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Taking out large sums of money in the form of property loans and later paying them back is one method that a judge might employ to conceal the fact that he or she is being enriched from an outside source. When a judge’s income is inadequate to serve as the source of loan repayments, it is likely that the funds are coming from somewhere else.

JANET PHELAN
September 11, 2009

SAN BERNARDINO, CA — Several years ago, all of the county’s probate and conservatorship cases were moved to the Redlands Courthouse, and most of these cases were subsequently heard by Judge James M. Welch.

Recent documents obtained by the Sentinel point to suspicious financial activity by Welch, who at one point in time was the presiding judge of San Bernardino County. Welch was featured in an article in the Sentinel on June 12th of this year in a lengthy exposé regarding questionable business practices by Melodie Z. Scott, a professional fiduciary and conservator for the elderly. Scott is President of C.A.R.E., Inc., located at 25 E. State Street in Redlands, right around the corner from the courthouse.

The activities by Scott cited by the Sentinel as questionable involved giving conservatee property to her own family members, overcharges on her clients’ accounts, missing monies from clients’ accounts, selling conservatee property at bargain basement rates only to have the property jump in value and resold the next year, withholding medical care from conservatees resulting in death, and allegations of possible undue influence on judges.

The documents uncovered relating to Judge Welch reveal that he has mortgaged his primary residence, located in the 300 block of La Colina in Redlands several times in recent years, encumbering it with loans which could not possibly be paid back on a judge’s salary in the brief turn-around time indicated by the reconveyances (repayment of loans). The document numbers and the size of the loans follow:

In 1998, Welch and his wife, Ginny, took out a loan for $217,200 on their La Colina residence, which was fully paid back in March of 2003. The reconveyance document number attached to this transaction is 2003-0173087.

In February of 2003, James and Ginny Welch took out another loan on their residence, this time for $234,000. This was fully paid back by June 10, 2004, as listed in document number 2004-0410928.

Another loan was taken out by the Welches on May 17, 2004, as listed in document number 2004-0353533. This loan was for $358,965.71.

Messages were left with Welch’s secretary, inquiring as to where the money was going and how he was paying these loans back. The possibility that Welch was taking out loans and investing the money, then paying back the loans with the proceeds was considered and discarded. For the last seven years, Welch has reported to the Fair Political Practices Commission on his form 700 financial disclosure statements that he has no investments.

A query was also left with Judge Welch’s secretary as to three property transactions recorded in neighboring Riverside County, attributed to a James Michael Welch, Trustee.

Judge Welch has declined to comment. Presiding judge Jim McGuire issued a terse letter on August 12th, 2009, in response to an inquiry from the Sentinel about the Welch loans and Riverside County transactions. McGuire stated:

Please be advised that I have received and reviewed your letter of August 11, 2009. Please be further advised that I am an administrative presiding judge and, therefore, my review jurisdiction is limited. Nothing contained in your letter is of a nature over which I would have review jurisdiction. Any request for review or investigation by me is, therefore, denied.

There has been no confirmation or denial from the court as to whether Welch’s exodus from his probate assignment in Redlands had any bearing on the recent media scrutiny given his actions as a judge or his apparent bias towards cases involving Melodie Scott, who recently launched a legal protest concerning the denial of her fiduciary license by the California Professional Fiduciary Bureau.

This practice of judges taking out large loans appears to be widespread and crosses county boundaries. Information gathered on Commissioner John McCoy and Judge Sharon Waters (both of Riverside County) has recently been turned over to a Riverside County district attorney investigator, Jeff Chebahtah. While Chebahtah has acknowledged receipt of the information on the Waters and McCoy loans, he has at press time refused to assign a complaint/case file number. The practice of accepting evidence and refusing to assign a tracking number has been previously explored by this reporter in an article entitled: “How the California Justice System covers up crimes against the elderly: A method to the madness” and appears to be deployed when either the matter is too trivial for the district attorney to take seriously or when there is a political agenda to keep the report out of the system and thus not to investigate at all.

Parenthetically, both McCoy and Waters were recently and consecutively removed from an active case in Riverside Superior Court, following a protest lodged that the loans smacked of pay-offs or bribes.

In San Bernardino County, Judge Steven Mapes ascended to the bench in 2007 and currently sits on Barstow court, following his tenure as an deputy district attorney in San Bernardino. Mapes has also been involved in the loan program, apparently going back to 1998, when he took out a loan on his home on Patricia Drive for over $155,000. He subsequently took out further loans on his property, including loans for $100,000 in 2001 and 2002, another loan for $307,500, also in 2001, one for $88,500 in 2002 and a loan in 2004 which was in excess of the value of the house, recorded at the tax assessor’s office as $427,528. This loan was taken out for a resounding $493,000.

More recently, in 2006, he again borrowed money against his property. Since 2001, Judge Steven Mapes has received seven different reconveyances on his loans.

Judge Mapes did not return calls from the Sentinel inquiring as to who was paying back these loans.

From: Janet Phelan, “Judges Involved in Multiple Property Reconveyances,” The San Bernardino County Sentinel, Rancho Cucamonga, CA, September 11, 2009. Janet Phelan is an investigative journalist. She can be contacted at janetclairephelan@yahoo.com. Reprinted in accordance with the “fair use” provision of Title 17 U.S.C. § 107 for a non-profit educational purpose.

Addendum

In 2016, Janet Phelan reported¹ on the case of Leonard Holzapfel, a former Common Pleas Judge in Jackson County, Ohio.

Between 1993 when he ascended to the bench and 2013, Judge Holzapfel, who retired in 2012, had taken out and then repaid 18 separate loans totaling $2,400,000.

Phelan surmised that those loans exceeded the judge’s ability to repay based on his salary alone, and suggested the repayments may have been a means of laundering money from sources the judge desired to conceal.

In part, her assessment was based on the failure of Judge Holzapfel to disclose his levels of income on mandated, yearly financial disclosure forms filed with the Ohio Supreme Court. Phelan’s report underscores how real estate transactions, which tend to evade public scrutiny, make it easy for judges to conceal questionable sources of income.

Janet Phelan, “Too Big to Fail, Too Big to Jail Also Applies to ‘Remoras’,” Activist Post, September 30, 2016, http://www.activistpost.com/2016/09/too-big-to-fail-too-big-to-jail-also-applies-to-remoras.html, accessed 02/26/2017. The author can be contacted at janet_c_phelan@yahoo.com.

Addendum Part 2 (Re: Investigative Journalism)

In 2017, Janet Phelan posted² the following message describing her interaction with a representative from a U.S. attorney’s office:

Following the accumulation of evidence that judges are laundering bribes through their home loans, I called the US Attorney’s office in Los Angeles today, asking to speak with someone in the public corruption unit.

I shortly received a call back from a Marve Williams, who identified herself as working in the citizens complaint division of that office.

I explained to her that I had amassed evidence pointing to criminal money laundering by California judges.

Ms. Williams informed me that the Department of Justice has no jurisdiction over judges. “You will need to contact the Commission on Judicial Performance,” she intoned. “Judges police themselves.”

“Ma’am!” I replied. “If judges break the law they are held to the same measure as anyone else. These may be federal crimes and your office indeed has jurisdiction!”

Marve tried to argue this point with me but was clearly losing the battle of words. She then took another tack.

“You are not allowed to report on this conversation or to quote me,” she informed me.

“Ma’am!” I yelped. “I identified myself as a journalist in the first minute of our phone call. You cannot inhibit me or instruct me from reporting what transpired here.”

“You are not permitted to report this,” she retorted.

“Bull puckey!” I replied.

And then Marve disconnected the call.

I called back through the main number for the office and left a scathing message for Marve’s boss, attorney Brandon Fox. I am taking bets as to whether he calls me back or not…

Janet Phelan, From a message posted March 13, 2017 to: https://groups.google.com/group/judicialmisconduct, accessed 03/15/2017.

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