Bookkeeper in Estate Fraud Case Enters Guilty Plea
A bookkeeper pleaded guilty and a lawyer pleaded not guilty Wednesday to charges they participated in the embezzlement of more than $750,000 from the estates of 23 people who were too old or infirm to handle their own financial affairs.
The prime suspect in the massive fraud case--a court-appointed conservator--has been arrested at her home in Tennessee and is not fighting extradition to Riverside, authorities said Wednesday.
An employee of the conservator’s company, which is based in Riverside, was charged with being an accessory to the embezzlements and will be arraigned Friday.
The four were charged this week following a seven-month-long investigation by the Riverside County district attorney’s office into allegations that conservator Bonnie J. Cambalik took hundreds of thousands of dollars from mentally and physically frail clients whose estates she managed.
“This case exposes greed at its worst,” said Riverside County Dist. Atty. Grover Trask. “These suspects preyed upon defenseless elders in our community. They betrayed a sacred trust, demonstrating contempt for the system designed to protect some of our most powerless citizens.”
Cambalik was charged with embezzlement by a caretaker, conspiracy to commit grand theft and perjury. She faces up to 16 years in prison if convicted.
Her Riverside attorney, Michael J. Molloy, who signed court documents attesting to the accuracy of Cambalik’s estate management, pleaded not guilty Wednesday to charges of grand theft, conspiracy to commit grand theft and subornation of perjury. If convicted, he faces a maximum prison term of 15 years.
Both Cambalik and Molloy were being held on $700,000 bail.
On Wednesday, Diana Marie Mikol, Cambalik’s bookkeeper, pleaded guilty to one count of grand theft and promised to cooperate with investigators and repay the estimated $30,000 she said she received from Cambalik, in order to avoid a maximum five-year prison sentence. Her mother, Ramona Lynn Saenz, will be arraigned Friday on charges of being an accessory to embezzlement, a felony. Both Mikol and Saenz remained free on their own recognizance.
Prosecutors allege that Cambalik and Molloy paid themselves excessive and unauthorized conservator and attorney fees from the estates assigned to Cambalik’s company, West Coast Conservatorships. They also were accused of selling clients’ assets without approval, and sharing the profits among themselves and the two office workers.
One example, according to prosecutors, was the sale of $265,000 in stock owned by the estate of a client who died. After the proceeds of the sale reached the bank account of Cambalik’s company, she used some of the proceeds to pay “cash bonuses for all the suspects,” according to prosecutors.
Prosecutors also allege that Cambalik maintained a “slush fund” in which she illegally shifted funds among conservatees to “pay back” other clients for past embezzlements before those thefts could be discovered.
Since 1986, Cambalik was assigned by Riverside Probate Judge William Sullivan to manage about 300 estates. Due to the statute of limitations and other legal constraints, investigators only reviewed cases she handled since November 1995, and charged illegal activities involving 23 estates, said Deputy Dist. Atty. Edward Kotkin, the prosecutor assigned to the case. He would not say how many estates were reviewed.
Kotkin refused to speculate on the total number of possible victims. “We won’t say when we believe the criminal activity began, but it was more than what we alleged,” he said. “She was in business since 1986. You do the math.”
Charges were brought in the 23 cases because they are “eminently provable” and can be clearly presented to a jury, he said.
The victims were people who had been found by the judge to no longer be able to handle their own affairs, typically because they were mentally or physically incompetent, but who had sufficient assets to pay for a private, court-appointed conservator--Cambalik. (Indigent clients are handled by the county’s public guardian.)
The county’s public defender’s office is assigned as a watchdog on behalf of many of the conservatees, to ensure that their estates are properly managed by private conservators. However, the alleged embezzlements by Cambalik were not detected by the defender’s office and probate investigators.
When the allegations surfaced against Cambalik, the county Board of Supervisors ordered Public Defender Margaret Spencer to place on leave the staff members who were assigned to monitor Cambalik’s cases. When Spencer refused, she was fired.
Her replacement, Gary Windom, said Wednesday that his office had been unable to discover the alleged embezzlements “because sophisticated fraud is undetectable.”
To better prevent further frauds, Windom said he hopes to hire a supervisor whose sole job would be to conduct spot checks of various conservatorships.
The current charges, however, were triggered when irregularities in estates handled by Cambalik were discovered in public files. Others who have reviewed them said some of the thefts should have been easily detected with simple accounting.
The initial accusations of wrongdoing by Cambalik were made by another private conservator in Riverside, Terence Loughran, who said he questioned Cambalik’s paperwork. He said his complaints fell on deaf ears locally--including a grand jury investigation that did not lead to any indictments, and his concerns ultimately were forwarded to Barbara Jagiello, a San Francisco probate attorney.
Jagiello conducted her own investigation and earlier this year forwarded her findings to Riverside County officials, sparking the criminal probe.
“I’m elated,” Jagiello said Wednesday of the arrests. “This has been a very long road.”