I have POA for my father. Can I transfer his funds into another account in my name legally?

Yes, go to the bank and bring the original POA agreement with you as they will want to see it. The POA designation is quite strict and the usual procedure would be to change the registration of your Dad's existing account to include you as the "POA" enabling you to write/sign checks for him. You cannot put his money in your name in a separate account as you described, because the money does not belong to you. Every cent you manage for your Dad has to be legitimate expenditures made only on his behalf (such as his bills and personal needs, medical expenses, etc). You should keep very good documentation on your time, duties and expenses paid out. Another important point, anything you sign for him, including the checks, medical authorizations, any documents at all - should state the letters POA after your signature. There is some very good information on this site that you might want to check out under the Money & Legal tab about POA issues.

Go to the bank and ask them, that's what I'd do.