THE HALF-MILLION DOLLAR CAPER

A million dollars scattered around.

The case of Valdez v. Hollenbeck is a cautionary tale indeed.

Pierre V. Bernard died on January 25, 1994. He did not have a Will.

Two days later, attorney Robert Valdez applied to be appointed the administrator of Bernard’s estate. He was appointed as administrator and filed a surety bond. Then Valdez filed an inventory that valued Bernard’s estate at $411,000, and listed accounts at 5 different financial institutions. However, a CPA later filed a tax return for Bernard that listed accounts at 10 different institutions. The difference between the inventory and the actual accounts amounted to more than half a million dollars.

Valdez never amended his inventory to show the additional assets. Instead, he paid off some bills, distributed the remaining assets from the original inventory, and the probate case was closed in 1996.

Now we come to Melvyn Spillman, a “rogue probate clerk” for Bexar County. It turns out that Melvyn had been stealing millions of dollars from Bexar County intestate probate estates, including Bernard’s estate.

Melvyn was eventually convicted for his wrongdoing, and a Receiver was appointed to take over his assets and sort out the mess. In 2003, the Receiver sent a letter to Bernard’s heirs notifying them of his conclusion that Melvyn had stolen $522,000 from Bernard’s estate, and that he could recover only $52,000 of it.

Eventually, Bernard’s heirs filed an application to re-open Bernard’s estate to pursue claims against Valdez.   The Supreme Court determined the heirs had waited too long, and denied their application.

How could this have turned out differently? Bernard could have executed a Will and named an independent executor. The probate court could have had better safeguards in place to prevent employee theft. The beneficiaries could have immediately filed to re-open the probate case instead of waiting 3 years after they learned of the theft.

But he didn’t, it didn’t, and they didn’t. A cautionary tale, indeed.

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The information contained in this article is general information only and does not constitute legal advice. ©2015