San Benito County District Attorney Candice Hooper for more than a year declined to investigate complaints that county school board President Mitchell Dabo drained a charitable trust of more than $640,000.
The Community Foundation for San Benito County turned to Hooper last year, after deciding to file a lawsuit against Dabo in late 2015, seeking to locate hundreds of thousands of dollars missing from the Matulich Charitable Trust.
“We wanted to impress her of the seriousness of it—our board requested a criminal investigation,” said Gary Byrne, the foundation’s executive director.
Undeterred, the foundation invited the district attorney to a foundation board meeting, so it could press its case for a criminal investigation.
Again, she declined.
“She said she didn’t have the resources or enough evidence for a criminal case,” said Byrne, recalling the meetings with Hooper.
The district attorney “recommended we go to the police department and ask them for a special investigator,” said Phil Fortino, the local Rabobank vice president who is chair of the foundation’s board of directors.
“It is a serious case,” Fortino said last week. “I think it warrants an investigation.”
“Now that it’s been exposed, there are others who have said they have a similar experience,” he said.
On Nov. 13, Superior Court Judge Marjorie L. Carter ruled in favor of the foundation in its suit against Dabo, owner of a Hollister liquor store and president of the San Benito County Board of Education.
Carter affirmed the facts presented by foundation lawyer John Clark, that Dabo systematically drained more than $640,000 from a charitable trust for his own purposes. She ordered that he pay the foundation $1.74 million in damages, plus an estimated $85,000 in legal fees.
Dabo did not show up for the trial, and has not responded to requests for interviews.
Last week he broke his silence by posting a comment on a local community website.
“I made a costly mistake in not securing the money and I take full responsibility for that,” he wrote. “But all of the false and twisted stmts [statements] are exactly that. I am so sorry to everyone that is affected by this.”
The foundation was to have been the designated beneficiary of the remaining principal in the fund after the deaths of Barbara and Tony Matulich, who had created it in 2001. Barbara Matulich died in 2012; Tony Matulich died in 2003.
A few weeks before the trial of the civil suit, Hooper was again asked if she would pursue an investigation of possible criminal charges against Dabo.
Again she declined.
Hooper told Benitolink, a local community website, that she wanted to wait until after the civil suit had been resolved before deciding whether to look into Dabo’s handling of the trust funds.
After the trial—at which more than 230 pages of bank statements, canceled checks and emails told a tale of electronic transfers of the trust fund cash to Dabo’s personal accounts—Hooper declined to respond to repeated questions from the Free Lance, asking whether her office was going to initiate an investigation, given the heft of the new evidence.
The district said she has been busy assisting her ailing 90-year-old father.
Dabo’s status as president of the county school board apparently has not been affected by revelations in the Nov. 13 trial of the civil case.
County schools Superintendent Krystal Lomanto’s only comment last week was, “The County Office of Education Superintendent has no comment at this time.” The school board next meets at 4:30pm, on Thursday, Nov. 30 in Hollister.
Byrne said the district had filed the lawsuit only after repeated attempts to find out what happened to the money in the Matulich Charitable Trust.
“We had tried, for six to nine months, knocking on his door trying to find out where the money went,” said Byrne.
“We really didn’t have any other choice, because we had no response from Mr. Dabo,” said Fortino.
The foundation’s leadership, which doesn’t expect to actually get any of the money awarded in the court judgment, was concerned there might be other victims. That also was a motivating factor in trying to convince the district attorney to investigate.
The FBI might have jurisdiction in the case, according to a spokesman for the San Jose office, if the trust money was deposited in a national bank, where its funds might cross state borders, possibly making misuse of those funds a federal crime. The Matulich funds were in the Santa Barbara Bank and Trust, a California financial institution that was acquired by Union Bank, a national bank.
Prosecution of similar cases in increasingly common, as national concerns have grown about financial consultants taking advantage of elderly customers. In the Dabo case, the civil suit involved violation of California probate laws, but the initial fund transfers occurred while Barbara Matulich was still alive.
In April, a 63-year-old financial consultant in Minnesota was sentenced to six years in prison after pleading guilty to stealing more than $5.1 million from several investment advisory clients.
“The defendant stole from clients who trusted his professional investment advice,” said an FBI spokesman. “The sentence sends a clear message that those who abuse their positions of trust for personal gain will be brought to justice and held accountable for their crimes.”
MITCHELL DABO RESPONDS
Here is the complete text of Mitchell Dabo’s only public comment on a Nov. 13 court ruling that he illegally transferred more than $640,000 from a charitable trust to his own accounts, then loaned most of it to a business associate for a failed real estate venture.
“I made a big mistake not being at the trial, but I did not want to be in court without representation.
“The other side slanted everything their way. I loaned [the late Jack] Tyler $490,000 we were not in a partnership at the time. He was going to use the money to finish a custom home that he was building. At the time of the loan there was over 2 million in equity. When he had difficulties paying the interest he was in the process of refinancing the properties, but unfortunately he died before doing that. Even with R/E prices plummeting there would have enough to pay back the loan. The partnership borrowed money from a private lender to buy the other property and one of the partners took it over after Tyler died.
“Trust money was never used and the partnership never defaulted. With Mrs. [the late Barbara] Matulich’s permission I did transfer money into my account, but I always promptly put it back.
“For instance, I transferred $2,700 and put it back 2 days later, she was okay with that. When interest came in it was given to Mrs. M, when enough payments came in Mrs. M’s life ins was paid (indirectly). Many times acct balances were close to zero, because everything was paid out.
“When the Matulich’s set up their Trust SBCCF [the Community Foundation for San Benito County] was not the beneficiary, they had made Monterey CO Comm Foundation the beneficiary, so when Mr. Matulich died [in 2003]the beneficiary was MCCF.
“When Tyler stopped payments, I used principal to continue to pay Mrs. M’s interest and life ins prem and annual tax exps. Tyler was a good man, but cancer took him quickly.
“I made a costly mistake in not securing the money and I take full responsibility for that. But all of the false and twisted stmts are exactly that. I am so sorry to everyone that is affected by this.”