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Gail Oliver in her Saratoga, Calif. home Friday, July 20, 2012. Oliver is one of the victims of...



SAN JOSE -- Before he died, Saratoga veterinarian John Oliver left his life savings for his children and wife of four decades, and set aside tens of thousands of dollars for charities around the globe.
Now, roughly $1.5 million of that money is gone. The Olivers are among dozens of victims scrambling to recoup a combined $17.3 million that vanished from trust funds overseen by Christine Backhouse, a well-known Silicon Valley estate manager. Her longtime boyfriend and former office controller Leo "Josh" Kennedy is accused in court records of secretly wiring millions of dollars from her clients' accounts.
"They've stolen from my father's legacy," said Karee Oliver, a Seattle biologist. "He was trying to leave a bulk of his estate to Mother Teresa and Doctors Without Borders -- that's who they've stolen from."
Public records reveal Kennedy purchased a $1.2 million luxury home adjacent to a Snoqualmie Ridge golf course in Washington state in 2010, the same year his name appeared on unauthorized wire transfers from the Heritage Bank of Commerce in San Jose. The transfers shifted trust funds to a new company, Orions Digital Technologies of Bellevue, Wash.
When Karee Oliver paid a visit to the firm's Bellevue address shortly after the wire transfers were exposed, she said she found the office empty.
Meanwhile, frustration and anger is high among the family members connected to dozens of trusts overseen by Backhouse, a Campbell fiduciary
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serving the South Bay. Many will appear in court Wednesday for an update on a legal plan to recoup the stolen funds. And some wonder why Backhouse is still licensed to do business -- given the devastating losses and an ongoing FBI investigation. According to claims in probate court records, 35 trusts handled by Backhouse Fiduciary Services have been looted.
The estate of John Oliver, who prepared a trust before he died at 84, is among those most affected. When Oliver's widow, Gail, learned the money was gone this year, she confronted Backhouse, saying, "Christine, how could you do this to us?" she recalled. "She said she knew nothing about it, that he did all the accounting."
Now, Oliver and other victims say they have difficulty accepting that Backhouse -- a state-licensed fiduciary who oversees $104 million in other people's money -- did not better monitor her bank statements, as funds were bled in 49 separate wire transfers over two years.
"We feel as a trustee she should have been checking all this but she wasn't," Gail Oliver said. "I would love to have Christine put out of business."
Backhouse, who has denied interview requests, has not been accused of a crime, and she is cooperating with the FBI investigation. No arrests have been made.
A spokesman for the state agency that licenses estate managers, known as fiduciaries, said there is no evidence so far compelling officials to suspend Backhouse's license.
"Our investigation is taking a back seat to the federal investigation because they're investigating a crime," said Russ Heimrich, a spokesman for the California Department of Consumer Affairs. A licensing decision will be made only after his agency gains access to materials the FBI has uncovered in its investigation, he added.
In court records, Backhouse maintains she only learned in February about the unauthorized wire transfers signed by Kennedy in 2010 and 2011. She told authorities she became suspicious after noting inconsistencies between her bank statements and her office's internal record-keeping program. Backhouse says when she confronted Kennedy, he fled.
And because she only had $1 million in insurance, she has turned to an international law firm that specializes in white-collar crime, Cotchett, Pitre & McCarthy, to track down the embezzled funds.
"The proactive steps that Ms. Backhouse has taken to recover the misappropriated funds demonstrate her commitment to doing everything she can possibly do to make the beneficiaries whole," Backhouse's attorney Andrew Watters stated in an email.
But friends and family members whose funds were embezzled want more done.
"All of Backhouse's financial dealings need to be thoroughly investigated," said April Halberstadt, who worked with the Campbell trustee to manage the estate of a mutual friend dying of bone cancer, but now laments Backhouse's involvement.
Another Backhouse client, Saratoga property manager Linda Houston, said she's not waiting around for something to happen with her estate. Houston said she intends to remove Backhouse as her designated trustee.
"In short order I'm going to be redoing my trust and I'm going to put it in the hands of one of my kids and then have them slug it out," Houston said. "I feel that she was hardworking and I'm going to use the word 'honest' -- at the same time I feel her license should be pulled. I really feel that there were clues there that she wasn't picking up on."