San Benito County District Attorney Candice Hooper said she will ask a special forensic accountant to investigate possible fraud or theft by county School Board President Mitchell Dabo, in connection with missing funds from a local charitable trust.
But there is a catch. Hooper said she wants the Hollister Police Department to look into it first.
“We have just begun to use the pro bono services of a forensic accountant on an unrelated case,” said the district attorney in a written response to an email inquiry from the Free Lance. “Once we get the [Dabo] case file submitted from the Hollister Police Department, we will ask the gentleman to look at it too.”
On Tuesday, a 217-page binder containing the evidence gathered by John Clark of Morgan Hill, the foundation’s lawyer, and affirmed by a Superior Court judge at the Nov. 13 civil trial—including bank statements, canceled checks, emails and court documents detailing the systematic draining of funds from the charitable trust by Dabo—was delivered to Hooper’s office by the Free Lance.
The binder includes copies of canceled checks from the trust signed by Dabo and evidence of electronic transfers from the trust to a Mitchell Dabo Associates bank account.
The canceled checks include:
- Numerous checks made out to “Cash” signed by Dabo, including one with “Hair Extensions.com” in the memo. The cash amounts ranged from $2,700 to $21,008.
- Three checks, totaling $490,000, to the late Jack Tyler, a friend and former business associate of Dabo
- One check, for $3,000, to Barbara Matulich dated three weeks after she died in March 2012. The former Hollister orchard owner set up the charitable trust with her husband, Tony, in 2001. Tony Matulich died in 2003.
- A $4,000 check to Mitch Dabo Associates
Hollister police say they don’t have the resources to handle a proper investigation of last month’s revelations in San Benito County Superior Court that Dabo transferred more than $640,000 from the Matulich Charitable Remainder Trust to his own accounts.
The money had been earmarked for non-profits served by the Community Foundation for San Benito County, which only received $82,110 from the trust. Dabo offered the foundation no explanation for the missing funds.
Last week Dabo apologized in a signed online statement for what he called “a costly mistake.”
“Assigning an investigator to this one case would be at the detriment of all the other cases currently on the detectives’ caseload,” said Capt. Carlos Reynoso last week, speaking for Police Chief David Westrick.
Reynoso said Hooper doesn’t need police files to begin her own investigation.
“We have not received any new information or records since the recent civil case,” the police captain said in response to questions from the Free Lance.
“However, if the foundation has a substantial amount of evidence produced through its own investigation, the case can be reviewed by the DA’s office to determine if there is sufficient evidence to achieve a criminal conviction.”
“The evidence does not necessarily have to come to the police department first before charges are filed by the DA’s office,” he said.
Hooper last week disagreed: “Our office is law-enforcement-generated, meaning that reports are submitted by the agency. Therefore, any information on potential victims should be referred to the Hollister Police Department.”
“We will sort it out,” Westrick told the Free Lance last week.
San Benito County Superior Court Judge Marjorie L. Carter ruled in favor of the foundation in its suit against Dabo and ordered him to pay the foundation $1.74 million in damages, plus an estimated $85,000 in legal fees.
“There’s plenty of evidence that the district attorney can use,” said Clark, “and then she can likely follow up and get Dabo’s banking records to corroborate those with the trust-account records.”
“We could only track monies going out and back into the trust account and had no information as to what Dabo was doing with the funds after he transferred them out,” said Clark.
Gary Byne, executive director of the Community Foundation, said other individuals have contacted him, saying they also were victims of actions by Dabo. Phil Fortino, president of the foundation board of directors, said last week, “Now that it’s been exposed, there are others who have said they had a similar experience. I think it warrants an investigation.”
For more than 15 years after losing his Financial Industry Regulatory Authority certification because of regulatory actions, Dabo offered financial advice and planning to Hollister residents, including the late Tony and Barbara Matulich, who set up the charitable trust.
Reynoso said that Hooper did reach out to Hollister police, and told of allegations against Dabo that were later affirmed by a Superior Court judge.
“Chief Westrick met with the detective sergeant at the police department and an investigator was tasked to look into the matter,” said Reynoso, in a written response for the Free Lance. “The investigator spoke with an attorney for the San Benito Foundation and it was apparent very quickly that this type of case required an expert forensic analyst.”
Cases involving allegations of embezzlement are routinely referred to a forensic accountant or a private investigator to produce the evidence needed in a criminal and civil case, the Hollister police captain said.
“Often a complicated case like this would require hundreds if not thousands of hours of investigation involving search warrants, bank records and interviews of many witnesses and an understanding of what to look for,” he said. “The department only has two detectives available to investigate cases in the City of Hollister.”
Meanwhile, San Benito County school officials continued this week to refuse to say whether Dabo’s admitted mishandling of the charitable trust should disqualify him from serving as president of the county school board, or as a trustee, or whether the board would undertake its own investigation or public discussion of its president’s handling of the charitable trust. Dabo was first elected to the board in 1996.
The only comments from the county office of education to repeated inquiries by the Free Lance were: Supt. Krystal Lomanto, who said, “The County Office of Education has no comment at this time,” and board Vice President Joan Campbell-Garcia, who also said, “No comment at this time.”