If true, this is an ugly awful tale in which a lawyer, Robert M. Stephenson, stole from trusts established by his parents for the benefit of his own children. The key allegations are set forth in the complaint:
“1. In May 2007, Respondent agreed to serve as trustee of the Robert McCreary Stephenson and Martha LaFon Stephenson Annual Exclusion Gifting Trust (“the children’s trust”), which had been created and funded in Florida at that time by Respondent’s parents, Robert McCreary Stephenson and Martha LaFon Stephenson.
2. In May 2007, the beneficiaries of the children’s trust were Respondent’s minor sons, Madison and Jack, who were 13 and seven years old, respectively.
3. As trustee of the children’s trust, Respondent owed fiduciary duties to his parents, and to Madison and Jack, including a duty to exercise the utmost good faith and fair dealing in all of his transactions involving the trust’s assets, a duty of undivided loyalty, a duty of care and a duty to avoid using trust assets for Respondent’s own personal or business purposes.
4. The children’s trust agreement contained a provision requiring that the trust’s income and principal “be used only for the personal benefit of the designated beneficiaries of the trust,” and prohibiting distributions or expenditures of trust assets “except to or for the benefit of a trust beneficiary.”
5. The children’s trust agreement contained a provision prohibiting either Madison or Jack from withdrawing from the trust principal until he reached age 30.
6. At all times alleged in this complaint, the assets of the children’s trust were held at the Charles Schwab Bank in trust accounts with account numbers ending in the four digits 5802 and 3649 (“the Schwab trust accounts”).
7. On October 10, 2011, Respondent’s father, Robert McCreary Stephenson, died. After that date, Respondent’s mother, Martha LaFon Stephenson, communicated with Respondent regarding the children’s trust and the Schwab trust accounts.
8. As of July 24, 2013, the total balance in the Schwab trust accounts for both children was $230,591.16.
9. On July 24, 2013, Respondent drew check numbers 1358470 and 1358471, which were drawn on Charles Schwab Bank account numbers 5802 and 3649, respectively, and which were made payable to the order of Respondent, as trustee of the children’s trust, in the total amount of $230,591.16, from the accounts, leaving a balance of $0 in each account.
10. On July 24, 2013, Respondent deposited check numbers 1358470 and 1358471 into his JPMorgan Chase “Platinum Checking” account bearing an account number with the last four digits “4318.” Chase account number 4318 was titled “Robert M. Stephenson,” and was one of Respondent’s personal checking accounts.
11. In the weeks following July 24, 2013, Respondent used the entire proceeds of check numbers 1358470 and 1358471 for his own personal purposes, largely for personal travel and casino gambling.”
Please note that these allegations have not been established at a trial.
Edward X. Clinton, Jr.