Terri Ann Hauge's career as a lawyer came to an abrupt end in 1995 when state officials suspended her license for mishandling cases and lying to her clients.

But that didn't end Hauge's work in the courthouse. In a professional comeback that raises questions about how the state oversees court-appointed caretakers, Hauge and her business partner went on to amass the state's fourth-largest portfolio of work as guardians and conservators.

Though Hauge never sought reinstatement as a lawyer, she and her company, Estate Resources, were given control over the lives and finances of more than 200 vulnerable adults, despite complaints of neglect and mismanagement that go back as far as 2000, court records show.

Late last year, Hauge was charged with stealing $68,000 from 10 vulnerable adults in Rice County while ignoring their needs. One mentally ill man, investigators said, was living in squalor when he was rescued.

Court officials and social workers admit they failed to communicate among themselves about the well-documented troubles with Hauge and her company. It was forced to resign its Ramsey County caseload in 2006 after an audit turned up billing irregularities.

"Obviously it would have been good to be aware of those kinds of things," said Mark Shaw, director of social services for Rice County. "I wasn't."

The collapse of Estate Resources has left dozens of probate cases from Faribault to the Twin Cities in disarray.

It also raises questions about how a woman who blamed psychological problems for her failures as a lawyer could be put in a position of making decisions for people deemed mentally incapacitated by the courts. A 2010 federal study found fault with the screening and accountability of guardians and conservators nationwide.

The need for such services is growing. Over the past decade, Minnesota courts opened nearly 25,000 new cases, with filings climbing an average of 3 percent a year, records show.

Revelations of neglect, theft and other misconduct by guardians and conservators prompted Minnesota lawmakers to strengthen oversight of the unlicensed profession in 2009, but advocates say the system still falls short. While guardians and conservators must register with the courts by 2013, they are not required to pass any tests or possess any specialized skills. Applicants are required to submit to a criminal background check, but court officials don't have to determine whether applicants have been disciplined for misconduct by a state licensing board.

Such a step would have revealed Hauge's run-in with the state Office of Lawyers Professional Responsibility in 1995.

In a February 2010 e-mail to Shaw, Hauge blamed the county and the courts for her performance problems. "The pressures and legal responsibilities of this job, along with the neediness of the clients and the insanity that is Rice County, have been making me nuts for years," she wrote.

Neither Hauge nor Terrance Larpenteur, founder and president of Estate Resources, responded to calls for comment. Hauge's attorney, William Sherry, declined to comment.

A troubled legal career

Hauge, who was first licensed to practice law in 1980, has blamed her professional failings on mental problems.

In 1995, she said her "psychological condition" contributed to the errors she made on behalf of three clients, records show. In a stipulation, Hauge admitted lying to her clients when they complained about her unprofessional conduct. Hauge also was disciplined for legal misconduct in 1983 and 1990.

To get her license back, Hauge would have been required to attend regular counseling sessions and possibly provide "proof of psychological fitness" to the courts. But Hauge never took any action to reinstate her license, according to the lawyers' office.

In about 2000, Hauge joined Estate Resources and became its vice president, records show. The private company offered to manage the lives and finances of people deemed unable to do so because of mental illness, chronic substance abuse, developmental disability or senile dementia.

Such jobs are awarded by judges and probate referees, often on the recommendation of county social workers. Since 2000, Estate Resources was put in charge of 230 individuals, mostly in Hennepin, Ramsey, Dakota and Rice counties, court records show.

In 2000, the attorney for a ward in St. Paul accused the firm of neglect and tried to get Estate Resources removed from the case. Among other bungled tasks, the firm failed to pay the man's water bill, forcing the city to turn off his service, the lawyer wrote to the court. The man had to use a garden hose to borrow water from a neighbor. Despite the complaint, the judge allowed Larpenteur's company to keep the case.