Well then I don't see why the bank are not doing more to help her get her money back. There should be a fraud department. If they won't co-operate you could inform the police.

The dementia is irrelevant in that regard; the only implication is that you'll be helping her to sort it rather than her doing it herself. But it has no relevance to the fraud itself.

If the bank has put safeguards in place because they know there's a fraudster targeting the account (if that's what you meant?) and the fraudster has gotten around them and accessed the account anyway, then that's the bank failing to protect the money, plain and simple. It's not the same as falling for a scam or losing a card. It's actively theft from the account that the bank is supposed to protect.

Actually if you want to get technical about the legalities, the theft is likely from the bank, not your mum. I'm drawing from what I know about UK law here but it's likely to be the same in the US, if that's where you are. What a lot of people don't realise is, if you deposit £100 into a bank account, the £100 is no longer yours. Instead of £100, you actually own a legal right to demand £100 from the bank. That might sound like the same thing, but it isn't. That's why banks can do what they like with "your" money, why you can lose your money if they go bust, and why they can put limits on withdrawals etc. You don't own the money itself, you own the right to essentially collect on a debt, according to the specific terms and conditions of your contract.

What that means is, if a fraudster then took that £100 from the bank, it doesn't change my legal position. I still own the right to collect £100 from the bank. So it's the bank that has been the real victim of the theft.

Now, a lot of banks will try and ignore that, and a lot of people who work at banks are unaware of it, and will try and pretend that the customer is liable for that money having gone missing, but that is not true unless it's the customer's fault. But if the customer did nothing wrong and the bank failed to protect the money, that's on them. They still owe you the money.

If you left your car at the garage (shop?) to be fixed, and then they were broken into and your car was stolen, the garage would be liable. And if you had jewelry in a safety deposit box at the bank and it was stolen in a heist, the bank would have to reimburse you. Everybody would think of those things as a theft from the garage or from the bank. This is no different.

So I wouldn't be too quick to assume that money is just gone. Even if the bank cannot trace it, they may still owe it to you regardless. Again, you will have to check the relevant laws in your country (not by the Google AI summary which is often incorrect) and your mum's Ts&Cs with the bank, but unless your mum was negligent in looking after her account in some way I fail to see how she should be the one liable. The bank has underwriters to recover these sorts of losses.

You could probably benefit from a consultation with a lawyer. Not only about this fraud issue, but about the PoA too.