That's a tough one. I wouldn't judge your DH either way. I've dealt with someone close to me having a tbi and it was hell. It's them but it's not them, like their evil twin or something. If you think your DH could assume poa without getting "caught up in the drama" or enabling, and there is no other competent person, maybe give it your blessing. But, if his brother is capable (not necessarily perfect, but capable), and/or your DH is likely to have this situation run his life, it's a big "no". I mean, the brother does live there, has no job so unlimited time, and therefore would be more available for the duties. 

If not, that's the first step. 

I agree with the others, start with reporting the scam(s) and this particular problem could stop all by itself. 

My DH had a good friend overseas that fell for this crap. Met some woman on Skype. While I was able to do the research and give him facts he/she was a scammer, he never stopped sending money til the day he died. He did continue to pay his bills and live a decent life but the scammer did, too.

First thing is to call the cops, report the scam. As for your DH taking over, that is totally his call. I, too, am the "responsible" child out of the six kids. I did take over my mom's care for a while but then she got biligerent and demanded she do what she wanted with HER money and I had no right to tell her what to do with it. Along with some of her crazy decisions, I let go of the ropes. She moved in with my mooching brother (her scammer) and within 5 months, they wiped out all but $1200. That's what I was left with to do a funeral as mom passed away at that 5 month mark. It was sickening to know the money they wasted but that was on mom and my brother. Do I regret dropping the rope? Not at all. I did what I could. 

I'm sorry your DH is in this position. It's not a fun place to be.

I think that your DH should have a meeting with BIL.  

He needs to approach him with the possibility that BIL maintain DAY to DAY oversight of MIL and her finances.. BUT your DH will get regular (monthly? quarterly?) access to review the household finances... her income.. her payments.  That he is concerned but because BIL is there and getting a good benefit of having a place to live, it's in his best interest to keep his place to live and MIL in good standing.

He needs to tell BIL that the scam issue needs to be stopped and they need to get the police involved in that.  Perhaps APS could assist them in figuring out the POA issue.  Certainly.. with her TBI and now participation in this scam if push came to shove, they may be able to get control whether she likes it or not.  I would also see what options there are to take her DL and BIL needs to maintain control of car keys.

I know BIL doesn't sound ideal, but if your DH doesn't want to get directly involved... it's possible it might work if BIL was assured that he wouldn't get in trouble if your DH was at least reviewing the finances.  And.. if he does do something underhanded.. it could be discovered sooner.  

I work with seniors as a social worker for the state. The police likely won't do anything, but APS likely would. Anyone can file an intake report for financial exploitation. Your BIL cannot just take POA of MIL. Did MIL appoint BIL as POA? If so, BIL will still need letters of activation from two physicians deeming her incompetent in managing her own affairs to make that DPOA active and legal. If there is nothing formal or a physician won't deem MIL incompetent, then someone needs to petition the courts for conservatorship to manage MIL's assets. That could be DH, BIL, or even a public conservator (i.e. attorney or accountant). A judge would rule to order a conservator - honestly, they would probably appoint DH over BIL due to the criminal history. The process to appoint a conservator is pretty cut and dry and is nothing like family court - it's very quick and usually painless (unless there is family drama and multiple petitioners). 

DH's "ex" stepdad (MIL divorced him financial reasons only so he's still part of the family sorta but they don't reside together,  I prefer to not associate with him) is  a gullible stubborn self centered a-hole without a TBI and is participating in this same scam. I'm pretty positive the police are aware because they showed up at a store he was buying gift cards at and took his phone but he has it back. So I don't know what's going on there.  BIL did contact senior services . Only thing I know that's happened with that is he told the social worker to f off and he can take care of himself.

He feels it's a victimless crime and they are his friends and he doesn't plan on stopping.

Is the scam that, the scammer sends money to mark's bank account and the mark goes to buy gift cards and gives them to the scammer?  If I've read this right, it isn't just a scam.  Its money laundering and could eventually leave the mark without a bank account if the bank don't want to be used as a money laundering vehicle.

I just wrote you about a resource who can help.