Copyright © 2017 Albuquerque Journal
A state district judge has called a temporary halt to the sale, transfer or disposal of any properties improperly purchased with funds from client accounts at Desert State Life Management trust company.
In her order, Chief Judge Nan Nash also freezes any use or liquidation of Desert State funds in any accounts until an Aug. 3 hearing on whether the nonprofit company should be placed into receivership with the state. Nash’s order didn’t mention Desert State CEO Paul Donisthorpe or Liane Kerr, his wife of 31 years, who divorced him last month.
The order issued Tuesday also was worded to keep the Social Security and other regular income payments flowing to the 14 or so clients who relied on Desert State as their personal representative payee. Payments will need the approval of acting Financial Institutions Division chief Chris Moya.
The decades-old Albuquerque trust company is under state and federal scrutiny after a state financial examination several months ago revealed that a minimum of $4 million in client trust funds were missing, ending up in personal and business accounts controlled by Donisthorpe.
Nash’s order was the first significant court action since state regulators revealed on May 31 that an estimated 70 clients, some elderly, others with mental or physical disabilities, may have lost all or some of their trust funds managed by Desert State.
A key property affected by Nash’s order is the Donisthorpes’ Angel Fire “luxury lodge” that had been put up for sale at a below market price in recent months. The lodge, once appraised at about $925,000, was reduced for a quick sale to $725,000 by early June.
The home, which Donisthorpe received in the divorce settlement last month, has been taken off the market, according to a real estate agent for Re/Max. The FBI contends Desert State client trust funds were used to help purchase the property and others in a criminal scheme to defraud clients.
The U.S. Attorney’s Office in Albuquerque included the Angel Fire property in its June petition for forfeiture of three properties owned or controlled by Donisthorpe, including a Texas cattle ranch. The petition is still pending.
It wasn’t clear Thursday whether any furnishings or personal property from the Angel Fire lodge are still for sale at an Albuquerque consignment store. Court records alleged Kerr took two trailers filled with items from the cabin to the store some months back. No one from the store returned Journal phone calls seeking comment about the status of the items or whether the store management knew of Nash’s order.
“The FID continues to work to alert all relevant individuals and companies as to the pending litigation and the court’s orders related to this company,” said Alex Sanchez, deputy secretary of the state Regulation and Licensing Department, which oversees the FID. “The examination of this company is ongoing, and the FID cannot comment further at this time regarding other findings or facts of that examination.”
A new filing this week alleged that Kerr had complained about her financial situation in recent months, noting that she had to sell her jewelry and dismiss a regular handyman to make ends meet. The jewelry was allegedly purchased with funds taken by her husband from client accounts, the filing alleged.
Corrales Mayor Scott Kominiak, who is a friend of Donisthorpe’s, is still expected to be involved in Desert State operations at least until the Aug. 3 receivership hearing.
Kominiak, according to court filings, was asked by Donisthorpe’s then-wife, Kerr, a criminal defense attorney, to help out with the state financial examination after Donisthorpe in February reportedly tried to commit suicide by overdosing on prescription medication. The reported suicide attempt came just days before state financial examiners were to begin their on-site examination of Desert State accounts.
Donisthorpe, who reportedly suffered brain damage and memory loss from the overdose, has not returned Journal requests for comment.
Meanwhile, the Corrales Comment newspaper reported June 27 that it asked Kominiak for a statement about his involvement in the Donisthorpe matter.
According to the newspaper, Kominiak sent the following on June 13: “Paul Donisthorpe and his wife, Liane, have been friends of my family for many years. I have always known him to be an honest and astute businessman. Liane informed me that Paul had medical problems, and so I volunteered to assist the State with what I thought was a routine examination of the company. After reviewing some of the records, I contacted the State to let them know there may be issues that require further investigation or management. I have continued to support that effort as well as attempting to make sure that the beneficiaries’ needs are met, where possible, until a receiver is appointed.”
Kominiak, a businessman, has not returned Journal requests for comment.