Profiting by Preying on the Poor

They are people with little who are left with less.

Destitute and disabled, they are swept off skid row by poverty profiteers who offer a seemingly heaven-sent answer to the hell of homelessness: Good food and a fine roof in exchange for any government money they may be receiving.

But many have learned that there is a heavy hidden price.

Mark Lee Allen ended up in a tiny decrepit house on a barren slab of desert northeast of Los Angeles crammed with 13 others who had been “recruited” off the streets. The carpet teemed with lice. The refrigerator stood bare. The air reeked of urine. Tuberculosis lurked. And there was the constant buzzing of swarming horseflies as they ricocheted off the inside of the shattered window panes as if trying to escape.

“No food, no beds, no phone, nothing,” said Allen, 49.

Until recently, he and the others in the decaying house were what authorities call victims of a clandestine network of unlicensed board-and-care operators targeting the poor.

It is a perfect crime in part because it preys on perfect victims--”among the most voiceless in the population,” in the words of Los Angeles Deputy City Atty. P. Greg Parham.

Some cannot walk. Some hear voices. Most rely on medication to maintain what little order they have in their lives. Perhaps most disturbing, talk to many of them and you realize that their minds are not unlike those of an aging grandparent from whom the gathering years have exacted a toll. Their memories and sense of dignity are intact. They know people shouldn’t have to live like this.

Exactly how many Mark Lee Allens are out there remains unknown--certainly hundreds in the Los Angeles area alone, investigators say, probably many more. And the problem is getting worse, they say, as spending on government social programs shrinks and homelessness rises.

“There aren’t housing opportunities that the very, very poor can afford,” said USC professor Jennifer Wolch, the author of two books on homelessness. “The whole private, unlicensed . . . homes industry has become more and more predatory.”

In 1991, authorities knew of four people operating unlicensed board-and-care homes in the region. Today, there are at least two dozen and “we keep getting new names to check out,” said one state investigator.

Competition has become so fierce that six disabled senior citizens recently were abducted from two boarding facilities, authorities said, and taken to live in an unlicensed home under the threat of violence. Kidnapping charges have been filed against two people connected to an unlicensed facility on West 36th Street in Los Angeles.

In the past year, scores of victims have come forward after daring escapes or successful raids. They have told of being physically abused, drugged, kept up to eight to a room, poorly fed, barely clothed and deprived of Medi-Cal cards and spending money from their government checks.

When investigators recently visited a single-family home on Harvard Avenue in Los Angeles, they found four sickly residents stuffed into a dingy bedroom. The windows had been broken out, allowing birds to make their way in, leaving droppings on the carpet.

“It’s a shame,” said Los Angeles Police Det. Troy Bybee. “These people are being victimized big-time.”

Dozens of people have filed written complaints with the Social Security Administration--one of several government agencies charged with curbing such abuses but which has suffered substantial cutbacks in the last decade.

From Ollie Beeson, age 72: “A black male approached me outside of the [mission in downtown Los Angeles] and told me he could find a place for me and my grandchild to stay.

“He took me and my granddaughter to a large house.

“I decided to leave because the people there smoked crack, and we were not fed very well. When I tried to leave they would not let me go. They used to lock the door.

“These people were hustling all over Los Angeles and picking up people and taking them to different houses.”

From Leon Grant, 29, who said he was shuttled to at least four homes during the past five years: “The staff would give us medication for crazy people, like the kind they give to people in state institutions. I am not a crazy person, but they gave me and others medicines like Thorazine, Pelixilan, Kolonopin, Cogentin, Haldol, phenobarbital and Mellaril.

“I didn’t want to take medication for psychotics, so I would pretend to take it and spit it out later.”

From William N. Cash, age 62: “I was hit because I didn’t want to [endorse] my check.

“I tried to escape two or three times, and every time I was taken back. I was told that if I left the place I would not live to tell about it. There’s several guys out there in the same house that the same thing is happening to them; they’re afraid to leave the place.

“Jail would be an improvement than going back there.”

Pursuing Profits or Providing Shelter?

By operating surreptitiously, these board-and-care owners escape strict--and often costly--licensing standards that require medical staffing, nutrition guidelines, recreation, transportation, bookkeeping, occupancy limits and unannounced inspections.

Most of the known outlaw operators run several homes, each containing a dozen or more clients. At least some of the operators appear to have worked together in the past, then branched out on their own after seeing the profit potential.

When authorities recently found 27 disabled Social Security recipients jammed into a filthy, six-bedroom home near downtown Los Angeles, they calculated that the operator was garnering $19,000 a month, easily dwarfing the monthly rent.

“There’s hundreds of [unlicensed homes] out there, and they’re doing a great detriment to the clients,” said Bill Thompson, a manager at a state-licensed facility in Bell Gardens. “They just want their money.”

Unlicensed operators acknowledge that some in their ranks are more interested in profits than in quality care for residents. But many others, they say, provide a humanitarian service to poor people who otherwise would be living in cardboard tents on city streets.

Even operators who provide decent living conditions may neglect the victims’ medical or psychiatric needs--one reason a license is required.

At one of several homes operated by Gloria L. Cohen, investigators found a double-leg amputee who they say was in obvious need of specialized care. In the front yard of another of her homes, a resident waved his arms wildly and ranted. Cohen has been charged with seven counts of running an unlicensed board-and-care facility.

Cohen insists that she does not operate board-and-care homes but rather “room and boards,” which require a city permit, not a state license.

“I look at it this way,” she said of her residents. “They can live on skid row or they can live in a house. I’m not making that much money. It looks like it, but by the time I repair and buy new furniture and stuff, there’s not much left.”

Recruiters Target Skid Row Residents

On the front lines of the unlicensed board-and-care industry are the so-called recruiters who prowl the streets looking for people receiving government subsistence. They comb areas near veterans hospitals, homeless shelters and especially skid row, where it is easy to find a vulnerable target amid the mass of misery and despair.

Most prized are those who receive Social Security benefits or Supplemental Security Income, which totals about $650 a month. Recruiters also prefer people with no relatives nearby, minimizing the danger of anyone alerting authorities.

After the housing deal is closed, the recruiter phones any number of board-and-care operators with whom he works. The “client” then is hustled into a vehicle and driven away.

For his part, a recruiter gets a finder’s fee of $50 to $75.

Along skid row, these transactions happen over and over, day in and day out.

On one recent weekday, soon after a recruiter had gained the confidence of three dazed-looking men, a sedan pulled up and spirited them away. Another recruiter, who goes by the name Victor, said he simply asks people if they need a place to stay. Has he seen the places he sends them? an observer asked. “Talking to you,” he responded, “is not going to do me any good.”

At times, recruiters lure people from better living arrangements, such as city shelters, with offers of alcohol or cigarettes because they know their targets often are too weak to resist.

“Sometimes they even have the gall to come right into our facility to do their recruiting,” said Thompson, the manager of the licensed home in Bell Gardens. “Just last week, we lost a client at the mental health clinic. We had taken her over there for her counseling session and this guy talked her into going with him.”

Many licensed operators have reported having clients snatched off the streets. Said Clara Culpepper, who runs a licensed facility on Martin Luther King Boulevard in Los Angeles: “I had one man here not too long ago who went for a walk and never came back.”

Once a new resident is snagged, the operator’s first order of business is to make sure the money starts flowing.

This can be done with a phone call to a Social Security Administration office. Residents are instructed by their new landlords to say they want their checks sent to a new address. Often, they are coerced into making home operators--or their relatives--payees on the checks.

“These guys are basically flimflam artists,” homeless advocate Gerald N. Minsk said of the unlicensed operators. “They say to a disabled person, ‘Hey, I’m going to do you a favor.’ But then they take advantage of them.”

Sisters Learn of a Brother’s Nightmare

It was months since Edward Pace’s sisters had heard from their brother, a 48-year-old ex-soldier with AIDS.

Although he had fallen on hard times, the family always stayed in touch and, most important, stayed close.

His two sisters had begun to think the worst when they received a call that would bring relief and then shock.

A woman said she was caring for Pace and requested that his government checks be sent to her post office box. Although the woman sounded convincing, the sisters were wary and asked to speak with their brother. He sounded depressed and woozy. He begged them to come get him.

They found a different man than they had known--gaunt, unkempt with the gawky, unsteady gait of someone who had been drugged. He wore no shoes or underwear.

With the help of sheriff’s deputies, Pace was transported to a Los Angeles veteran’s hospital, and a kidnapping probe was launched.

From his hospital bed, he told his sisters of the strangers in a purple van who had approached him while he was walking downtown. They asked if he needed a place to stay. Inside the van, he said, he was offered a soda he later believed was spiked because he immediately fell asleep, awakening later at a rural compound.

There, he said, he was beaten, poorly fed and denied access to his critical AIDS medication.

His sisters recounted the story to authorities, who initiated an investigation but never got the chance to interview Pace. He had slipped into a coma and, within weeks of his rescue, died.

While his sisters believed justice would ease some of their anguish, they were stunned to learn that prosecutors dropped the case. The reason given: There was only one witness and he was gone.

“The D.A. wouldn’t file charges because we had . . . nobody to come to court,” said LAPD Det. Bybee, who investigated the case.

Pace’s sisters believe their brother’s death--one of at least six linked to illegal board-and-cares since December 1993--could not stir officials to act because, quite bluntly, he was unimportant.

“This is one of the most heinous situations I have ever seen,” said one of the sisters. “It’s flesh peddling.”

Flaws in System Exacerbate Problem

Everyone--prosecutors, investigators and social welfare officials--agree that the system designed to scotch unlicensed board-and-cares is badly flawed.

The Social Security Administration is responsible for ensuring that checks go to the right people, but it is not responsible for someone’s living conditions.

The county department of Adult Protective Services can remove an adult from an abusive situation, but it has no authority to bring charges against an unlicensed operator.

In theory, that authority would reside with the community care licensing division of the state Department of Social Services, which investigates licensed board-and-care operators who violate state regulations. But the agency’s investigators cannot even enter an unlicensed board-and-care without the permission of the owner because it is the equivalent of a private residence.

Police and prosecutors, meanwhile, say the victims make poor witnesses. They are intimidated by defense attorneys and by the prospect of going face to face with the very people who took advantage of them. Sometimes, they don’t show up for court, resigned to their fates, their spirits long since eroded.

Beyond the flaws in the system, there is a lack of urgency to help these disenfranchised victims, many of whom were long ago abandoned by their families and the social welfare system.

More often than not, said Los Angeles Deputy City Atty. Donald Kass, a consumer fraud specialist, the system’s attitude is: “Well, at least they’re keeping these people off the streets.

“The fact that these people are not given adequate supervision and they have all their benefits taken away, as well as their Medi-Cal cards and medication, is kind of ignored.”

When convictions are won, the penalties handed down have been mild, usually a small fine and probation, providing scant deterrent.

“It’s very frustrating,” said one veteran social worker. “In addition to the inhumanity of it all, there’s a lot of money being stolen. Unfortunately, there’s nobody out there beating the drum for these victims.”

Victims Bond Through Their Shared Ordeals

While the victims know they can’t always rely on the system, they have learned that they can count on each other. Despite their infirmities and plights, the residents forge bonds of companionship that are both moving and sustaining.

You can see it in the imploring eyes of Earnestine Luster when investigators recently found her and several others during a raid at a dreary, freezing, lice-laden facility near Palmdale.

“We’re going to be together, aren’t we?” Luster asked, when investigators explained that the group would be relocated. “We’re like a big family.”

You can hear it in the voice of Mark Lawrence, a 45-year-old schizophrenic, as he tells of the day he fled the Palmdale home. He says he was so worried about those he left behind that, two days later, he managed to compose himself long enough to locate a Social Security Administration office and guide authorities back.

You can feel it in the special bond between Clarence W. McKinnie and Rose Marie “Katie” Feller, both 51. He is blind in one eye and fast losing use of the other. She is stooped and palsied. It is clear they see something in each other that others don’t.

Time was, he could build a house from the ground up and have enough vigor left to dance outside a Vermont Avenue record shop. She used to love to dance, too. Both have children they haven’t seen in years.

Clarence and Katie, plucked off the streets of Los Angeles, have endured life in three unlicensed board-and-care homes over a two-year period, each worse than the next. They had been in the Palmdale home for about six weeks before authorities arrived.

Despite their physical and mental limitations, their ordeal seems to have brought them as close as two people can be. When social workers during the raid ask for their Social Security numbers, Clarence recites his by rote--and then hers.

When authorities begin searching the home, upsetting Katie, Clarence drapes a gentle arm over her back and tightly clutches her gnarled hands with his.

“Can you help me and Katie?” he asks the investigators. “We want a better place to live.”

While most of the rest of the residents huddle around a potbellied stove, craving warmth and comfort, investigators find numerous prescription drugs at the home--mixed together in a plastic bag. There is no way to know who’s supposed to get which pill. But it doesn’t matter because they all get one of each. Some of them also get an injection from a visitor they know only as “Bernard.”

Two mental health workers determine that Clarence and Katie need medical evaluation, and paramedics are summoned. But they refuse to transport the couple, saying: “We’ve got a limited number of ambulances and we need to save them for real emergencies. This is not a real emergency.”

Clarence and Katie do not protest. They instinctively seem to know they are outcasts.

When it comes time to leave and none of the investigators or social workers appears willing to offer a hand to help her from the floor, Clarence says politely, “Would someone help Katie. She is a lady, you know.”

By day’s end, most of the residents would be safely ensconced in licensed board-and-care homes with beds of their own and warm running water and field trips. Clarence and Katie would be placed in Room 135 of an ornate facility in downtown Los Angeles.

Told on a recent afternoon that the lunch menu included hamburgers, Clarence’s eyes light up like candles.

“I told you, Katie. I told you it was going to be hamburgers. It’s just like in my dream,” he says, laughing loud and full like he did as a young man so very long ago.