A Los Altos thrift and its manager face allegations of elder fraud in a trial that began last week in Santa Clara County Superior Court.
The trial, naming the Downey Savings and Loan branch located at Loyola Corners and its branch manager, Mark Asplund, grew from a lawsuit first filed Feb. 14, 1995, by the public guardian, the public administrator and the special administrator of the estate of one of the thrift's customers.
Asplund, 36, admitted in court last Thursday, before Judge Joseph F. Biafore Jr., that on July 9, 1993, an elderly widow, Terry Mosher, closed her Downey account of $294,000, moved it to Home Savings as a joint tenancy account, and put Asplund and his wife, Kathy, on the account with the right of survivorship.
Kathy Asplund, administrative assistant to the Loyola Corners Business Improvement District of which the Downey branch is a part, is also named in the court action.
By Aug. 1, 1993, Asplund had used $20,000 to buy a pickup truck, had been named executor of Mosher's will, was a beneficiary of her estate and used $15,000 to pay off debt, according to court testimony.
Asplund, a Los Altos resident, declared bankruptcy four weeks ago and is representing himself. Asplund said he has been on a personal leave from his job at Downey for four weeks.
After the Mosher accounts were closed, Asplund said he told his supervisor.
"If we lose large accounts, we track it for meeting goals," Asplund said.
Asplund said that in his job, "never, in 11 1/2 years," did he advise customers about products or financial decisions.
By Aug. 1, 1994, "You and your family had received $10,000 in cash gifts, your parents had a $20,000 cash gift, you had power of attorney, you paid off a $41,000 line of credit at Downey and she (Mosher) had made you a beneficiary of her trust," said attorney Michael Desmarais, representing the public guardian's office.
"That's correct," Asplund told the court.
By then Downey had been contacted by the public guardian's office and by the district attorney's office.
In an Aug. 1, 1994, work evaluation, which Desmarais read in court, Downey supervisors wrote, "Mark's performance continues to be excellent." During this time Downey named Asplund acting regional manager while Asplund's supervisor was on maternity leave.
Downey's code of ethics for its employees prohibits its staff and immediate family members from "soliciting, accepting or retaining any gifts from customers," Desmarais said as he read from a Downey handbook.
The policies also state that staff members should avoid acting in any fiduciary capacity as executor or trustee, Desmarais read from Downey policies.
Staff members who violate the code are subject to dismissal, Desmarais said.
Asplund first met the Moshers when he was a bank trainee in 1984. He came to the Los Altos branch as manager in 1990. "In time I became their friend," he said of his relationship to the Moshers.
Mosher's husband died Nov. 16, 1992. Until then he had handled the family finances. Terry Mosher was in her late 70s at the time of her husband's death. She died in 1995.
The public guardian noted Terry Mosher had alcohol problems and may have suffered from Alzheimer's disease.
Asplund said Mosher was never disoriented and never suffered from memory loss. In February 1994 Asplund was given durable power of attorney for Mosher.
In August 1994 the county stepped in to create a conservatorship for Mosher. Asplund hired an attorney and objected.By March 1, 1997, depositions were taken, two different times, with Downey's attorneys present, according to court testimony.
At the same time, Asplund's supervisor gave Asplund an overall performance rating of excellent and highlighted his skills with customer service, Desmarais said.
According to a Mercury News article, court papers indicate Mosher's heirs are seeking $748,000 in general damages on behalf of Mosher's estate and up to $10 million in punitive damages against the thrift.
The lawsuit is going forward under California's Elder Abuse Act. Lawyers familiar with the law said that this is a growing area of enforcement, especially cases that hold financial institutions accountable. Typically the cases settle before going to trial, said an attorney involved in a case similar to this.
The trial is expected to continue for at least two weeks.