Lawsuit alleges former CAPA employees cheated clients

Posted: Friday, August 30, 2002

FAIRBANKS (AP) -- A lawsuit has been filed that alleges former employees of a private agency for people who can't manage their own affairs cheated clients out of money.

The lawsuit filed in Fairbanks Superior Court on Aug. 16 represents the first legal action filed on the behalf of wards of the former Fairbanks-based nonprofit Community Advocacy Project of Alaska.

CAPA started in 1989 as Alaska's first private guardianship firm.

''If these acts occurred the way we believe they occurred, it's an outrageous abuse of authority and a breach of trust,'' said Thomas Van Flein, the lawyer representing Larry Compton, who was appointed as the bankruptcy trustee for the former CAPA wards and creditors when the agency filed for Chapter 7 bankruptcy in May.

The suit alleges that CAPA employees stole money from wards' accounts, charged excessive fees, misappropriated money that wards had entrusted to them, sought unreasonably high compensation for themselves, friends and family members, and sold property and other items to wards at prices far above market value.

The suit asks that wards receive three times the amount of their financial losses. It also seeks unspecified punitive damages as well as interest and attorney fees.

Until its bankruptcy, CAPA was appointed by the court to handle financial affairs, health care, living arrangements and other matters for adults incapacitated by advanced dementia, mental illness, retardation, brain injuries or other conditions.

Candy Carroll denied that any of the allegations listed in the lawsuit occurred after she became director in August 2000. She blames most of the agency's trouble on previous directors. She accused former CAPA head Mark Layman in court hearings of embezzling hundreds of thousands of dollars from clients and the corporation. Layman has denied stealing money.

But Anchorage Superior Court Judge Elaine Andrews found in May that problems extended into Carroll's tenure.

Andrews found that under Carroll, the nonprofit corporation's structure was a ''sham.'' The board consisted of Carroll's daughter and son-in-law, who live out of state, and a son who lives with her.

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