My brother had a temporary memory lapse and drove himself to the local hospital to see a doctor for help. Any advice on getting him out?

Why and under what circumstances did your brother "contact someone he thought he could trust?
What was the reason your brother signed the POA? Has he said?
Why was your brother "incompetent for a few days"?
Have you spoken to your brother?
Who told you all this other than the current POA?
Have you spoken to your brother at the nursing home and have you spoken to the nursing home?
Were you in touch with your brother during the period of time in which this hospitalization and transfer to a nursing home happened?
This is quite a story and I certainly do hope that you update us after you go to the place where your brother currently in the nursing home.
A POA cannot prevent a mentally competent person from leaving a nursing home. If your brother is competent mentally, and choses to come to live with you there is absolutely nothing to stop him. If your brother is competent and wishes to withdraw the POA from the person holding it he can now make out a new POA appointing YOU as his POA if he chooses. A Lawyer will, in fact, come to the Nursing Home and will assess his competency to appoint a new POA.
Keep us posted on how this goes for you. Wishing you and your brother good luck moving forward.

Alva's advice is good.   I would ask similar questions, so the answers will help us all.

Someone doesn't "get" a POA; he/she has to be specifically designated, in my experience interviewed privately by the attorney preparing the document and sign an acknowledgement accepting the terms and conditions.   Was this done?   Do you know who the attorney was, and the circumstances, i.e., if the attorney concurred that your brother needed assistance?

Have you spoken with someone at the nursing home, specifically as to the entry diagnosis (they might not provide that info though), and stated your position as well as concern?

Very importantly, WHO is paying for the nursing home stay.   Is your brother in a memory care unit?

Do you know what your brother's finances are?  Are any assets held jointly, with you, so that you could put a hold on withdrawals?  

I think whether you need to sue to remove him depends on a number of factors, including the legitimacy of the POA and the placement, whether or not there is any mental incapacity, what your own plans are, what the underlying finances of both your brother and you are, just to begin with.

In addition, what would be the cause of action?  Misrepresentation by the alleged POA appointee?   Fraud?   

You would need someone skilled in elder law fraud and abuse litigation, preferably a big law firm with a lot of power.    That can intimidate someone very quickly, especially if the "prayer" (request for legal relief) includes a request that the alleged POA appointee be responsible for all litigation costs and reimburse either you or your brother for expenditures.

Another issue:  what was the goal of this person?  She allegedly has funds from certain activities.  I emphasis "allegedly" b/c the actions stated need to be proved.   Someone is going to have to pay for his institutional care; is that her?

If your brother was not "of sound mind" in the hospital when he signed the PoA, it should not be valid. "Temporary memory lapse" doesn't fit the bill. The hospital notary would not have notarized the documents. Your brother would have voluntarily been one of the signers. No one can assign or give PoA for someone else, only the person (i.e. your brother). Beyond PoA, the "friend" would have had to pursue guardianship to do what she did (which costs thousands and takes time through the court system) and your brother would have had to show up in court to prove he is capable. PoA authority doesn't kick in until the assigner is deemed incompetent by a medical exam. "He is now in a nursing home labeled as incompetent"... so, is he in Assisted Living? Long-term care? Memory Care? Those are the only options, unless your brother is actually in the psych ward of a hospital (and not a "nursing home"). Why would the "friend" screw him over then call to tell you? In nursing homes residents can come and go unless they are a "wander" risk or danger to themselves or others, and then they are in the locked Memory Care section. This does not sound like the description of your brother's condition. There is much confused information presented in your post. One of those two is not telling you the truth, or you misinterpreted what was told you by one or both, which can happen in chaotic situations. You stated you live out of state so you have no real idea if the "friend" really did any of the things she said. Again, why would she screw him over and then call to tell you? And without being able to see your brother in person and speak to his medical team, you can't know what's really going on with him either. Start by figuring out what the truth is before you jump to "need a lawsuit to get him out". You can't do anything until you have facts and this will require you to go visit him in person, review his medical info, meet with his doctor, talk to the nursing home admin, and even try to meet with the "friend" -- in person. His "friend" being a crony of the nursing home owner should have nothing to do with any legal ability to put or keep your brother there. Think about it: who is paying for his room and board? It is very costly to keep someone in a facility. And by law residents can't be restrained. Even if your brother was very well off it'd still not cover the cost of his care over the years. And if he is not incompetent, who could keep him there? The facility would be in huge legal trouble immediately. They are not making money on his being there, even if he had Medicaid. He can contact the ombudsman to begin a complaint if he really is being prevented from leaving. Please consider that your brother is not getting all the facts right. Your post says he had a "memory lapse" but maybe he had a mental breakdown or something else... My husband had a concussion where he lost his short-term memory for 24 hrs. Even if I hadn't been with him the hospital would eventually discharge him once it was clear his memory had returned. Hospitals don't house people for very long unless they are very physically sick or injured or dying. Start by gathering facts, then you'll know what you can, and can't, do. I'm so sorry for your very real anxiety and being far away and feeling helpless. I wish you much success as you sort things out and help your brother!

First, as said, I would question the POA. Did he assign this friend. If not the POA is not valid. He is not a prisoner. You can have him transferred anywhere you want. If its a safe discharge it can be to your home. If he is competent he can make that decision. I would call APS in the County the NH is in and explain you think he was exploited. That you are willing to have him closer but you need to know how to go about it. If they are no help, call his state Ombudsman.

If you find there is money missing from his accounts not used for him, I would place charges against her. If brother is in his right mind, he can revolk her POA and assign you.

Call the Area Agency on Aging. They have an ombudsmen that regularly visits the facilities. Tell them your story and they will check in on bro.