Mitchell Dabo is a financial advisor and SBC Board of Education president

After a five-year battle, a long time Hollister financial advisor must pay more than $1.7 million to the Community Foundation for San Benito County, a judge in Hollister ruled Monday, Nov 13.

Mitchell J. Dabo did not show up for the highly anticipated court showdown over a lawsuit filed in 2015 by the foundation for damages resulting from missing trust fund money.

The case was to determine if Dabo was liable for hundreds of thousands of dollars left to the foundation by the Tony and Barbara Matulich charitable trust, but instead he was alleged to have diverted the funds for his own use which included a Hollister real estate deal that went sour.

And there was testimony in court that suggested he might even have used some of the trust money to pay for his personal hair replacement treatments.

After CFFSBC attorney John Clark outlined the case against Dabo, it took San Benito County Superior Court Judge Marjorie Laird Carter less than a minute to announce her decision and rule against Dabo, who also is president of the San Benito County Board of Education.

She awarded the full amount the foundation was supposed to have been paid in 2012 after Barbara Matulich’s death, plus more than a half million dollars in accrued interest.

Mr. Matulich passed away in 2003, two years after the elderly couple created their trust fund to give them income in their later years and to benefit the community in which they’d been successful farmers for many decades.

Carter also allowed Clark’s request under state probate law for double damages, because the taking of funds was found to be willful and self-dealing.

It was unclear whether the civil case outcome will prompt criminal charges against Dabo, who has been in business for more than 30 years as The Dabo Financial Group and Mitch Dabo Associates.

The company motto is, “Sleep Well At Night Solutions.”

The subject of criminal proceedings was discussed very briefly by Clark and Carter after her ruling, when the CFFSBC attorney informed the judge that the San Benito County District Attorney Candice Hooper had been informed of the missing trust funds and Dabo’s failure to hand trust assets over to the foundation. Carter said the DA’s office had met with the foundation over the matter.

Hooper had earlier told BenitoLink that after looking at the foundation’s evidence, she had declined to pursue a criminal complaint against Dabo.

It’s unknown if she will now revisit the matter in light of the Monday court decision, or if the state Attorney General will open a criminal investigation, which it is empowered to do since being notified of the matter by Clark.

Reaction to the court decision was immediate and positive.

“Oh my gosh, that is just great,” said Matulich daughter Toni Brady, 67, of Hollister after hearing of the judge’s decision soon after it was rendered.

“I have chills,” she said, “It’s just what I wanted to hear; my parents would be so thrilled and I am just beside myself.”

The total judgment against Dabo was for $1,740,618.98. It includes the starting trust fund balance when Dabo took over its management in 2008, $643,599, minus $82,000 he paid to the foundation after it demanded its funds, and interest of nearly $309,000.

The total in principal and interest owed came to $870,309.49, which was then doubled, apparently largely because it’s against state law for a trustee to use trust funds for his own benefit or in any way that undermines a beneficiary’s interests, according to legal experts.

Dabo was accused of having done so, as Clark put it, “willfully” and in a self-dealing manner.

Clark, during the approximately two-hour court trial offered testimony about one situation in which a sum of trust fund money paid for, according to the paper trail, a “hair replacement,” but details of that and other Dabo financial dealings remain largely unknown, he told the court.

Often, the trust fund would be depleted to “zero,” he said, as Dabo moved funds in and out; at other times it would have $1.29 as the remaining balance, or as much as $1,000 in some cases after Dabo’s machinations.

That judgment figure also is likely to increase by close to $100,000 for the foundation’s legal fees, which will exceed the initial estimate of $80,000, according to Gary Byrne, CFFSBC executive director and chief executive officer.

Byrne was ecstatic after the verdict, and relieved about the message it sends to the community and potential donors to CFFSBC, which helps support dozens of small nonprofits in San Benito County.

“I’m glad it’s over,” he said. The outcome, he added, shows that “…if you give to the foundation, we’re going to protect (the donation) to make sure the donor’s interest is honored.”

As the sole beneficiary of the Matulich Charitable Trust, the foundation had tried since 2012 when Mrs. Matulich passed away to secure the fund’s remaining assets.

Dabo, who was the trustee for the account, according to the lawsuit, did not inform them of her death and never produced a full accounting of where the funds went.

After several tries, Dabo did send a check for about $82,000, but claimed that was all that was left in the fund, according to Byrne’s testimony.

The case also has gone to court mediation twice, without a successful outcome.

At one point, Dabo offered to pay the foundation $50,000 a year for 10 years, but the CFFSBC board of directors rejected the offer because it wanted the full amount to which it was entitled and to insure the community that donations would be protected.

Byrne was the only witness at the Nov. 13 trial in San Benito County Superior Court.

In his offer of proof, CFFSBC attorney John Clark of Morgan Hill presented example after example of Dabo improperly diverting trust fund money to his personal use via an electronic link between the two accounts, while always paying Mrs. Matulich $3,000 a month as her income from the account. He said personal use by Dabo of the trust fund money was a violation of the law.

Clark said it’s still not known what much of the money was used for, but his comments at trial made it clear that at least $450,000 was given as unsecured loans to a business partner, Jack Tyler, of Hollister. They money was used by a partnership that included Dabo to buy real estate, which the partnership later defaulted on, according to Clark.

Tyler died soon after and his estate went into bankruptcy, according to testimony.

Clark said after the trial that he will now seek a formal order that Dabo pay the money and that the foundation will seek a full accounting of all of Dabo’s assets, including his home, in order to collect all the money the a court has now determined is owned to the foundation by Dabo.

Dabo has been an elected county school board member since the 1990s and has often spoken at graduation ceremonies.

He has in the past declined to discuss the case with BenitoLink.

A second trial began right after the first to determine if a $40,000 loan from the trust fund to Dabo’s business partners must be repaid to the foundation. The plaintiff and attorney in that case were in court.


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