What to do about delusional accusations of theft?

First I would make totally sure, or as sure as possible, that they are delusional. I'm just throwing that out there because my friends mom started accusing her caregiver of stealing. The family had known the caregiver for years and believed her when she blamed it on the mom's dementia. She worked out of my friends mom's home so when his sister heard about it she set up a nanny Cam and caught her taking money from her purse. Problem is that is illegal in most Nursing homes and Assisted living places.

Kathy, it perhaps depends on your mother’s level of dementia. If she is up to the stage where you agree and redirect, the advice is usually to say something like you have reported it and the police are following it up, but it will take some time as it is hard to get the evidence. You may also need to talk to the people who are being accused and ask for their tolerance. And of course, as Sparky said, be open to the chance that it is true. A simple check is to leave some small change in full view and see if it disappears.

Another method is to check the purse before and after visits, to isolate the time when money disappears. My sister did the ‘check the purse’ and found that a carer who was there while her husband died at home and then stayed to help her morning and evening, had stolen quite large sums of money. The agency sacked the worker, but didn’t want to take it to the police in order to protect their reputation. My sister is following it up, as otherwise the worker will simply move on to another agency. The carer was trusted and liked, and it was a very destructive breach of faith, as well as theft.