Lawyers still unraveling the case of the thieving conservator

Five lawyers, their meters running, sat down in a Hennepin County courtroom last Thursday. The task at hand: Sorting through the mess left behind by the collapse of Alternate Decision Makers Inc., a company entrusted with the lives and money of dozens of vulnerable adults.

In June 2013, the company's lawyer and staff confronted the founder and president, Stephen Grisham, with evidence that he had stolen from a veteran under his supervision. Grisham stepped down and gave up his caseload, becoming the latest in a shameful line of court-appointed guardians and conservators caught abusing their largely unregulated powers.

The year since then has been a swirl of investigations, audits and court hearings. More signs of wrongdoing by Grisham emerged. A necklace that belonged to the estate of a deceased Minneapolis woman was sold for $1,500. Another woman lost nearly $16,000 in Krugerrands, the famous gold coins from South Africa.

After an investigation by the Department of Veterans Affairs, Grisham was charged last month with a federal count of misappropriation by a fiduciary. He faces up to five years in prison. It's a stunning fall for a man whom judges enlisted for years to manage the affairs of victims or potential victims of financial exploitation. When people become incapacitated by Alzheimer's, mental illness, substance abuse or other conditions, judges frequently choose guardians to make decisions about health care and living arrangements and conservators to control their finances.

After other guardians and conservators went bad in recent years, the state court system has improved its oversight of these professionals. Yet it was Grisham's own employees who discovered their boss's misdeeds.

Grisham was not in the courtroom last week, and his lawyers said he would have no comment. But his name was on everyone's lips Thursday. "Mr. Grisham takes these matters very seriously," said his attorney, Michael O'Neill. O'Neill told the probate referee that Grisham acknowledged the additional "wrongdoing" involving the Krugerrands and the necklace.

The owner of the missing coins, Helen Durand, sat in the front row of the gallery, her head tilted back, a slight smile on her face. For an hour, she listened to expressions of concern about Grisham's malfeasance. Yet most of the arguing was about who would pay legal fees, which is a very popular conversation topic in this courthouse, and every other one, for that matter.

Robert McLeod, a lawyer for Alternate Decision Makers, said the company is "effectively dead." Yet he wants a bonding company to pay at least $90,000 in legal and accounting fees that were expended to detect an estimated $100,000 in missing assets.

Grisham's confession last year set off a scramble by the company to change locks, safe combinations and passwords, to find other conservators and guardians who could take over Grisham's cases and to hunt for clues to additional thefts by Grisham.

"We acted as if he stole from every file," McLeod said. If the company had not investigated, "the concern was that he would have continued stealing."

But the bonding company's lawyer, Robert Kuderer, said the company should not be rewarded for cleaning up a problem of its own creation. He jabbed a sheaf of legal papers in McLeod's direction.

"They stole. They're bad actors, and they can't divorce themselves from Grisham," Kuderer said. "They are one and the same for the purposes of malfeasance."

The probate referee, George Borer, commended McLeod for doing such a thorough investigation. He called the question a "tough one" and said he would issue a ruling later this summer.

After Thursday's hearing, Durand walked out of the courtroom. For all the heated talk about who's going to pay for what, she still has hope "that justice would be done."

You can bet that the legal bills in the Grisham affair will add up to plenty of Krugerrands before that happens.

Contact James Eli Shiffer at james.shiffer@startribune.com or 612-673-4116. Read his blog at startribune.com/fulldisclosure.