California Bar Journal
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Probate lawyer sentenced in conservatorship scheme

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A Riverside attorney who was convicted of looting conservator-ships in a scheme that prosecutors said victimized vulnerable, mostly elderly people was placed on interim suspension March 17. MICHAEL J. MOLLOY [#116877] was sentenced to 16 years, four months in state prison after being convicted of seven felony counts, including embezzlement by a caretaker of elder adults, grand theft and procuring perjury.

In imposing the sentence, Judge Donald Rudloff said Molloy "used his legal skills to ride roughshod over his victims."

Molloy, 50, was the principal probate lawyer for Bonnie Cambalik, the owner of West Coast Conservatorships Inc., a Riverside company frequently appointed by the probate court to manage the finances and handle the affairs of elderly or infirm people who could not care for themselves.

Prosecutors said Molloy served as a "bridge" between Cambalik and the court, preparing and signing legal papers that kept the court apprised of the status of Cambalik's conservatorships. Cambalik could not have stolen money from her incapacitated clients without Molloy's legal skills, which helped to legitimize her business, they said.

According to trial testimony, Molloy falsified ledgers and court papers to accomplish the thefts. He was accused of collecting $207,283 in unauthorized attorney fees and enabling Cambalik to steal $263,193 in unauthorized fees from various conservatorships.

However, an attorney for Amwest Surety Insurance Co., which bonded Cambalik, said the company has paid losses in 34 conservatorship estates totaling more than $2.2 million, with the potential of another $1 million in claims.

Cambalik pleaded guilty to 22 felony counts of embezzlement by a caretaker, grand theft, perjury and receiving stolen property and was sentenced in December to 26 years in prison.

Molloy's trial focused on 16 estates for which documents submitted to the court contained false information. Among the evidence prosecutors presented were cancelled checks bearing Molloy's  signature drawn on conservatorship accounts for amounts not authorized by the court.

In one case, the victim was a disabled teenaged girl under a guardianship. In another, prosecutors said Molloy prepared a will for an individual who already was dead, forged signatures and filed it with the court.

The man's actual will had bequeathed his estate to charity. Under the phony will, however, $265,000 went to Cambalik rather than to the Salvation Army, the estate's intended recipient.

Although Molloy was charged with perjury for telling the court the liquidated assets were still in the estate, the jury found him not guilty, saying the evidence was insufficient.

Two of West Coast's employees, secretary Ramona Saenz and bookkeeper Diana Mikol, also were charged with helping to steal more than $750,000 from clients. Saenz pleaded guilty to being an accessory to thefts and Mikol, who is Saenz' daughter, pleaded guilty to one count of theft. Mikol testified at the trial that Molloy showed her how to falsify estate accountings to defraud the court.

West Coast Conservatorships shut down in 1999. Cambalik had operated the business since 1986, handling more than 300 conservator-ships during the intervening years.

Molloy's attorney focused on his activities as a Little League coach and law school instructor and argued that his client was scapegoated by a local legal community embarrassed that his activities went unnoticed for years.

His plea for mercy went unanswered. Instead, Rudloff said, "The mindset of the co-conspirators was, 'Wow, it worked once, let's do it again, let's do it again, let's do it again.' They took the position, 'After all, what would a group of incompetents do?'"

Molloy also got in trouble in 1986, when he was convicted of unlawful sexual intercourse and was suspended from practice by the State Bar for two months and placed   on 18 months of probation.