Eleanor "Dorothy'' Thomas of Tempe lived a good, long life as a minister's wife. She taught high-school English, helped others, loved dogs and always was ready to debate politics until she died last summer at age 94.
But court records and Thomas' confidants point to one major mistake she might have made in her life — hiring Rodney M. Matheson, a now-disbarred Queen Creek probate attorney, to handle her estate.
About $1.2 million of Thomas' estate was supposed to go to a University of Arizona cancer research fund in memory of Dorothy and her late husband, David. But the money never was paid to the University of Arizona Foundation, according to court records.
Matheson, 69, was disbarred in September 2013 and arrested by Gilbert police in February. He is charged with two counts of fraudulent schemes and two counts of theft, with investigators accusing him of misappropriating as much as $6 million.
Prosecutors accused Matheson of orchestrating an elaborate shell game by taking money from two estates to satisfy a court order for payment of $800,000 to the Mayo Clinic, the major beneficiary of a third estate, according to court documents.
Lawyers are fighting in the courts for repayment of funds to the proper beneficiaries, if the money can be located. And Lee Stein, Matheson's new criminal attorney, has received more time to evaluate the complicated case and challenge his indictment.
Stein said it would be inappropriate to comment while a criminal case is pending.
Bonnie Rabin of Tucson said Thomas recommended Matheson to all her friends at Friendship Village, an upscale retirement community in Tempe.
"She was so thrilled with him. She said, 'He doesn't even charge me,' " Rabin said.
But Thomas and other clients could not have envisioned the misconduct Matheson is accused of committing while handling their trusts.
A Gilbert police detective estimated that as much as $6 million was stolen from three trusts and beneficiaries of deceased people. Attorneys working on the case unraveled the alleged thefts by subpoenaing an escrow account that probate lawyers use in administering estates and by combing through financial records, according to court documents. But even they concede that no one knows for certain how much money might have been misappropriated.
Matheson has been released on a $1 million bond and has a trial date set in October.
The case against Matheson started to emerge when Mayo Clinic filed a civil suit to collect $1.2 million left to the hospital as a beneficiary by the Mary Jane Schalow Trust. Maricopa County Superior Court Commissioner Rick Nothwehr started asking questions, as did Judge Andrew Klein, who took over the case.
Court records say Nothwehr and Klein were not satisfied with Matheson's answers on how he administered the trust. Klein eventually instructed Clare Black, a Gilbert attorney who discovered the reported misappropriations after she subpoenaed Matheson's financial records, to file a State Bar of Arizona complaint against Matheson, in addition to filing a police report, according to records.
At one point, Nothwehr ordered Matheson to make an $800,000 payment from the Schalow Trust to the Mayo Clinic, according to court documents.
The state Bar investigation found that more than $1 million had been depleted from the Schalow Trust by Matheson, Arizona Assistant Attorney General Joseph Waters wrote in court documents.
Wells Fargo bank records show "the defendant wrote himself checks totaling $988,231.40 as fees for work he claimed to complete for his various clients," even though an audit found he should not have received most of the fees, Waters wrote.
Matheson was acting as an attorney for St. Paul, Minn., resident Roger Manthey in late 2007 or early 2008 when Matheson told Manthey that administration of the trust was virtually complete, according to records.
But Manthey ended up as the initial target of Mayo's efforts to collect the money and Nothwehr issued a fiduciary warrant for his arrest at one point. Manthey wrote in court records that he had no idea that Mayo never received the money from his aunt's estate —or that he had been sued— because Matheson never informed him.
Manthey declined comment, citing the criminal case against Matheson, but he made his feelings clear in court records that are included in the probate case.
"This whole experience has been very troublesome to me," Manthey wrote. "I am unable to sleep, and I have a constant knot in my stomach. I am a well-respected, retired school teacher who has always tried to do the right thing."
When a court commissioner ordered Matheson to verify that Manthey was the source of a $500,000 payment to the Mayo clinic, Matheson produced a letter from Manthey as affirmation, but Manthey had no idea what was going on in Arizona, according to records.
"Mr. Matheson went as far to create a false letter from Mr. Manthey that he placed in his file that was allegedly provided with the $500,000 payment," Black wrote in the Bar complaint.
Instead, Matheson used funds from the Loehndorf Trust, another estate he administered, to make a $500,000 payment to the Mayo Clinic, according to Waters' court document. Suspicious about the source of the money, Mayo Clinic eventually turned over the funds to Superior Court for safekeeping, according to court documents. A spokesman for the Mayo Clinic declined to comment.
The courts are now attempting to sort out where all the money went and to return it to the rightful owners. On March 12, Klein ordered $337,500 that was misappropriated from the Loehndorf Trust returned to its owners.
The criminal charges against Matheson are unrelated to the Thomas Trust, which was left to the cancer research fund. Tucson attorney Lindsay Brew, who represents the University of Arizona Foundation, wrote in court documents that Matheson also misappropriated $1.2 million from the Thomas Trust to pay off his debts from the depleted Schalow Trust to Mayo Clinic.
Brew wrote in court records that he is seeking repayment of $162,500 that he says was misappropriated from the Thomas Trust. Brew also is arguing that Matheson filed a bogus addendum to Thomas' will shortly before her death, cutting out the University of Arizona and naming Matheson as beneficiary.
Tom Asimou, a probate attorney not involved in the Matheson matter, said he has seen similar cases every few years and his advice is simple:
■ If you don't think your attorney is giving a straight answer, get another attorney to take the matter before a judge
■ Name a bank as either trustee or personal representative of the trust
■ The bank will charge a fee but it also provides protection against stolen funds
"People get penny-wise and pound foolish with these things," Asimou said.
But court records and Thomas' confidants point to one major mistake she might have made in her life — hiring Rodney M. Matheson, a now-disbarred Queen Creek probate attorney, to handle her estate.
About $1.2 million of Thomas' estate was supposed to go to a University of Arizona cancer research fund in memory of Dorothy and her late husband, David. But the money never was paid to the University of Arizona Foundation, according to court records.
Matheson, 69, was disbarred in September 2013 and arrested by Gilbert police in February. He is charged with two counts of fraudulent schemes and two counts of theft, with investigators accusing him of misappropriating as much as $6 million.
Prosecutors accused Matheson of orchestrating an elaborate shell game by taking money from two estates to satisfy a court order for payment of $800,000 to the Mayo Clinic, the major beneficiary of a third estate, according to court documents.
Lawyers are fighting in the courts for repayment of funds to the proper beneficiaries, if the money can be located. And Lee Stein, Matheson's new criminal attorney, has received more time to evaluate the complicated case and challenge his indictment.
Stein said it would be inappropriate to comment while a criminal case is pending.
Bonnie Rabin of Tucson said Thomas recommended Matheson to all her friends at Friendship Village, an upscale retirement community in Tempe.
"She was so thrilled with him. She said, 'He doesn't even charge me,' " Rabin said.
But Thomas and other clients could not have envisioned the misconduct Matheson is accused of committing while handling their trusts.
A Gilbert police detective estimated that as much as $6 million was stolen from three trusts and beneficiaries of deceased people. Attorneys working on the case unraveled the alleged thefts by subpoenaing an escrow account that probate lawyers use in administering estates and by combing through financial records, according to court documents. But even they concede that no one knows for certain how much money might have been misappropriated.
Matheson has been released on a $1 million bond and has a trial date set in October.
The case against Matheson started to emerge when Mayo Clinic filed a civil suit to collect $1.2 million left to the hospital as a beneficiary by the Mary Jane Schalow Trust. Maricopa County Superior Court Commissioner Rick Nothwehr started asking questions, as did Judge Andrew Klein, who took over the case.
Court records say Nothwehr and Klein were not satisfied with Matheson's answers on how he administered the trust. Klein eventually instructed Clare Black, a Gilbert attorney who discovered the reported misappropriations after she subpoenaed Matheson's financial records, to file a State Bar of Arizona complaint against Matheson, in addition to filing a police report, according to records.
At one point, Nothwehr ordered Matheson to make an $800,000 payment from the Schalow Trust to the Mayo Clinic, according to court documents.
The state Bar investigation found that more than $1 million had been depleted from the Schalow Trust by Matheson, Arizona Assistant Attorney General Joseph Waters wrote in court documents.
Wells Fargo bank records show "the defendant wrote himself checks totaling $988,231.40 as fees for work he claimed to complete for his various clients," even though an audit found he should not have received most of the fees, Waters wrote.
Matheson was acting as an attorney for St. Paul, Minn., resident Roger Manthey in late 2007 or early 2008 when Matheson told Manthey that administration of the trust was virtually complete, according to records.
But Manthey ended up as the initial target of Mayo's efforts to collect the money and Nothwehr issued a fiduciary warrant for his arrest at one point. Manthey wrote in court records that he had no idea that Mayo never received the money from his aunt's estate —or that he had been sued— because Matheson never informed him.
Manthey declined comment, citing the criminal case against Matheson, but he made his feelings clear in court records that are included in the probate case.
"This whole experience has been very troublesome to me," Manthey wrote. "I am unable to sleep, and I have a constant knot in my stomach. I am a well-respected, retired school teacher who has always tried to do the right thing."
When a court commissioner ordered Matheson to verify that Manthey was the source of a $500,000 payment to the Mayo clinic, Matheson produced a letter from Manthey as affirmation, but Manthey had no idea what was going on in Arizona, according to records.
"Mr. Matheson went as far to create a false letter from Mr. Manthey that he placed in his file that was allegedly provided with the $500,000 payment," Black wrote in the Bar complaint.
Instead, Matheson used funds from the Loehndorf Trust, another estate he administered, to make a $500,000 payment to the Mayo Clinic, according to Waters' court document. Suspicious about the source of the money, Mayo Clinic eventually turned over the funds to Superior Court for safekeeping, according to court documents. A spokesman for the Mayo Clinic declined to comment.
The courts are now attempting to sort out where all the money went and to return it to the rightful owners. On March 12, Klein ordered $337,500 that was misappropriated from the Loehndorf Trust returned to its owners.
The criminal charges against Matheson are unrelated to the Thomas Trust, which was left to the cancer research fund. Tucson attorney Lindsay Brew, who represents the University of Arizona Foundation, wrote in court documents that Matheson also misappropriated $1.2 million from the Thomas Trust to pay off his debts from the depleted Schalow Trust to Mayo Clinic.
Brew wrote in court records that he is seeking repayment of $162,500 that he says was misappropriated from the Thomas Trust. Brew also is arguing that Matheson filed a bogus addendum to Thomas' will shortly before her death, cutting out the University of Arizona and naming Matheson as beneficiary.
Tom Asimou, a probate attorney not involved in the Matheson matter, said he has seen similar cases every few years and his advice is simple:
■ If you don't think your attorney is giving a straight answer, get another attorney to take the matter before a judge
■ Name a bank as either trustee or personal representative of the trust
■ The bank will charge a fee but it also provides protection against stolen funds
"People get penny-wise and pound foolish with these things," Asimou said.
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