LaSaracina ordered to repay $4.2 million to family trusts
Norwich — Probate Judge James Kelley has ruled that Norwich accountant F. Robert LaSaracina "willfully mismanaged" nine family trusts known collectively as the Kauppinen Trusts and must repay them more than $4.2 million.
Kelley, in a decision filed today in Norwich Probate Court, rejected LaSaracina's accounting of his handling of the estate as trustee, finding that LaSaracina engaged in self-dealing with regard to trust assets; commingled trust assets with personal business assets; and encumbered trust real estate with "ill-advised and excessively expensive loans … for no reasonable purpose discernable by this court."
LaSaracina, Kelley found, "has caused irreparable harm to the trusts by 'lending' money … to other clients … family-owned business interests and client-owned businesses in derogation of the fiduciary duties (as trustee)."
LaSaracina, the target of a federal probe of his financial dealings, invoked his Fifth Amendment right against self-incrimination at a Sept. 21 probate court hearing. In late July, FBI agents searched and removed records from his West Town Street office.
The more than $4.2 million includes more than $2.2 million representing the difference between the current net asset value of the trusts and what that value should have been "but for the fraudulent self-dealing of the former Trustee," and a future projected loss of nearly $2 million more, according to Kelley's three-page decision.
Kelley's ruling also calls for LaSaracina to pay more than $134,000 in accounting fees to Fredrik Holth, the New London attorney who succeeded LaSaracina as trustee, and $75,000 in fees to Linda Kidder, the Waterford attorney for the trusts.