We cannot answer all of these questions from afar, but in general if your father-in-law is competent, he can do what he wants with his money, just like you or any other adult. If he is not competent or is losing his capacity, there may be ways to get money back or to penalize the caregiver. But the cost of doing so through private means may well exceed the $3,000 lost so far. If there is an organization that provides protective services for the elderly in his community, the organization may be able to take this on at no charge. More important, we would recommend taking steps to prevent additional money from being lost. If your father-in-law is competent, this will depend on his being willing to share control of his financial assets through a durable power of attorney, trust, or joint account. If he is not competent, the family may need to seek court-appointed conservatorship over his finances. In either case, an Indiana elder law attorney can help with these steps and probably answer your questions. Again, the best thing to do is probably to take steps to prevent further loss. Here is a directory of attorneys in Indiana: http://www.elderlawanswers.com/indiana-elder-law-attorneys.
For information on guardianships, click here.