The FBI is looking into allegations that over $17 million was stolen by an employee of a Campbell trust management firm.
Christine Backhouse of Backhouse Fiduciary Services has alleged that her boyfriend and employee Leo J. Kennedy stole $17.3 million from accounts managed by the firm, according to her personal lawyer, Andrew Watters.
Kennedy worked as the firm's controller until Backhouse discovered the discrepancy in her records on Feb. 7, and immediately confronted him, Watters said.
According to Watters, Backhouse never saw it coming. "Until the discovery of misappropriations, there was no indication to Ms. Backhouse that Mr. Kennedy was not trustworthy," he said.
"Ms. Backhouse remains devastated that someone she trusted for so many years could cause so much damage," he said.
Although Backhouse does have insurance, it is not enough to cover the missing $17.3 million, Watters said.
Watters said that Backhouse is committed to recovering the missing funds by cooperating with the FBI and hiring a firm of fraud specialists "to aggressively pursue litigation against the defendants and recover the losses."
Backhouse ended her personal and professional relationship with Kennedy as soon as she learned of the losses, and reported them to state and federal authorities and the affected clients.
"The proactive steps that Ms. Backhouse has taken to recover the misappropriated funds demonstrate her commitment to doing everything she can possibly do to make the beneficiaries whole," Watters said.
The FBI confirmed launching an investigation into a theft at Backhouse Fiduciary Services, but FBI spokeswoman Julianne Sohn said she could not comment further on the investigation.
Watters said the theft is not linked to clients with diminished capacity, such as elderly or mentally disabled people whose financial assets may be managed by others.
Backhouse "as a general rule did not take on clients who have diminished capacity," and does not serve as a conservator or guardian, Watters said.
Watters said he did not know the total value of the assets managed by Backhouse.