12-year sentence for defrauding clients
Copyright ? 2019 Albuquerque Journal
Paul Donisthorpe, who ran a decade-long scheme to steal millions from more than 70 clients of his nonprofit trust company, was sentenced to 12 years in federal prison Friday and surrendered to the U.S. Marshals office immediately to begin serving his sentence.
Donisthorpe, 63, pleaded guilty to money laundering and wire fraud in 2017 after an FBI investigation showed he stole $4.8 million from the trust accounts of 77 clients when he headed Desert State Life Management, a state regulated guardianship firm.
Desert State, which is now closed, acted as conservator and fiduciary for developmentally or physically disabled and elderly individuals.
But the amount federal prosecutors believe Donisthorpe stole has climbed to $6.8 million, and, according to U.S. District Judge James Browning, that number could continue to grow.
Donisthorpe’s comments to Browning were short.
“I am profoundly sorry,” he said. “There is no defense for my actions.”
Browning approved the plea agreement and sentenced Donisthorpe to the maximum under the agreement ? 12 years.
He set restitution of more than $6.8 million ? indicating the amount could grow in the coming months ? and an additional $4.8 million judgment.
As part of his plea, Donisthorpe turned over his interest in properties in Texas, Angel Fire and Albuquerque to the Department of Justice.
Browning said that as additional information continues to be brought to the court, the amount of restitution could grow. But how much victims will receive, if anything at all, depends on several civil lawsuits involving insurance companies and others.
“The victims will have to suffer the rest of their lives,” Browning said. “So he could live a high-end lifestyle.”
Browning sentenced Donisthorpe after listening to several victims like Omar Ramirez, who suffered serious head injuries in a traffic accident.
Ramirez said he and his family asked Donisthorpe for an accounting of his trust when his family fell on difficult financial times.
“He (Donisthorpe) said he could not tell us how much was in the account, but he told me not to worry about the money because I would have it the rest of my life.”
Joseph Perez, who has cerebral palsy, said he believed Donisthorpe stole from his account because “I wouldn’t understand what he did to me.”
Perez then turned his wheelchair so he could face Donisthorpe and said, “You don’t have a heart. You are not a man. I am never going to forgive you.”
From 2006 through 2016, Donisthorpe liquidated his clients’ investments and then had their money transferred to accounts that he controlled, which he used for his own personal expenses, real estate ? including a resort home in Angel Fire ? and an investment in a cattle ranch in Texas. Assistant U.S. Attorney Jeremy Pena told Browning that the victims “had special needs. They were not taking risks, they were seeking security so that they would be provided for ? for the rest of their lives.”
Prosecutors said Donisthorpe stole on average $40,000 a month from his disabled and elderly clients.
“Every month he made the same set of decisions to take the money from disadvantaged victims,” Pena said.
Donisthorpe’s attorney, Ahmad Assed, said that Donisthorpe agreed early on to plead guilty and help victims get their money back.
“The assets Mr. Donisthorpe purchased are tangible,” Assed said. “There is no hidden cash or off-shore accounts.”
Assed attributed Donisthorpe’s actions to mental health problems (depression) and alcohol abuse.
“He had an irrational plan that he could make money in the cattle business and pay the accounts back,” Assed said.