On Monday, it was announced that 62-year-old Paul Donisthorpe had pleaded guilty to wire fraud and money laundering charges relating to a fraudulent scheme to embezzle money from client trust accounts. It was alleged that Donisthorpe embezzled more than $4.8 million from trust accounts managed by Desert State Life Management, which he operated and controlled. The plea agreement recommends a sentence of eight to twelve years imprisonment and a term of supervised release. It is also recommended that the defendant pay $4,812,857 in restitution.
Donisthorpe is a former resident of Albuquerque, New Mexico. He now resides in Bloomfield. The felony information explains that the defendant was the sole owner and operator of DSLM. The trust company provided trustee and representative payee services to individuals needing assistance with their financial affairs. The defendant carried out a decade long scheme in which he transferred more than $4.8 million from client trust accounts into accounts that he controlled. He then used the money for his own personal purposes.
According to the plea agreement, Donisthorpe acknowledged that he was entrusted to provide trustee services and representative payee services to more than 75 clients. He admitted that from at least 2009 to 2016 he violated his duty by fraudulently transferring client funds from investment accounts to accounts he controlled. The defendant made the transfers knowing that he was not entitled to the funds. He also knew that the clients were unaware of the transfers and that the clients would not have approved of the transfers.
The defendant also admitted to hiding the scheme by causing his accounting staff to falsely record clients’ balances and by providing fraudulent documents to the Financial Institutions Division of the New Mexico Regulations and Licensing Department. After his guilty plea, Donisthorpe was released under the supervision of the United States Probation Services. He will remain free pending his sentencing hearing, which has not yet been scheduled. Additional details can be found here.