Received demand letter from Grandma’s attorney. What should I do?

My goodness gracious. Every day I become more and more appreciative of the family I have. As to your situation, I'm sorry I don't know what you should do now other than hire your own attorney. Obviously you never should have cashed that check.

Sofrustrated87, glad you forwarded the bank statements to show that you did, in fact, return the money to your Grandmother.

Now my question, I wonder if Grandmother is using said money for her own care, or is still "hiding" the money so she can still have the taxpayers pay for her care? Now, to me, THAT is fraud. Your Grandmother sounded like she fully understood she would lose her benefits if she reported the money which is complex, thus no dementia was being shown..

OK. You committed fraud. You did so knowingly in accepting the check, depositing it, and doling out the money to your grandmother knowing she is not claiming it. Your Grandmother has committed fraud, as well. Taxpayers were funding a woman with 100,000.00 and you were assisting in this knowingly. As POA for my brother I have to keep meticulous records of expenditures. I keep a record book. I keep a diary. I keep file folders. I monthly send him an accounting and keep one in my own file.
You do have your bank statements for withdrawal, which you also carefully and knowingly did in amounts under 10,000 so that it would not be called into question. Were I a juror I would not be looking on any of this lightly at all.
You have been honest with us in what you did, and that you did it with knowledge a forethought, and knowingly.
I would now hire a lawyer and be as honest with that person as you were with us.

You will need an atty but what type I just don’t know, like depends whether it’s civil defense or criminal defense. I’d guess it will depend on what type of action taken against you and by whom. Personally I would not contact APS. If APS contacts you, then your attorney responds.

This is not a DIY, you need an attorney & if it means a 10k retainer, & you don’t have it, ask if they will take maybe half AND you do a personal bond for like 50-100k. Make sure you can be bondable. Bonds aren’t just for criminal stuff but also often needed for someone named Executor for probate or a partner in a bigger deal with a governmental agency (like your a vendor for city contracts). Look to make sure you “fit” being bondable before you mention this.

BUT whatever the case you imo
- must do a very detailed timeline on all the actions in your bank accounts & in conversations with her to share with your attorney. Id suggest you get on this ASAP, like buy a Intuit / Quickbooks type of product to input all this into. And the timeline goes back 6 years. Like you can show your bank accounts that get your salary, dividends, spending and then that 100k influx & the 10k withdrawals since then. If you show no big spends or assets acquired over that period of time; and you keep your job or usual income into your bank accounts, this should show that you got no benefit from the 100k if this was the case.

- if you did buy stuff, like new car or house or property, or big expensive vacay, you imo need to be able to show that these spends make sense for your income or the income of you & your spouse.
- I’d get last 6 years of taxes too. If you don’t have them, you request these from IRS & ASAP before tax season hits.
- Pull your credit reports from the big 3.
- go to your bank and get the paperwork on that 100k check. There needed to be paperwork on any $ move over $10k. There's federal requirements on this as part of terrorism & drug $ tracking. Bank will have it. You want this. It may have been done on the 10k withdrawals too, so get the paperwork on these as well.

- what did she do with the cash? If you kinda know how she spent it, do notes on that.
All these things you take to attorney you find. Most criminal defense guys have associates who deal with civil. You’ll likely have to do lots of calling around as most criminal guys do drug & murder & don’t do white collar (embezzlement, fraud, contracts). Yours are white collar issues.

The WalMart tort $, write up a note on what you remember on this. If there was a health care bill component to her lawsuit that was part of the settlement $ paid to her AND she was on MediCARE at the time, if this was after 2009/2010, the MediCARE Secondary Payor Act is in force. It’s a federal law. It requires that should you get a settlement and the health care costs paid in anyway by Medicare were included in the settlement that you are required to repay Medicare the $ you were paid for those care costs. I’d be like white on rice to find out this info as it will show she had a pattern of bad behavior before you ever came into the picture. Your attorney should be able to use this as leverage. It will get ugly.

You write “trustee of the Estate”, to me that does not make sense.
Either there’s an Estate which has Executor or Personal Representative & the actions were done in probate court for Estate of a deceased & which had grannie as a heir who got a 100k distribution from Estate assets,
OR
there is a Trustee of a Trust & these actions follow however the Trust was set up legally years before which the Trustee has authority to do.
Which is it? It imho will make HUGE difference as how to approach.

The attorney who contacted you, how are they representing Grannie? They should have said this in the letter to you. So What type of attorney are they & if it’s a firm, look at their website to see what kind they are.

I would let them do the next move. You responded and provided documents showing a transfer of sorts.

This is what is meant by "what a wicked web we weave when we practice to deceive".

Hopefully you don't pay to high a price for helping her defraud public assistance. But education is expensive in a classroom or out.

You watching her do this for years makes you as guilty as her in my opinion, her keeping the 100k would have not been a problem for you had she not retained an attorney to get her money from you, again. This is the end result of fraud, someone pays.

Well, when one attempts to hide money from the government, there can be repercussion's. Unfortunately, you decided to be part of the scam to defraud we taxpayers.

You said that you paid her 10K a month for a few months, where is the rest of the money? Did you spend it on yourself?

Strongly urge you to hire an attorney, this could get real nasty. Me, I'd report her and admit my wrongdoings, let the chips fall where they may.

Oh what a tangled web we weave when first we practice to deceive.

So sorry you got tangled up in this. Another, no good deed goes unpunished.

Igloo gives some good advise. And I do think you need a lawyer. I would do nothing till I talked to one. This is serious, u have the State involved.

Good Luck and keep us updated.

I think you've been chastised enough, and are probably mentally beating yourself up, so I'm not going to address that but rather try to sort through this, complicated as it is. to ensure that I understand the facts.

1.    Your G/MA sent a check to you for HER inheritance, from an aunt's Trust, presumably having made a decision to "give" or "hold" it.  

1a.    If you still (hopefully) have the enclosure letter, add it to the files you're preparing to defend yourself.   I'm assuming the letter did NOT address Medicaid, etc. qualification, or giving you the funds outright?   No mention was made either of "gifting", or holding it for her?  

Did you respond in writing?   Did you infer from the letter that it was a gift?

1b.    If she was cognizant of what she was doing (a), it's deliberately intending to withhold critical information, or defraud, the government, by hiding the funds through you,   

1c.    FreqFlyer makes a critical point. It APPEARS as though she was deliberately trying to conceal the inheritance, which shows "intent", and inferentially "intent to defraud" government agencies.  I believe that "intent" is a critical factor in proving fraud.

Thus, your grandmother probably has liability for intention to defraud.   You may be considered a co-conspirator, depending on the extent of your knowledge of her plan, and acquiescence thereto, at the time.   That's, if, however, legal action is taken.  

(I'm not trying to frighten you, just put the situation in perspective.)

2.    "she refused because she clearly did not want to handle this above-board".   Did she actually say that or was that your interpretation?   If the latter, you could be "assuming facts not in evidence", and it could be argued that it was YOUR assumption but not her intent.   (Just warning you.)

3.     I assume you either still have withdrawal slips for each of the $10K deposits, which I'm HOPING you didn't comingle with your own funds.    If you don't have deposit slips, the bank would, so they're traceable.    That at least reflects the deposit & subsequent withdrawals.

4.     I'm also assuming that she didn't sign receipts for the return of the funds?

5.    The demand letter is interesting; there's no threat of legal action, just involving APS.    I'm not sure what this reflects.  It could be that legal action would be threatened, beyond calling APS, but it could also reflect that the firm is aware your GM may have attempted to defraud the government.  

6.    If the firm is aware that your GM didn't report a WalMart settlement, the firm may be trying to intimidate you, but w/o bringing in the IRS, as that would likely produce demand and/or audit from them.  

7.   The issue of her IRS fraud is HER problem, not yours.    What you need to address is (a) inference that you kept her money (b) shielded it from government agencies, and (c) now refuse to return it.

From what I've thought about this aspect alone, you do need counsel from an attorney, a very specific practice attorney.

8.   I would try to find (a) white collar defense law firm, perhaps with one of the "silk stocking" law firms, and be prepared to pay generously for it.   (b)   I don't see the benefit of an elder law firm other than working as co-counsel with a criminal defense attorney to address the issue of GM's mental stability.  

There are different types of IRS tax  attorneys, which I would consult as well.  I think an "Enrolled Agent" would be appropriate, but I'm not knowledgeable about this; I worked for one on a temp basis; he primarily helped negotiate down penalties for improper tax reporting.    I don't know if he did potential criminal representation as well, but you could protect yourself by addressing the issue before the IRS does.

https://irs.treasury.gov/rpo/rpo.jsf ;

Out of space (see next post).

9.    In the demand letter the attorney concluded you are holding her money in "constructive trust."   My immediate thought: he/she's making a conclusion which may or may not be an inferred threat.   

The best definition I could find is this:

https://www.law.cornell.edu/wex/constructive_trust ; 

I think if infers that you could be "unjustly enriched" by holding the funds if you failed to transfer them (back) to GM.   

10.    I'm uncertain about contacting APS.  You don't want to raise the issue of possible fraud, which would probably obligate them to contact the IRS.   OTOH, you want to be preemptive in protecting yourself.

I don't have good enough insights on this to make good suggestions.

11.   Many people here believe they have a POA or DPOA "over" someone.  That's an erroneous interpretation.   The powers that are granted are fiduciary ones, and the proxy (which you are) acts on behalf of the individual who created the document.

No one HAS any authority OVER anyone else through POAs or DPOAs.   Proxies have obligations, a different relationship.

And I would seriously consider resigning and advising your GM in writing, sent by certified mail (none of this texting stuff).   My hesitation though is an inferential guilt, so I would also discuss this with the attorney you find.

But I sure as heck wouldn't act or do anything else pursuant to the authority granted.    You need to get yourself completely out of that obligation.

If I've erred in any of my conclusions, please let me know.    I think you do have some options, but agree that you need a very specific practice area for representation.     And I'd be very proactive about finding someone.

As someone who has coded the transaction information searches for fed reporting requirements, I assure you the transfers have been reported because (1) the $100,000 deposit was reported;
(2) the actual minimum reporting per transaction threshold is less than $10,000 - lots of crooks thought $9,999 was a smart withdrawal since the publicly reported number was $10,000;
(3) the total of large non-scheduled withdraws over a 6-12 month period combined is evaluated (scheduled or monthly/quarterly repeated withdrawals like mortgage or tax payments are ignored); and
(4) Actually depositing and then withdrawing in large transactions the same amount within a 12 month period sets of the money laundering monitors.

Over 99% of reported transactions are ignored because the person involved doesn't have any criminal history or even a history of flagged transactions. Unfortunately because the withdrawals were cash and the feds cannot easily follow the cash and you are going to have multiple reports from this one bad idea, it's very likely someone is going to come knocking on your door someday - or maybe just a letter; when/if someone does, please remember you don't have to answer just because a question has been asked. Please have an attorney review any response you make - always remember some fed will be getting a promotion based on how many cases of money laundering and/or tax invasion they discover, don't allow yourself become one of their numbers.

SoF - ok the way you described the 100k, sounds like it was done through a probate action. That is good as probate is open records so in theory you can get copies of whatever done. If it was actually done through a trust, that would be a real buttrash as trusts are private.

this is I bet what it was.... Great Aunt died & left a will & owned a home. G Auntie had $$$ + assets which as she’s dead is now her Estate. Her estate has a case # in probate court. House was sold & added to the overall kitty of $/assets for G Aunties Estate. G Aunties cousin / niece was the Executor & she was named this in the will or appointed by the probate judge. Your mom was a heir (could be other heirs as well). Executor had to do a distribution of Grams assets based on the terms of the will. I’d be concerned that the Executor didn’t do thier job appropriately as there's rules for a heir to do a pass-by (a disclaimer) for $ or a relinquishment for property that was their inheritance AND there’s rules on how distribution is done. If you were not an heir, you cannot be paid as one unless the heir died & you are the heir to the heir OR a very precise disclaimer or relinquishment was done. This in my experience kind of stuff needs Judges Orders signed off on. There should be an accountability to IRS or state tax authorities for distribution too. Like you as a heir get a W-9 to fill out & return; the Executor or the probate attorney or if it’s a big estate the CPAs that’s dealing with breaking down the distribution, should make sure this is done and it’s entered as an attachment to the distribution list or order to the docket that is the PC case number. It’s not usually taxable income but it’s still reportable & should be somewhere in the docket for grannies probate. Stuff like that can surface eventually. That Executor imo could be themselves in trouble if they wrote out an “estate of” written check for 100k to an individual (you) not listed as a heir as per the will & did not do due diligence to get all paperwork correct & submitted for an Order. If you did not sign off on a document on the disclaimer or relinquishment, I think that Executor did not do what was required. I know it seems confusing, but read this again.... it’s all sequential actions. It’s dominos. I’ve been an Executor x3, (first one had real property relinquishment, nothing but fun & it took months to get order approved for this), it’s really kinda imho all about exactly formatted paperwork in a sequential order in a state mandated time frame under tight probate laws.

The good part that if this was probate snafus, well it’s all public record. So you can either go online to probate court to find G Aunts docket and for a small fee pay for a download of all entered, or get down to the courthouse with a whole bunch of small bills and change & ask the probate court ladies how to get copies. It’s gonna be way way cheaper if you do this and give to your attorney. Atty will need all this 1 way or the other, it’s cheaper if you do this. Plus you can read & reread all the whatevers on G Aunts estate.

I would suggest that you DO NOT mention this ( downloading of probate documents) to the Executor or any other family just yet.

your Grannie when she applied for Medicaid or HUD or any other “need based” programs signed off on an application that if her status for income or assets changed she was REQUIRED to contact her caseworker or the state within short order. She cannot decline an inheritance or decline being a beneficiary of a life insurance policy. It’s an asset that’s is to her. She was required to report it.

Just like if she got settlement $ from WAlMart that included Medicare paid costs, she was supposed to let Medicare know. All this starts to show a pattern of grifting by her.

Hopefully you did not do her paperwork or sign any of her various need based applications or renewals as her DPOA. You didn’t do this, right?
Please, please tell us, you didn’t.

Entering back in and picking up Frustrated's responses to others.
Frustrated. Am I right here.
The only person who has contacted you is GRANDMA's Attorney, who claims that you are holding her money in some kind of Trust?
Seems to me then that you can prove to this attorney the withdrawals that you gave to Grandma, tell him what you have left, and arrange to have it transferred to Grandma's account right now.
This old woman is into fraud, so were I you I would resign as POA for her. She is going to get you in trouble if she has not already. Yes, she will lose medicaid. GOOD!

I think, on first reading, depending on how you feel about them...

I was going to say, go to the police. But perhaps an attorney.

Never mind the financial abuse. You have been knowingly complicit in social security fraud. In fact, you actively assisted it.

I appreciate that you were acting under duress but I'm not sure that the authorities will see it the same way. Get legal advice. I'm sorry for what's happening to you, truly.

Ayayay - why in God's name didn't you send the check back to the trustee, you wombat????!!!! But I know, 20:20 hindsight and all that. I am sorry.

Frustrated,

Did I read that your grandmother sent a letter to the executor of the estate that she was to inherit from, requesting that her portion be sent to you? Grandmother never got a check from the estate she was to inherit from?

Do you have a copy of that letter? Can you get a copy?
Did your Grandmother “waive” her inheritance? I don’t even know if you can do that.

Yes, this is a mess.

But explain again the paper trail so others with more experience can see it.

You need a lawyer.

You need an attorney asap.  Do you have any way of proving that you gave Grandma the cash?  No signed receipt? No witnesses?Frankly this is the reason that you can never trust narcissists and must protect yourself from them at all times.  I would have refused to touch any of Grandma's business with a 20 foot barge pole and would never have agreed to be POA/DPOA. But an attorney may be able to help you.  And do not cover up any of Grandma's frauds. Let it all come out. Perhaps an attorney will advise you to turn in Grandma for defrauding the taxpayers. I'd do it!

You've committed Medicaid Fraud, a serious offense, and quite likely a felony given the amount. Get ahold of a lawyer very quickly.

SoFrustrated, don't beat yourself up.    Consider it a lessons learned.  We all have them, some are harder lessons than others.   Keep confidence  in yourself while you unravel your involvement.

We can learn from each other.  Your situation may help someone else, now or in the future.  


I think that the issue of her "giving" you the money might still be unclear, and I'm assuming she didn't state that she was giving it to you to hide from Medicaid.  

So, if you did think that she was giving you her share of the inheritance, I think it would bring into play the issue of "gifting", for which she should have had to file a gift tax return, a Form 709 I believe.  But that's her obligation as the "gifter."

And that's complicated b/c you returned the funds, but apparently she's claiming she didn't receive them, so that would infer that any gifting would have been rescinded.   Then she wouldn't have had to file a 709.    Whew!   (This is her problem though.)

Why don't you take a day off, go hiking or something, putter in the kitchen, read, or just relax and start working again after you've done so?  

I do think that if you approach an attorney with the concept of correcting and resolving your own involvement, you'll be better off than if someone else raises the issue.  And at this point, I think you're wise to stay away from this grandmother.   And I wouldn't take any calls from her either; confine any interaction to written communications.

Have a peaceful night, and refreshing day tomorrow.  

Whoops - answering your question as to my point nos. 7(a), (b) and (c), which I'm reposting for reference as this thread is becoming very long and I've already forgotten what I wrote earlier:

" What you need to address is (a) inference that you kept her money (b) shielded it from government agencies, and (c) now refuse to return it."

My thoughts were that (a) would apply to the attorney's demand letter and involve getting copies of the bank statements, so any "defense" would be to the letter' accusations. 

(b) would apply if in fact she intended to shield the information from Medicaid, et al, if she used you to accomplish this, and if you had knowledge of and knew that a potential crime was being committed.  I.e., were you an accessory?

(c)  would be her responsibility to prove she made the accusation.

Does this make sense now?

I’ve been thinking about this post nearly nonstop. I’ve got some thoughts and opinions - naturally - but I’m curious about few things... mainly just to round out the situation in my mind.

First, just how old is granny? To have granny’s aunt leave her money means either granny isn’t all that old or auntie lived to be incredibly old.

Next - what’s grandmas overall health like, both mentally and physically?

Is granny a “suing sally”? What was the Walmart deal about?

Lastly - Any idea what bug crawled up granny’s backside to get her to instigate this mess? Any possibility she actually believes what she’s saying or is she consciously trying to hustle you?

Thanks

Frustrated, just read your post in answers below that you contacted several attorneys who want as much as 10,000 up front. If you cannot afford this you may be left now to wait and see what action is taken. I would, however, resign as POA. You aren't up to knowing what is involved in this job I think, and you don't indicate you have receipts, timelines, records, diaries as to what this is all is. If you still have Grandmother's funds you may consider asking her attorney how you can transfer to her account the funds remaining. You mention you withdrew under 10,000 several times. This would leave 80,000 of Grandma's money you do in fact currently have, that you should not have. The honest truth is that almost no matter WHAT this costs, you are going to need an attorney, court appointed or otherwise. If you have any money of your own, you may not be eligible for a court appointed attorney. I wonder if any here have any ideas of whether or not it would be a good idea to tell the Lawyer who wrote the letter, Grandma's attorney, that yes, you do (let us say) 80,000 of Grandma's in an account that she asked you to accept from an inheritance; that you have withdrawn and given to her in cash upon her request the amounts of "however much it was" on this date and that date. And then the chips fall. Because that seems to be the honest truth.
What a mess.
I will say to any and all do NOT agree to be POA for ANYONE unless you fully understand what this means. And NEVER attempt to shelter funds for anyone receiving taxpayer's money; it will not go easy. And keep records, VERY CAREFUL and thorough records as WELL AS a diary, in ink, without tearout in a composition book.
Remember, anyone can sue anyone for anything at any time, and whether one is guilty or not, one will still have to defend the case. As Frustrated says below, they are asking 10,000 in retainer fees.

I don’t know the legal situation about this in the USA (and perhaps the other posters don’t either), but this is my first reaction about this complete mess.

First, an inheritance to Grandma for a round $100,000 sounds most unlike the way most estates are wound up. Sending it by check to someone other than the beneficiary is even more odd. The first investigation is going to be into the Executor/Trustee of the estate of whoever is supposed to have died leaving all that money.

Second, from what you say Grandma’s worry was about losing her medical benefits, not a tax issue. You said that you would ‘find a way that was legal for her to use this money via trust or something’. If that’s true, stick to that. Then when she threatened you, you returned the money to her in installments. Fine, that ought to be her money and you gave it back. You do have some paperwork, although not as much as would be nice. You thought that this was the simplest way to comply with bank requirements.

Third, Grandma’s attorney asks you to account for what you did or they will file with APS. You did account as best you could. Filing with APS is about elder financial abuse, and you have answered that you gave her the money and you did not abuse her financially. From your post, it sounds that you have not heard again from the attorney about the matter.

Fourth, you have not heard from the Tax Office or the Police, or even from the medical benefits organisations that Grandma was worried about.

Last, Grandma is difficult to deal with, has a substance abuse problem, potential dementia, and past fraudulent dealings over money from Walmart. Getting information from her is going to be very difficult for anyone who wants to take it to court in any way.

Grandma is the first person in the gun here. She appears to be fraudulent, but she must be proved guilty of something, before you can be an accomplice. And she has to give credible evidence against you, which seems a bit unlikely, and particularly difficult for her to do without incriminating herself.

You now regret being very unwise in having anything to do with this. 'He who sups with the Devil should use a long spoon'. However in your situation, I would suggest that you keep your head down. The legal situation may not be the same as the obvious moral issues. If you told this story to the legal firms you have contacted, I am not surprised that they wanted a substantial down payment before even trying to get their heads around it. This is the sort of situation that is likely to be much too hard for anyone to find it worthwhile pursuing, and that is quite likely to include the Criminal Law. It would not surprise me if you hear nothing more. The most likely outcome, certainly initially, is that Grandma will lose Medi-Cal. And it won’t be easy for her to challenge that! Calm down, wait and see what happens, and don’t put your foot in it unnecessarily.

Halle- frickin’- lujah!!!

MargaretMcKen, I love you!

Finally! The calm voice of reason and logic. I agree with you 1000%.

I was trying to word the same sentiments myself - perhaps why I find them so brilliant - but you have said it all and much more succinctly than I would have.

All roads in this cluster eff lead back to Granny.

This has been an interesting thread.

Frustrated, I must say, your grandmother has some brass balls coming after you.

Before she can prove you did anything wrong, or stole from her, etc she FIRST has to prove and ADMIT that the money was hers in the first place. Money she didn't report on purpose in order to keep her government subsidies.

I don't see where you have done a single thing wrong here. Poor judgement dealing with this self serving lunatic maybe, but nothing illegal.

I bet grandma is just blowing smoke and this elder care attorney who sent you the letter seems like a kook. Does he know HIS CLIENT never reported the money??

I would ignore it all, and break ties forever with this toxic creature.

What has transpired here is a crime. Your grandma committed fraud...on a grand scale...but, you are an accessory before, during, and after the fact. You not only abided this crime...you actively help to commit it and conceal it,

oh boy....get a criminal attorney. This isn’t going to be cheap.

EP, to explain, possibly: it has been my experience that narcissists' recollection of events and facts is exceptionally selective. They will include anything that fits their desired goal - e.g. I inherited $100K in cash, I arranged for it to be channelled through my niece, my niece must hand it over - and discard anything that doesn't - e.g., in this case, Medicaid pays for my care, my niece has handed me large rolls of large bills on numerous occasions, I have been burgled regularly, I'm not in fact sure of what my balance ought to be, let alone what it is, etc. etc.

So grandma will have gone to her lawyer with a narrative, and the lawyer is duly acting according to that narrative. It isn't the lawyer's fault.

But the trouble is that these stirrings will raise questions which may escape the bounds of lawyer/client confidentiality, and it is very difficult for poor F to demonstrate where she is blameless because of gaps in the paper trail. I really think she must take advice or she won't be able to sleep.

You need a lawyer! You knew your grandmother was committing fraud. You accepted that inheritance check and deposited in your account. You withdrew the funds in periodic amounts and gave them to your grandmother with no documented proof still knowing about your grandmother continuing fraud. You inadvertently helped her commit the fraud and you cannot prove you gave her the money. You had enough knowledge to pull only a certain amount money from your account so you would supposedly not be reported. That in itself shows you are not totally innocent in this whole fiasco. I do not feel bad for anyone who knowingly does or helps with fraud of government benefits. As far as thinking you will not be reported to the IRS by only withdrawing a certain amount is ludicrous. Not only do you have possible financial abuse against you, tax fraud could also be added to your dilemma. Even if you were totally oblivious to all that has transpired, ignorance is no excuse for the law and cannot be used asa defense when crimes have been committed.

Wait a minute.

The executor sent you a check made out to YOU?

I think you need to be in touch with the executor to clarify if those funds were yours to keep.

Perhaps gma exercised her right of refusal. In which case you owe her nothing.

Enough, already. Point taken, I’m sure.

I have to say that I find the continued flatulation of the OP disturbing. Wait... no... that isn’t right... that’s farting. Flagellation. That’s it. 

As bible verses are commonly used around AC - I’m going to use one of my favorites. John 8:7 “He that is without sin among you, let him first cast a stone at her.”  

Speaking only for myself - I know that I’ve certainly made some bad choices in my life. And yes, some of them illegal.  I bought alcohol before I was 21. I bought pot years before it was legal. And, I suppose I even defrauded the government when I lied a little about the amount I used as a charitable deduction. 

So I purpose - aren’t there shades of grey in our “sinning”, our mistakes? Or is it all so black and white?

Ffrustrated, when you talked to the executor, did you (or s/he) discuss whether the funds were going to you or to gma?

Hopefully everything works out positively for this individual. I was the executor to my mother's estate and know that inheritance checks are made out to the heirs name only. If the heir declines then that share goes to the remaining heirs. Those checks cannot be made out to a second party. If the executive did that they are in violation of the law, My sister tried that approach when our mother died. My sister had to set up an irrevocable trust so she would not lose her government benefits.

Frustrated: Your comments about Grandma read below? She is not old? Likely not demented, sounds to me. And with a history of avarice. I think that any case brought by her would end with her own accounts being investigated as to where she has hidden monies given to her, and would certainly result in a withdrawal of her medicaid, and rightly so. She won't go that far I think. I now understand that she gave all monies to you. I wouldn't talk to her lawyer. Refer her lawyer to the Estate Executor of the Aunt, to see how and why he dispersed the money he did in the manner he did. Meanwhile log in and gather together all receipts, letters, proofs you have and start a scrapbook of proof of everything you gave to grandma. Sounds like she is working a scheme right now, and it could be on you.
I would refuse any further contact with this old woman; she is a bully. Tell her that you have been advised by lawyers not to discuss anything with her while she is questioning actions you took in her behalf. Period. End of story for her.
Go to a lawyer at once and have a resignation of POA sent to her. NOW. Then get on with your pregnancy. This is something driven by your somewhat "mad" grandmother. No one else is questioning you. Just a pissed off Grandma. She is threatening you while you are pregnant? How is that for being a cruel, mad old woman.
Refuse to let it destroy the remaining months of carrying your first child. Get some help for mental health; that is privledged information you will give, and she or he can help you stay mindfully in your own life while this mad old woman decides her next move. And by the by, she isn't that old. Tell her you will not communicate with her until you receive a letter from her lawyer saying that the matter that was of concern to her is cleared up.
This old woman (younger than me) appears she is a totally bored drama queen. God knows where she is tucking all this money. What of it she isn't using for a lawyer. Is your mother still alive? What says she of any of this that her mother is doing? What of it is she aware of?