facebook
twitter
search
search

Adviser's handling of fortune questioned

April 9, 2012 at 11:14 PM

LOS ANGELES, April 9 (UPI) -- A financial adviser's handling of a fortune belonging to a Southern California woman with dementia is being questioned by relatives and a retired judge.

Decisions involving large sums of money are being made in the name of Susan Strong Davis, 87, of Palos Verdes Estates, the Los Angeles Times reported.

Advertisement

In recent years, the widow, who has no children, has given at least $600,000 to a charity to which relatives said she has no ties, run by the Kabbalah Centre, a Los Angeles spiritual organization under investigation by the Internal Revenue Service, and borrowed millions to build a four-bedroom house in Beverly Hills with three fireplaces and a pool, the Times said.

The newspaper said public records and interviews reveal Davis' longtime financial adviser, John E. Larkin, was handling her personal finances when she made the donation, and the Beverly Hills home is being built on a lot Larkin sold her for $1.4 million, reaping a substantial profit.

Larkin has been a student of the Kabbalah Centre's Jewish mysticism for almost a decade and plays a major role in overseeing its financial assets.

Larkin, 64, did not return messages seeking comment, the Times said. A Kabbalah Centre spokesman declined to answer questions about Larkin, Davis or the money she donated to the charity, Spirituality for Kids.

Larkin has not been identified as a subject of the IRS investigation and has not been accused of any crime in handling Davis' money.

To build a home on the Beverly Hills site, near the Kabbalah Centre, Davis has borrowed $2.65 million from the trust, property records and court filings said.

Trustees annual reports didn't disclose Larkin's role in the home loan.

"The judge has nothing to say about it. It's not trust business," said Alan L. Rosen, an attorney who filed the trustee accountings.

But the Times said experts disagreed, noting under state probate code, a transaction "by which the trustee obtains an advantage from the beneficiary is presumed to be a violation of the trustee's fiduciary duty."

"It's a conflict of interest. In my opinion, [Larkin] should have disclosed the entire aspect of the loan, not only that she was borrowing it for a house but that he was the seller," said Arnold Gold, a retired Los Angeles County Superior Court judge.

Related UPI Stories
Latest Headlines
Top Stories
Videos