th circuit declares court appointed guardianship a racketeering enterprise

Juliette Fairley
Draft · 3 min read
(Jan. 16, 2020) A trio of federal appellate justices affirmed a lower district court decision to deny a probate officer’s request for an award of attorney fees and declared that court appointed guardianship can become a corrupted enterprise.
The 6th Circuit Court of Appeals upheld the Ohio Northern District’s decision involving a physician named Dr. Mehdi Saghafi, 89, and his wife Mrs. Fourough Bakhtiar [Saghafi], 85, who was declared incompetent due to dementia and was placed under the control of Guardian of the Estate Zachary Simonoff by a local probate judge. Simonoff was seeking reimbursement of his legal fees but the honorable federal appellate justices Jeffrey Stuart Sutton, Deborah L. Cook and Amul Thapar denied his request.
Instead, the Justices stated in their ruling that they are unconvinced of Probate Court Officer Simonoff’s claim that “[Dr. Mehdi] Saghafi’s legal positions were frivolous.”
The physician husband challenged an order requiring him to pay to Simonoff, the guardian, some $3 million in pension proceeds held at Franklin Templeton mutual fund company after a divorce was imposed upon him by the courtenabling the division of some $8 million in assets.
“The 6th Circuit ruling confirmed my client’s right to challenge a court order, which may have been obtained through abuses of judicial processes,” said Dr. Saghafi’s attorney Chuck Longo in a telephone interview. “The decision will have far reaching negative implications for guardians and lawyers who improperly use guardianships as criminal enterprises to defraud the elderly and incompetent, which is a violation of the RICO statute.”
The Racketeer Influenced and Corrupt Organizations (RICO) Act was enacted by section 901(a) of the Organized Crime Control Act in 1970 and allows extended criminal penalties to be charged as well as civil causes of action for conduct performed as part of an ongoing criminal organization.
It was the Honorable Lorain County Probate Judge James T. Walther who appointed Simonoff as Mrs. Bakhtiar [Saghafi]’s guardian of the estate.
“Whenever you defy a facially valid court order, you have some explaining to do,” wrote the panel of federal appellate judges in their decision. “But Saghafi does have an explanation. He maintains that the divorce proceedings were a fraud on the court, a sham. And Ohio-law authorities suggest that a judgment procured by fraud may be void.”
Simonoff sued Dr. Saghafi in federal court and Dr. Saghafi filed a counterclaim, alleging violations of the federal RICO Act.
“Simonoff argues the RICO counterclaim was unreasonable because (he says) a guardianship is not an “enterprise” under the RICO Act,” stated the panel of three judges. “But Simonoff fails to explain why an association that does its dirty work through a guardianship cannot be an enterprise. If anything, the Act’s expansive definition suggests the opposite. Right or wrong, Saghafi’s legal theory was not frivolous.”
At the core of the legal dispute is Dr. Saghafi’s estranged daughter Jaleh Presutto, who was removed and re-appointed as guardian on multiple occasions by Judge Walther and in May 2018 pleaded guilty to multiple felonies for defrauding the Amherst school district in Amherst, Ohio.
“To some, this might mark [Saghafi] as a sore loser bent on delay and vexation but others might see the distress and indignation of an elderly man who believed — maybe rightly, maybe wrongly, but at least sincerely — that his daughter and her lawyers had teamed up to loot him by taking ruthless advantage of an old woman’s dementia and duping the Ohio courts,” state the justices. “The district court saw the latter.”
The Saghafi litigation is one among many lawsuits filed across the country that are alleging fraud in court-appointed adult guardianships of the elderly and people with disabilities, which are designed to help them manage their lives. Accusations include neglect, elder abuse, isolation, cruelty and financial exploitation.
But the growing issue hasn’t escaped the watchful eye of politicians nationwide.
A bill that will increase protections for seniors under guardianship passed a Florida House subcommittee unanimously last week. The companion bills HB 709 and SB 994 would require permission for court appointed guardians to sign “do not resuscitate” orders, mandate that guardians report detailed information regarding payments and restrict petitioners who want to be the court appointed guardian of senior citizen or person with disabilities to relatives.
