Eric Nalder / San Francisco Chronicle – 2012-06-18 01:56:43

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2012/06/17/MNQ51P1OP6.DTL

SAN FRANCISCO (June 17, 2012) — If Sabrina Masangcay could speak for herself, she might express horror about the repeated mishandling of her money by the US Department of Veterans Affairs.

The agency designated a dishonest uncle to receive her VA benefit checks despite a red flag, his bankruptcy filing back in 1997. For years under the noses of VA bureaucrats in Oakland, Ruben Yumang Masangcay deceived family members and stole Sabrina’s money, records show.

When the agency realized it, after six years of theft, the uncle was prosecuted and jailed, although that also took years. A judge ordered him to pay the money back starting in 2005, at a rate of $500 a month, and to curb his gambling habit.

Restitution Funds Lost
But Sabrina’s $15,000 in restitution got lost in an “unclaimed fund” at the U.S. District Court in San Francisco. It was discovered in January and released to her family. Not the fault of the court, said court clerk Richard Wieking. Once again it was the VA’s fault, records show.

Sabrina, 51, lives in a group home in Castro Valley. She can’t speak for herself because of “chronic schizophrenia and mental retardation,” court records show.

California has almost 11,000 mentally disabled veterans and family members who, like Sabrina, are assigned VA fiduciaries to handle their finances. But a Hearst examination of criminal court records nationwide shows California may be a dead zone for VA oversight of the money.

The only other California prosecutions that Hearst could find in VA inspector general records and the courts were not the result of agency auditing. A thieving lawyer and VA fiduciary were exposed during a newspaper investigation into state court-appointed guardians in the Los Angeles area.

In San Francisco in 2004, accounting coordinator Jennifer K. Bustos and friend Cheryll Del Rosario were exposed by a private auditor after they skimmed money from at least one veteran at Walden House, a group home in the Haight, said Vitka Eisen, chief executive officer of the Haight-Ashbury Free Clinic and Walden House.

But the Sabrina Masangcay case is perhaps the state’s most egregious because she was victimized twice.

After the uncle was removed as fiduciary, Sabrina’s financial affairs were shuffled from a kindly sister to a brother and then to an aunt because of deaths. The VA is by law supposed to visit the new fiduciaries and regularly examine the accountings.

Sabrina has been the VA’s financial ward since she was 10, when her Air Force father and her mother were killed in a service-related car crash in Germany. VA and Social Security benefits were granted to her. The uncle became her guardian.

As an adult, Sabrina was deemed a “helpless adult child.” The uncle continued to receive the VA benefits, and between 1995 and 2001 he got the VA to deposit the money electronically into his savings account.

Social Security was handled differently. As an adult, Sabrina’s Social Security benefits went to a responsible sister, Valerie Masangcay, not to the uncle, records show.

Court records show the uncle hoodwinked the VA into giving him Sabrina’s checks even when she was in the physical custody of her sister Valerie. The sister was unaware that Sabrina was eligible for VA benefits, court records say.

The uncle was tripped up in 2001 when the VA in Oakland did a long-overdue review of its “adult child” program. Bottom line: The uncle was never properly appointed as Sabrina’s fiduciary, and he didn’t even have contact with her. Yet $49,000 disappeared.
Brother’s role

The VA scrambled for months trying to visit the uncle for the first time, according to a VA investigator’s report. Sabrina finally started receiving her VA checks.

But then the restitution money got “lost.”

Valerie Masangcay died in 2002 – a “huge loss,” said Shelly Luchini, who has worked with Sabrina for years as program coordinator for a recreation center in Hayward.

Sabrina’s brother, Chet Masangcay, became fiduciary. He had been receiving the court-ordered restitution money since 2005, but he died in April 2007. The uncle kept paying the court until he died in December 2010.

Last year, Sabrina’s aunt, Cora Masangcay Taylor, who succeeded the dead brother as fiduciary, discovered uncashed restitution checks in his belongings, according to court records. She hired an attorney who in January discovered the unclaimed stash in federal court and retrieved it by court order in March. Attorney Carlo Rolando said family members don’t want to comment.

“Maybe Sabrina can now get some new shoes,” Luchini said.

To view an interactive map with details and locations of more incidents nationwide, go here.

Eric Nalder is an investigative reporter for Hearst Newspapers. E-mail: ericnalder@hearst.com

(c) 2012 Hearst Communications Inc.

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