If it weren't for Shirley Mitchell and a few hundred other old folks like her, the California Victims of Corporate Fraud Compensation Fund would be a joke.

As it is, there's nothing funny about it. The fund is little more than a lie, one sanctioned by the state of California and overseen by Secretary of State Debra Bowen.

Mitchell is an 84-year-old mother of three daughters and a grandmother three times over. Her husband, Bob, was an executive at Safeway who died in 1998.

She lives in a three-bedroom tract home in Elk Grove, volunteers at the Sutter Hospital cancer center and was ripped off by a disbarred lawyer named James A. Walker.

Walker was a radio talk show host who passed himself off as a financial adviser catering to elderly people. After fleecing hundreds and maybe thousands of old folks out of hundreds of thousands of dollars, Walker declared bankruptcy. His corporation, Senior Care Advocates Inc. of Roseville, disintegrated.

Walker's scam, detailed in a suit by the California attorney general, was simple: He and his minions promised senior citizens financial security and guaranteed health care through Medi-Cal for life, if only they would sign over their money.

Mitchell heard of Walker through a church and made an inquiry. One of Walker's employees came to her home in 2004 and persuaded her to write a check for $15,500 that evening. She never saw the money again.

"Being the age that I was, I was scared, and a little nervous about the future," the white-haired woman told me.

Mitchell has zero hope of getting her money back from Walker. She and her lawyer, Mark A. Redmond of Sacramento, have no clue where he is. He stopped making payments on judgments against him. Her one hope of getting anything is through the Victims of Corporate Fraud Compensation Fund.

She applied to the fund in May 2010, along with more than 500 other victims of Walker. She signed the application under penalty of perjury, provided a canceled check and submitted proof that a bankruptcy judge had entered a default judgment in her favor against Walker.

The secretary of state's attorneys responded with a six-page single-spaced letter citing all the many, many reasons why the state cannot pay the money.

Like other old folks who are victims of Walker, Mitchell waits and waits some more. Mitchell is in good health. Others aren't so lucky.

Redmond and his partner on the case, Lawrence Salisbury of San Diego, estimate that as many as 50 elderly people who lost money to Walker have died.

"These folks are dying. I have no idea why the secretary of state is being so resistant," Salisbury said.

You've probably never heard of the Victims of Corporate Fraud Compensation Fund. It was created by legislation in 2002, amid corporate scandals of the day, particularly ones involving Texas energy manipulator Enron and WorldCom, whose executives perp-walked their way into prison.

Legislators, rushing to show they were acting to protect the public, pushed through a package of bills they claimed would crack down on corporate fraud.

Then Assemblyman Kevin Shelley carried the bill to create the compensation fund. At the time, the San Francisco Democrat was running for secretary of state.

The California secretary of state doesn't have a lot to do. But one of the office's few duties is to oversee corporate filings.

Shelley's bill tacked an additional $2.50 fee onto the cost of filing incorporation papers, earmarking the proceeds for the Victims of Corporate Fraud Compensation Fund.

Shelley won election in 2002. It didn't work out well. He was hounded into resigning from office in 2005.

Although he had his failings as a politician, Shelley saw the political significance of controlling money that could be doled out to widows and orphans, and undoubtedly would have handed plenty of it out. Bowen doesn't have the same sensibilities.

Since its creation, the $2.50 fee has generated $14.6 million for victims of corporate fraud. At last count, individuals have filed 701 claims seeking up to the maximum permitted by the law, $20,000.

Of those 701 claims, 10 people have been paid. The total payout has been $112,496.

The fund has been so underused that in 2010, then-Gov. Arnold Schwarzenegger and the Legislature seized $10 million from it to pay other state bills.

Bowen, who is serving her second four-year term, didn't talk with me about the fund, but she responded via email, stating she doesn't "think the fund is working as it was envisioned 10 years ago."

"However, I'm also not sure it's possible to make the fund work in the ideal way people would want," she wrote.

"Some corporations are defrauding people, and we always want justice for victims. Yet, many victims of fraud do not qualify for this particular fund or, if they do qualify, they do not know about the $20,000 cap and the potentially months-long waiting period for payment."

The most Mitchell could hope to receive is what she lost, $15,500. She isn't sure what she'd do with the money. Maybe she'd take a trip. Maybe she'd put it in the bank. She doesn't get her hopes up that she'll ever see it.

"My honest opinion?" she said when I asked her what she thought of the Victims of Corporate Fraud Compensation Fund. "It's another government boondoggle, another way for them to get money to spend like they want."

True, so true.

A politician thought up an idea in pursuit of higher office, and figured out a way to pick $2.50 from the pockets of the citizenry. The program has failed. The money is being squandered.

Here's what should happen: Bowen should seek the repeal of the 2002 law, cease collecting the money, and refund it to people who paid it. But first, she should pay Mitchell and others who have valid pending claims, while they're still breathing.

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