Probate judge OKs payment for trustee under investigation

John E. Larkin will receive $50,000 from the trust fund of an 88-year-old heiress while the FBI probes his handling of her finances.

The Los Angeles Times/July 18, 2012

The Los Angeles County probate judge who oversees an elderly heiress' trust fund approved $50,000 in compensation Tuesday for a Kabbalah Centre official who is under criminal investigation for his handling of the woman's financial affairs.

Los Angeles County Superior Court Judge Michael I. Levanas signed off on John E. Larkin's payment request without comment. The money covers work that Larkin, a veteran Hollywood financial advisor, performed last year as a trustee for an $11-million family trust fund benefiting 88-year-old Susan Strong Davis. The probate court approves such payments because the trust fund was set up by Davis' mother's will.

Davis' nieces have said she has suffered from dementia for several years, a period in which Larkin sold her a vacant lot he owned in Beverly Hills for what public records indicate was a $300,000 profit. Davis, who has lived in the same home in Palos Verdes Estates for three decades, borrowed more than $2 million from her trust fund to buy the Beverly Hills land and build a four-bedroom home there.

After a Times report detailing the transaction and a $600,000 donation she made to the Kabbalah Centre in 2005, police in Palos Verdes Estates launched an investigation into her finances, an inquiry taken over last month by federal agents. The IRS has been investigating the Kabbalah Centre for possible tax evasion since 2010. Larkin helps oversee the religious organization's finances.

Through his lawyer, Larkin has said he did nothing wrong and consistently acted in Davis' best interests.

In an April court filing, a lawyer for Larkin and another trustee wrote that the men had "managed and administered the trust estate frugally and without waste" and should each be paid $50,000. The request was accompanied by a statement signed by Davis that said she "does hereby urge the court" to pay the money from the family trust.

Fourteen distant relatives will inherit the trust fund assets upon Davis' death. Some have consulted an attorney about Larkin's conduct, but none objected to the $50,000 payout.

"You are always concerned when these kind of things are going on, but at the moment, we don't have any reason to not have him on" as a trustee, said Steven Rivers, a Sherman Oaks architect and Davis' great-step-nephew. He said Larkin had told him the Beverly Hills home would be put up for sale at the end of the summer and the proceeds would be used to repay the trust.

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