Fighting the touchy battle of estate theft

Tony Plohetski (tplohetski@statesman.com; 512-445-3605)
December 10, 2006
Austin American-Statesman (TX)

Texas law calls stealing from a dead person’s estate “misapplication of fiduciary property.” Bexar County Probate Judge Tom Rickhoff calls it plain old theft. Rickhoff, a former federal prosecutor who took office in 2001, has been one of the state’s most aggressive probate judges when he suspects estate theft. He says he has referred dozens of potential cases to prosecutors.

“The culture here was that all the civil lawyers thought every dispute about where money went is a civil matter that should be resolved in a lawsuit,” Rickhoff said. “It was clear to me that if you take a diamond ring and give it to someone (else), you stole the diamond ring.

“It is without authority,” he said. “You just stole someone else’s property.”

But Rickhoff appears to be one of the few people in the probate system willing to speak up when he suspects estate theft.

People accused of the crime are seldom investigated by law enforcement, an Austin American-Statesman review of Texas’ probate system has found. Indictments and arrests are rarer still, according to probate lawyers, judges and prosecutors from across Texas.

No agency or organization tracks how often allegations of estate theft or mismanagement result in criminal investigations.

But Dallas probate lawyer David Pyke, who has won multimillion-dollar settlements against executors, said estate cases are handled in civil court “almost 100 percent of the time” when they come to light.

Probate lawyers say heirs are often reluctant to send law enforcement after the friend or family member chosen by their departed loved one to oversee their will.

Those same lawyers say they commonly advise heirs not to go to police, saying they prefer to file lawsuits instead.

State Bar rules don’t require civil lawyers to tell law enforcement about suspected theft.

“They put the person you are suing in jail, which may be a good thing for society, but doesn’t get you any money,” Pyke said. “They can’t make money in jail.”

David Blackburn said he heard the same reasoning when his lawyer discouraged him from alerting police years ago after, according to records, a lawyer funneled an unknown amount of money from a trust set up for him after his mother’s death to a business venture.

He did, however, complain to the State Bar, which revoked San Antonio lawyer Larry Hood’s license. Hood, who is barred from ever practicing in Texas again, could not be reached for comment. “I would still like to see him in jail, or at least not in a position to hurt anybody,” Blackburn said.

Prosecutors often view estate theft cases as time-consuming and complicated, requiring expertise in following money trails, said Texas Assistant Attorney General David Glickler.

Glickler earlier this year was asked to help investigate and prosecute a disbarred Nueces County attorney and another man after they were accused of diverting about $400,000 from the estate of an elderly man in a coma. The two were convicted last month of misapplication of fiduciary property.

Nueces County District Attorney Carlos Valdez said he asked for help from the attorney general’s office because the case “involved many, many documents that needed to be reviewed, and we needed expertise that we didn’t have in this office.”

Texas probate judges are often in the best position to learn about possible estate theft, but they don’t agree about what they should do in those instances.

Travis County Probate Judge Guy Herman said he has referred several cases in which he had “convincing” evidence someone broke the law to prosecutors over the years. If he’s not sure there’s hard evidence of theft, he said, he may suggest to family members that they report their suspicions.

“I don’t want to get real involved in it,” he said. “If I have parties in front of me, there is no reason they can’t go to the district attorney. My job is to try the case and deal with the case.”

Herman said he did take action in the case of Austin lawyer Terry Stork after receiving a letter from Rickhoff, who suspected Stork of mishandling several estates. Herman said he was worried that heirs named in wills Stork was handling might not know they had an inheritance, so he forwarded Rickhoff’s letter to the Travis County district attorney’s office.

Stork was indicted in September on two counts of misapplication of fiduciary property and theft in two Travis County estate cases.

El Paso County Probate Judge Max Higgs tries to avoid what he calls “judicial activism” by finding other ways to make sure law enforcement learns of possible estate theft.

In six or seven such cases, Higgs said, he has appointed a new estate administrator, generally a lawyer, and ordered him or her to notify police or prosecutors if they suspect a crime.

Larry Kolvoord AMERICAN-STATESMAN

Travis County Probate Judge Guy Herman says families should go to a district attorney if they suspect an estate is being mishandled.

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