121. GRANT THORNTON, LLP has been acting as and is the de facto Trustee of the LFT. Grant Thornton performs and bills for the performance of the
duties of LFT Trustees. Grant Thornton also performs and bills for the performance
of accounting for the LFT primarily through Grant Thornton Senior Partner and
accountant MURPHY. Exhibit 44.
122. Respondents knew that Grant Thornton and MURPHY as accountant and as
Trustee were exactly the same as set forth below and that they maintained
common addresses, telephone numbers, fax numbers, email addresses, office space
and equipment so that no distinction can be made;
a) The telephone number for Respondent Grant Thornton is 775-786-1520.
b) The telephone number for the LFT is 775-786-1520.
c) The fax number for Respondent Grant Thornton is 775-786-7091.
d) The fax number for the LFT is 775-786-7091.
e) The email address for Respondent accountant MURPHY is jmurphy@gt.com.
f) The email address for Respondent LFT Trustee MURPHY is jmurphy@gt.com.
g) The mailing address of Respondent Grant Thornton is P. O. Box 30, Reno, Nevada 89504.
h) The mailing address used by Respondent accountant MURPHY is P.O.Box 30, Reno, Nevada 89504.
i) The mailing address used by Respondent LFT Trustee, MURPHY for
business related to the LFT is P. O. Box 30, Reno, Nevada 89504.. Further, even Respondent and Trustees' attorney REESE causes all legal
notices and bills for professional services regarding the LFT to be mailed to
Respondent Grant Thornton's P. O. Box 30, Reno, Nevada 89504 - see Certificates of
Mailing filed by CR&R in the instant case.
j) The physical location of Respondent Grant Thornton's offices in Reno is 100 West Liberty Street #770, Reno, Nevada 89501.
k) The physical location of LFT's offices is 100 West Liberty Street #770, Reno, Nevada 89501.
l) During Petitioner's four day visit to review and scan LFT files and
records, Petitioner presented himself at the Offices of Respondent Grant Thornton on
December 1, 2, 3, and 6, 2004. Petitioner has experienced first hand that there
is no way to distinguish between LFT and Respondent Grant Thornton property,
personnel or office equipment.
m) Petitioner
has reason to believe that when Respondent LFT Trustee MURPHY produces LFT
telephone records he will have to produce Grant Thornton's telephone records.
123. From 1983 to March 2004 respondent MURPHY while acting as both LFT
Trustee and as Grant Thornton's accountant for the LFT did not provide or serve Petitioner
with annual accountings for the LFT.
124. GRANT THORNTON, LLP and accountant MURPHY's LFT Charge and
Discharge statements for the year 1990 shows combined "Legal and
accounting fees" in the amount of $13,132.02. See Figure 1.
125. From 1990 to 2000, the LFT's "accounting and tax return fees"
continually escalated from a fraction of $13,132.02 dollars in the year 1990 to
$73,750.00 in the year 1997. See Figure 1.
FIGURE 1
Evolution of Accounting Fees for Lear Family Trust |
Year |
Accounted as |
Amount charged |
% change |
1978 |
unknown |
unknown |
|
1979 |
unknown |
unknown |
|
1980 |
unknown |
unknown |
|
1981 |
unknown |
unknown |
|
1982 |
unknown |
unknown |
|
1983 |
unknown |
unknown |
|
1984 |
Accounting & Legal |
$33,187.67 |
|
1985 |
Accounting & Legal |
$17,611.52 |
|
1986 |
Accounting & Legal |
$24,960.31 |
|
1987 |
Accounting & Legal |
$24,429.18 |
|
1988 |
Accounting & Legal |
$20,285.23 |
|
1989 |
Accounting & Legal |
$19,820.99 |
|
1990 |
Accounting |
$9,132.02* |
|
1991 |
Accounting &Consulting |
$16,780.00 |
83.75% |
1992 |
Accounting |
$42,960.00 |
156.02% |
1993 |
Accounting |
$54,149.00 |
26.05% |
1994 |
Accounting |
$43,060.00 |
-20.48% |
1995 |
Accounting |
$50,940.00 |
18.30% |
1996 |
Accounting |
$61,525.00 |
20.78% |
1997 |
Accounting |
$73,750.00 |
19.87% |
1998 |
Accounting |
$55,650.00 |
-24.54% |
1999 |
Accounting |
$70,845.00 |
27.30% |
2000 |
Accounting |
$64,000.00 |
-9.66% |
2001 |
Accounting |
$61,580.00 |
-3.78% |
2002 |
Accounting |
$69,612.50 |
13.04% |
2003 |
Accounting |
$55,100.00 |
-20.85% |
* |
Amount is estimate,
combined legal and accounting was $13132.02 |
126. Grant Thornton and accountant MURPHY's LFT Charge and Discharge
statements for the year 2000 shows "accounting and tax return," excluding legal
fees, in the amount of $64,000.00. Exhibit 45.
127. At all times relevant hereto, Grant Thornton, LLP, by and through its
partner and accountant MURPHY, assumed the duties and were exercising the
powers and obligations of LFT Trustees in varying degrees, including but not
limited to, drafting and completing LFT Charge & Discharge Statements,
writing to beneficiaries, drafting and sending reports to beneficiaries,
attending meetings on behalf of LFT, and doing tasks such as depositing checks
for the LFT while charging and billing accounting fees and costs for performing
LFT Trustees' work and duties.
128. Nowhere in the record of the instant case, is there any Court Order
appointing Grant Thornton as LFT Trustee or for MURPHY to double-bill the LFT
for performing Trustee duties and then billing the LFT as a Grant Thornton accountant doing the same task and work.
129. In the year 2000, Grant Thornton by and through accountant MURPHY,
billed the LFT for the performance of Trustee duties at the rate of $210.00 per
hour and $225.00 per hour. Grant Thornton performed and billed the LFT at the
aforementioned rate for the following Trustee duties, including but not limited
to:
"calculating beneficiary checks, deposit of letters and
checks, [approximately $12,000 worth of] telephone calls, obtaining
parcel maps, balance trust accounts, calls and travel to Stead to deal with
dust problems, prepare a new address list of Trust beneficiaries, write letters
to LFT beneficiaries regarding sale of land, miscellaneous services related to
offsite improvements for Moya Blvd project including meetings, many calls and
meetings related to construction projects on Moya Blvd, preparation of maps for
various land parcels, sign land maps, analysis of property tax bills and meeting
with assessor related thereto, calls to Granite Construction Co, meeting with
Peek on possible sale of land for mini warehouse joint venture, review of Paine
Webber stock transactions, calls and discussions with attorneys and
miscellaneous services, write a letter to State Farm, letters and work on
insurance claim, write a letter to Shanda Lear-Baylor, write a letter to income
beneficiaries, transcribe letter to beneficiaries, miscellaneous calls and
services related to beneficiary requirements, preparation and scheduling of
insurance company matters, and have lunch."
Exhibit 44
[Emphasis added]
130. Grant Thornton by and through MURPHY who performed these
duties as an accountant of Grant Thornton billed and charged the LFT at a higher and far more
expensive rate. While performing and providing these Trustee services as an
accountant of Grant Thornton, MURPHY, also received payment for the same services as LFT Trustee. MURPHY also took funds from the LFT to pay Grant Thornton.
131. By engaging in this activity and billing practice, Grant Thornton was unlawfully and covertly acting as the Trustee of
the LFT and billing the LFT at a much higher rate than was paid to LFT Trustees
for performing the same duties and obligations.
132. Grant Thornton by and through its senior partner and accountant, MURPHY,
who is also one of three LFT Trustees, continually and fraudulently billed the LFT
for exercising accounting duties such as production of Income Tax Returns at
the partner rate of $210.- or $225.- / hour when according to this Petitioner's
interview of Grant Thornton personnel indicated that it is common practice for young
accountants newly hired by the firm to perform this accounting task, at a much
lower rate. Exhibit 44.
133. DAYTON and ROWLEY were grossly negligent and are
liable for their inactivity in the administration of the LFT and for their
failure to attempt to prevent the breach of trust and gross imprudence committed
by Grant Thornton and MURPHY when they knew or should have known that the
accounting firm and accountant were fraudulently usurping, subverting and
transferring the entire administration and management of the LFT to Respondent Grant Thornton. NRS 163.110(2).
134. Trustee MURPHY of his own accord and volition and without Court
approval appointed Grant Thornton as the de facto Trustee of the LFT and
thereby double-billed the LFT and charged the LFT an excess of $210.- per hour
for duties that were properly and prudently performed by the LFT Trustees
themselves at $3,000 per month each.
135. Respondents DAYTON, MURPHY and ROWLEY while knowing
that MURPHY was squandering and imprudently using LFT funds, failed to
exercise the duty of LFT Trustee to protect the property and interest of the
Trust and were grossly negligent in allowing MURPHY to defraud the LFT
in such a gross and continuous manner.
136. Devising and implementing this scheme of multiple positions and
characters, Grant Thornton and MURPHY confounded, confused and commingled the
LFT Trustee MURPHY with Respondent Grant Thornton and senior partner and
accountant MURPHY for unjust enrichment, profit and gain.
137. On February 16, 2005, Petitioner caused a Request for Production of
Documents to be mailed to Respondent Grant Thornton. On March 1, 2005, Petitioner
received a written communication dated February 28, 2005 from GUILD,
RUSSELL, GALLAGHER & FULLER, LTD (GRG&F) attorneys for
Respondent Grant Thornton refusing to provide the relevant LFT information requested
by Petitioner while making misrepresentations as to the direct and continuing
nature of the relationship between the Grant Thornton accountant MURPHY and to
LFT Trustee MURPHY. Exhibit 79.
138. In addition and in their February 28, 2005 letter Respondent Grant Thornton by and through it's attorneys GRG&F stated that "many if not all" of
the documents requested by this Petitioner had already been made available "at
the offices of Grant Thornton". Having specifically requested Respondent Grant Thornton to produce and provide Petitioner with Grant Thornton contracts with LFT and no
contract being produced by Grant Thornton or MURPHY, Petitioner has reason to
believe that no written contract exists between the LFT and Respondent Grant Thornton and that Grant Thornton was unauthorized to act as a de facto LFT Trustee or
to engage in other activities on behalf of the LFT.
139. On March 2, 2005, Petitioner caused a Request for Production of
Documents to be mailed to LFT Trustee MURPHY which was followed by a fax
to LFT attorney REESE requesting LFT attorney REESE to advise and
counsel his client Trustees to immediately respond to Petitioner's request for
documents. While maintaining their hostile and obstructive position against
this Petitioner, REESE and MURPHY have failed, neglected and
refused to comply with Petitioner's requests or to otherwise communicate with Petitioner,
thereby furthering their self-serving and secret scheme to deprive LFT
beneficiaries of records and relevant information regarding the LFT and the
management of the LFT. Exhibit 80 & 81.
140. LFT sums expended for the performance of Trustees' duties by Grant Thornton are not authorized by this Court's Order dated August 23, 1983 or by any other order of this Court before or after the decease of LFT Trustees Dayton and
Rowley.
141. By the foregoing pattern of conduct and the continuing acts, omissions,
imprudence, negligence and frauds committed by the Respondents, Petitioner has
been deprived of due process of law and his rights and interests in the LFT
have been reduced and alienated by the Respondents in violations of the Last
Will and Testament of WPLSr, the terms and conditions of the LFT, in violation of this Court's Orders and in violation of the Constitution and laws of the
State of Nevada and the United States of America.
