By Ray Stern
By Ray Stern
By New Times
By Amy Silverman
By Stephen Lemons
By Stephen Lemons
By Monica Alonzo
By Chris Parker
The orders describe how Elliston -- while serving as a conservator -- illegally took $9,782 on November 12, 1998, from the estate of Edward Black, an Ahwatukee man who died in May 1996 at the age of 78. Court records suggest that, with that money, Elliston caught up with her own delinquent house payments, barely forestalling foreclosure. (FSI was serving as the estate's court-appointed conservator because of a legal dispute among Black's heirs.)
On January 7, 1999, court documents indicate, Elliston illegally took another $11,026 from the Black estate, and paid an attorney for fees owed in an unrelated estate case.
Finally, last February 5, Elliston took another $7,000 from the Black estate, and deposited it into her company's bank account.
"This constituted dishonesty and fraud by Elliston and FSI," the court's order read, "and constituted a source of injury and loss to the public."
Says Fred Gamble, a Tempe attorney for Black's sister-in-law, Doreen Black: "If I were to be stealing from an estate, I wouldn't be stealing from one that had $1 million in diamonds. I'd steal from an estate that had money, cash, and that's all Mr. Black's estate had. What she did is called theft by embezzlement under [Arizona's] criminal code."
The Black estate isn't the only one Elliston may have pilfered, documents obtained by New Times suggest. Those documents indicate that at least 30 estates are missing thousands of dollars each.
Court officials agree that the Elliston affair has similarities to the mid-1990s scandal that landed powerful Mesa attorney Wayne Legg in prison for stealing from his aged clients ("As Helpless As Children," September 8, 1993). And, like the saga of Legg -- who pillaged estates from right under the noses of court commissioners -- the Elliston case raises troubling questions beyond the apparent thefts.
A New Times examination of more than 200 court files indicates that:
Probate Court officials learned as early as February 1997 that the Internal Revenue Service had placed a lien on FSI, claiming the firm owed more than $50,000 in federal taxes. This alone should have raised red flags about a company handling the money of its incapacitated and vulnerable clients. County Recorder's records also reveal a decadelong history of other IRS liens, and that, since 1992, Elliston narrowly had avoided foreclosure three times on her own home. One of those occasions came in November 1998, when she took money from the Black estate to pay her debts.
Despite that, the Probate Court -- with the exception of a brief moratorium in early 1998 -- kept feeding Elliston dozens of new cases, in addition to her slew of ongoing cases.
County court commissioners allowed Elliston and the attorneys with whom she worked great leeway to file annual reports late (sometimes by more than a year) and inaccurately. Even then, the commissioners with rare exception would approve the accountings and okay the requested fees. In one 1998 case, a commissioner approved Elliston's fees even after she submitted a plan for a client who was dead. "What are the anticipated care and services to be provided to the ward during the upcoming accounting period?" a written form asked Elliston. "Skilled care in a lockdown unit," she replied about her deceased client.
The Probate Court was derelict in the case of Gregory Maruda -- a developmentally disabled 50-year-old who lives at a Phoenix group home and is a ward of the court. Elliston, who was Maruda's guardian/conservator, didn't file annual accountings for nine years, and the court seemingly never noticed. An attorney for the home says Elliston continued to pay herself from Maruda's estate -- once valued at at least $100,000 -- during that time. That came to light last summer only after the attorney, Lawrence Marks, complained that Elliston hadn't been paying Maruda's rent for months, and wasn't returning phone calls about releasing funds so Maruda could be treated for a gum infection.
"We don't know at this moment how much he has left in the account," says Marks. "It certainly isn't what it should be."
Probate attorney Paul Harter -- who also has been analyzing Elliston's files -- told Probate Court officials in writing last October that between $10,000 and $40,000 from Maruda's estate is unaccounted for.
Apparently all but one estate for which Elliston and FSI were responsible was bonded. That means that the Public Fiduciary will ask the bonding companies to replenish the lost money, assuming the losses don't surpass the bond limits -- $105,000 in Maruda's case, for example.
The process, however, is time-consuming, and no one is likely to be reimbursed soon. If and when that does happen, the bonding companies would have the option of trying to collect money from Nancy Elliston and FSI.
Though almost everyone at the Probate Court seems stunned by Elliston's demise, insiders wonder how the attorneys with whom she worked for years knew nothing of her financial woes. (Private fiduciaries like Elliston who aren't lawyers must hire attorneys to file legal paperwork and to represent them in court.)
Elliston and FSI generated about two-thirds of attorney Charles Dyer's business, those insiders say, and the pair also are good friends. As an officer of the court, Dyer, among others, had a legal duty to inform judges and commissioners if he had known about Elliston's problems.