Dorothy Dinallo gave family friend Rick Wallace power of attorney over her affairs, named him as the agent of her living will and made him the executor of her last will and testament.

"It was a very loving and caring relationship, full of trust and faith," Dinallo's attorney, Stuart Einhorn, testified Tuesday in New London Superior Court.

That was eight years ago, when Dinallo, whose late husband had owned a communications business and a convenience store, still had money and property.

By 2007, Dinallo was out of money and the Baltic home that she had purchased with cash was in foreclosure. Following a state police investigation, Richard K. Wallace was charged with stealing more than $125,000 from her. He has maintained his innocence and claims that Dinallo simply ran out of money.

Dinallo, now 92 and partially confined to a wheelchair, testified as the trial of Wallace, 59, got under way Tuesday before Judge Arthur C. Hadden. She said Wallace and Dinallo's daughter, Candace, were "going together" at one point and lived with her.

Another of Dinallo's daughters, Enid Pelletier, testified that Wallace and Candace Dinallo at one point were spending her mother's money "like water," buying cars and a lawnmower and taking trips.

Candace Dinallo, who suffers from bipolar disorder, was not able to watch the proceedings since she may be called on to testify and potential witnesses are sequestered. She has been in frequent contact with court officials and has pushed for a resolution to Wallace's case, which has languished for nearly six years.

"At least it's started," she said Tuesday as she pushed her mother's wheelchair through the courthouse doors.

East Lyme attorney and probate judge Jeffrey A. McNamara, who is acting as a "special victim's advocate," listened to the first day of testimony from the gallery.

The case will resume on Thursday and is expected to last about two weeks as the attorneys focus on the trial of financial and legal records. Senior Assistant State's Attorney Stephen M. Carney is prosecuting, and Norwich attorney Donald R. Beebe is representing Wallace.

State Trooper John Patterson began investigating Wallace when he responded to a call in February 2007 to help remove a dead dog from Dinallo's home on Plain Hill Road, according to an arrest warrant affidavit. The trooper asked Dinallo about a Rolls Royce that was parked in the garage, and she said Wallace had bought it from her for $500. When Patterson asked her why she would sell it for so little, Dinallo said she needed the money because her home was being foreclosed and she could not afford food or heat.

One of the daughters told Patterson she suspected Wallace of stealing tens of thousands from Dinallo. Wallace told Patterson that Dinallo simply had run out out of money. He said she mortgaged her house in 2003 for $290,000. Wallace said that at her request, he invested $125,000 from the loan in a mobile advertising company called Teleractive Inc. He said he also used the money to pay bills and invested in Black Orchid Jewelers of Mystic at the family's request.

k.florin@theday.com