Convicted of grand theft, Monterey attorney resigns

A Monterey attorney who pleaded guilty to one count of grand theft for diverting more than $1 million from the estate of a deceased client for his own purposes has forfeited his law license.

The Supreme Court accepted the resignation of DENNIS W. FOX [#61159] Aug. 13.

Fox, who will turn 57 this month, was sentenced Aug. 13 to one year in county jail and 10 years’ probation after a judge said the circumstances of his case were so unusual that they overcame the presumption of probation ineligibility. Prosecutors had sought six years in state prison.

Deputy District Attorney Joe Buckalew said Fox, an avid golfer, funneled more than $1.3 million of his client’s estate into a limited liability company he had formed and used the money to buy a home he had long coveted on a country club golf course.

His crime was the result of “greed, opportunity, temptation and very poor judgment,” said Buckalew. “Fox had known the owner for years and had often mused over acquiring that property,” he added.

Fox wrote a living trust for Pebble Beach resident Dorothy Trace, designating the Hospice Foundation for the Central Coast as her beneficiary.

He served as trustee of the estate, which was valued at $1,321,248.91 when Trace died in January 2000.

Six months after her death, Fox liquidated the estate’s assets, putting the money into Marcheta Lane Investments, the company he had created.

The money ultimately went into an escrow account to buy the house on Marcheta Lane for around $1 million.

But he was tripped up by his paralegal, who usually administered trusts and handled the routine details when a trust was liquidated and its assets distributed. In this case, Buckalew said, Fox said he would handle the file himself.

The paralegal realized Trace’s estate involved an amount that would require tax statements and notices to beneficiaries and she confronted Fox when he did not do the required work.

She also knew he had bought the Marcheta property and was so concerned that money was being misappropriated that she resigned and consulted an attorney.

The attorney contacted the Hospice Foundation, but when its representatives asked Fox about the Trace estate, he said the trust did not provide for a gift.

Later informed that the actual trust instrument showed the Hospice Foundation as sole beneficiary, Fox said the trust had been amended to delete the gift to Hospice.

It was then that the matter went to law enforcement.

Buckalew said the foundation, which has sued Fox, has not seen a dime of Trace’s money, although the house has since been sold for $2.2 million.

Fox pleaded guilty to grand theft June 16, with an enhancement for taking more than $1 million.

But at his sentencing last month, Fox’s attorney, Larry Biegel, presented witnesses who offered emotional testimony about Fox’s good character.

Biegel said his client “has lost everything” — his friends, his reputation and his ability to earn a living.

Judge Gary Meyer also cited several factors, including the fact that Fox relinquished control of the estate and his “senior” age as reasons to make him eligible for probation. “Lawyer years are hard years,” Meyer said. “The court finds Mr. Fox on the ground, and a prison sentence would be kicking him while he’s there.”

But Hospice Foundation President Alice Kinsler read a statement, noting that the foundation was able to fund only half the requests for help it received from care providers this year.

Had Fox carried out the wishes of his client, those organizations “would not now be in a financial predicament that threatens their ability to continue providing end of life services,” she said.

Had he acted properly, Kinsler added, “our donors and members of the community would have had no cause to question the fiduciary role of their legal and financial advisors and others in the professional community.”

Buckalew praised Fox’s paralegal, who he said was forced to move from the community for a time as a result of the case. “Here’s a paralegal who went above and beyond to do the right thing,” he said. “Paralegals have great value and worth and are prized employees.”

Buckalew strenuously objected to the sentence. “I don’t think this case was so unusual to justify overcoming the presumption of ineligibility for probation,” he said. “The factors the judge seized upon were not an appropriate basis.”