What happens when a trustee uses the trusts’ funds to buy jets, homes for mistresses, and golf memberships for himself and his sons?
After a long walk through fiduciary duties and arms-length transactions, the bottom-line answer is fairly simple: he’ll face jail time.
A Massachusetts man plead guilty yesterday to running a fraud scheme that netted him $20 million from the company he ran — a company created to manage trusts for the descendants of the late Frederick Ayer Jr., who owed Massachusetts textile mills.
The man, John Doorly, plead guilty to fraud and money laundering. He was the chief operating officer of Tenens Corp., and prosecutors say that from 1999-2006, he removed millions of dollars from its bank accounts and also overcharged it for accounting fees.
He faces up to 20 years and will be sentenced in March.
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