, who executed the Jan. 12, 2004, will amendments, and Christensen, who executed another will change for Astor three weeks prior to that, will both testify she was capable of making decisions.
The defense attorney told the jurors that Astor “changed wills like some people changed socks”—33 times dating back to 1960—and it wasn’t unusual for her to make a series of will changes in quick succession. For most of her life, Astor had planned to leave her money to her only child. That plan only changed in 1993 when Marshall met his current wife, Charlene, whom Astor disliked and didn’t want to inherit any Astor money. But as her time neared, Hafetz said, Astor realized that it was important to do right by her loyal son.
“Like a tide flowing in at the end, she decided that’s where she wanted her money to stay,” Hafetz said.
Sean Gardiner is a veteran journalist who most recently covered the criminal justice system for the Village Voice.
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