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Wednesday, September 19, 2012

Missing pieces in the Thibeault estate

There are still a lot of unanswered questions and contradictory statements from Peter Kelly.

Posted By on Wed, Sep 19, 2012 at 5:10 PM

We reported this morning, Peter Kelly is being removed as executor of the Mary Thibeault estate effective October 1.

That's also the date that Kelly must provide a full accounting of the estate while it was in his control. In January, the court will review that accounting.

But the accounting won't be complete unless it fully addresses several issues, including:

The missing $161,587.13. As we detailed in our investigation of the estate, after Mary Thibeault died, Peter Kelly removed over $160,000 from Thibeault's personal bank account, placing the money in the control of himself and his son.

There are a few issues here. Primary is, well, the money isn't there. There's a notion that Thibeault's heirs have received the money they're due---apparently, since publication of our article Kelly has paid the non-profit organizations named as heirs the money they were due if Kelly's inventory of the estate was correct.

But the inventory Kelly submitted to the court on August 19, 2005 is not correct. That inventory was supposed to document all of Thibeault's property and cash at the time of her death, on December 4, 2004. But the inventory does not reflect the $160,000+ that Kelly removed after her death.

So, if in the accounting Kelly returns the missing money to the estate, the heirs will be due another $160,000, on top of what they've already received. Most of the heirs—all of the people and two of the non-profits—were to receive five percent of the estate, so if the full $160,000 is returned, they're due another $8,000 or so each. Two of the non-profits were to receive 10 percent of the estate, so in this instance they'll be due about another $16,000 each.

Relatedly, how does Kelly cover his tracks on the missing money? He could, and I'm guessing probably will, file a revised inventory that accounts for the money he later removed. This wouldn't be the kind of revised inventory that is typical in probate cases, where the executor discovers a bank account that no one knew existed or some property that eluded the grief-torn family members of the deceased right after death, and the executor is properly catching up where there was no ill intent. Rather, if Kelly files a revised inventory, he's admitting that the previous inventory was incorrect, and it looks a lot like it was incorrect not because of some oversight, but because Kelly was purposefully not disclosing the money he removed. That, in turn, raises the question: Did Kelly knowingly swear to a false court document, the inventory?

The Kearney Lake property. The Coast first reported on the Thibeault estate on March 24, 2011, in an article headlined "Peter Kelly's failure of will." At that time, we still had not uncovered the missing $160,000, but we raised issues of the long delay in resolving the estate, and especially about a tiny property that Thibeault owned at her death. The small lot was just 7,500 square feet and assessed at $3,500, and sits in the scrub land back behind Kearney Lake.

When we published that article, we raised issues about a possible conflict of interest for Kelly: the property may not be worth much in and of itself, but it is a possible access route for developing large parcels farther back into the woods. As mayor, Kelly had voted on issues related to the larger parcel, and we questioned whether he should have recused himself. So I asked Kelly about it directly, at a Tuesday night city council meeting, and he declined comment. But the next day Kelly called me at my office. Here's how I reported it in 2011:

Wednesday morning, Kelly called back to explain Thibeault's property. "That land is being donated to the municipality for parkland, so that's why you caught me off-guard [the previous night]," he said. "When I spoke to the lawyer, it's in the process of being done, so there's no---it's going to go to the municipality as parkland. It's going to them. It was always the intent to go to them in memory of [Mary Thibeault] and that's in the process of being done."

Wouldn't such a donation have to be approved by all the other heirs?

"It would come out of my portion, as I understand it," answered Kelly.

"That was already planned," said Kelly of the parkland donation. "It's already in the process of being worked on, and will be going to them as was the intent."

When did it become the intent?

"That was a year or two ago, but it hasn't gone because the estate's not closed yet, so it's not yet done."

The Coast contacted officials in the city's planning and real estate departments, but none were aware of a possible donation of Thibeault's land. "A donation would first have to be reviewed by the planners," said Peter Stickings, manager of real estate "and then approved by city council."

In the intervening year and a half, I've occasionally checked back with the city to see if there's been any mention of a parkland donation from the Thibeault estate. There hasn't.

Kelly told us in 2011 that the parkland contribution would "come out of my portion." But according to the cheque register for the estate, which we examined for this year's investigation, Kelly has paid himself what he considers to be the full amount he is due from the estate—$25,000. Also, as of this writing, the Kearney Lake parcel has not been liquidated by the estate—it's still in Thibeault's name, ad as administered by Kelly. So how does he contribute parkland "from his portion" of the estate?

Relatedly, tax records aren't public record in Nova Scotia, but there's no evidence in any of the documents filed with the court that the estate has paid property taxes on the parcel for over seven years. Granted, the taxes due won't be much. I haven't bothered to calculate them, but it will be far less than $1,000 for the entire seven years, I think. Still, I've seen plenty of properties go to tax sale because of non-payment of taxes, in much less than seven years. And often these properties are tied to estates, just as Thibeault's is. So why hasn't the city started tax sale proceedings against the property? I've asked that very question to city staff today, and they said they'll get back to me tomorrow.

US bank account. I'm told that Thibeault had both Canadian and US citizenship, and that she collected US social security payments. In the court record, there is a letter from Kelly to Thibeault's sister, Patricia Richardson. Kelly was responding to an earlier letter from Richardson to the court, complaining about the long delay in resolving the estate.

As you are aware," Kelly told Richardson in the letter, "you have received your allocation of the estate both here and in the States other than your appropriate share of those that predeceased as per Mary's instructions [emphasis added]."

In all the records reviewed by The Coast—that is, the public court documents and the bank records of the estate and Thibeault's personal bank account—nowhere is there any record that any Thibeault property in the United States was sold or otherwise liquidated to become part of the estate. (In fact, one piece of Thibeault's US property—a trailer in Florida—appears to have been simply sold by the trailer park owner as abandoned property, but that's an issue for another day.)

So what was Kelly referring to when he said that Richardson had "received [her] allocation of the estate both here and in the States"?

I have suspicions that Thibeault had significant property in the United States at the time of her death, including a US bank account into which her Social Security payments were placed. I stress that I haven't yet been able to prove that. But if such an account existed, what happened to it?

Whatever the answer to that question, it's clear that the story about the Thibeault estate is a long, long way from its final chapter.

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