FARMINGTON HILLS, Mich. (WXYZ) - How did a Farmington Hills man lose out on tens of thousands of dollars of his rightful inheritance to total strangers?
It’s a drama that played out between several different courtrooms, and it’s all part of a controversial probate practice that 7 Investigator Heather Catallo has been investigating for more than a year.
This case raises a lot of ethical questions about conflicts of interest. Now, the 7 Investigators have learned that this is going to be referred to the Attorney Grievance Commission for a full review.
It’s a tale of grief, greed and real estate, and here are the key players:
The heir who was due hundreds of thousands of dollars-- Scott Lenheiser, who was mourning the death of his mother, Marjorie.
The maestro behind the scenes: Macomb County real estate broker Ralph Roberts.
And the lawyer: former Wayne County Public Administrator Joseph Xuereb.
It all started when Trademark Properties of Michigan purchased Marjorie Lenheiser’s condo at Sheriff’s sale back in July of 2014.
The owner of Trademark Properties, Brad Stefanko, says he was working with Scott Lenheiser who wanted to redeem his late mother’s property. But their hands were tied because Xuereb and Roberts had opened the Wayne County probate estate in Marjorie’s name, giving them the power to sell the pricey Northville condo.
“They controlled all the shots, they controlled how much they sold the condo for, they controlled, in essence, Mr. Lenheiser’s future as well,” Stefanko told 7 Investigator Heather Catallo.
The 7 Investigators have been exposing this controversial probate practice where Attorney General appointed lawyers called Public Administrators team up with real estate brokers like Roberts to cash in on probate estates.
Roberts company, Probate Asset Recovery, often took 1/3 of the value of the assets in the estates.
“I find properties. I believe there’s a benefit, so I then tell a Public Administrator, here’s the benefit there,” Roberts told the 7 Investigators in November of 2016.
The Marjorie Lenheiser estate contained many assets. So why did her son nearly lose both her condo – and his own condo -- to foreclosure?
“It was, in my opinion, egregious for how much money was siphoned out of this estate, when there was clearly an effort by the heir to make good on the debts,” said Stefanko.
Even though Stefanko has emails from Scott Lenheiser that say “Joseph Xuereb DOES NOT represent me or the estate,” Xuereb and Roberts sold the Northville condo for $282,500 in December of 2014.
“From that point, he could have given the money to the heir,” said Stefanko.
But court records show, Scott didn’t receive his inheritance for at least six months. In the meantime, his own condo went into foreclosure.
And that’s when things get weird.
Xuereb filed a petition for conservatorship in a different court, this time in Oakland County. In order to get someone appointed as a conservator over Lenheiser’s assets, Xuereb alleged Lenheiser could not manage his affairs due to “mental illness” and “mental deficiency.”
In an affidavit, Xuereb says he had yet to even communicate with Lenheiser, but wrote that a neighbor said she thought Lenheiser was “crazy.” The judge denied that petition.
“Why did you try to get another public administrator that was tied with Ralph Roberts – like you were – to take over his finances,” Catallo asked Xuereb.
“But he wasn’t deemed to be incompetent. She [the Oakland County Public Administrator] didn’t take over his finances, so it doesn’t matter,” said Xuereb.
But it did matter to Lenheiser’s financial distress.
An independent guardian assigned to assess Lenheiser for the conservator case said, “Had the Petitioner [Xuereb] made distribution from his [Lenheiser’s] mother’s estate, rather than commencing this proceeding, he would have been able to redeem…” his own condo.
“Why did you tell the court he was mentally deficient,” asked Catallo.
“I don’t want to bring back some awful petition, that embarrassed Mr. Lenheiser who subsequently became my client. It’s not a subject I’m interested in getting involved with on camera,” said Xuereb.
“Does Judge Burton know he became your client,” asked Catallo.
“I don’t know,” said Xuereb.
In fact, there was a lot that Wayne County Chief Probate Judge Freddie Burton Jr. wasn’t told about the Lenheiser estate, prompting him to re-open it just last month.
“It should have been brought to this court’s attention,” said Judge Burton during that hearing when he questioned Xuereb. “I should have been made aware of the fact that there was a matter brought by you, in your capacity as Public Administrator in another court, to have a person who’s going to consent to the relief sought, adjudicated as incapacitated and not able to make decisions.”
Ultimately, Scott Lenheiser received at least $145,000 plus some other assets, and he was able to save his home.
But court records show Ralph Roberts got $91,652.05 from the probate case and real estate commissions.
And Joseph Xuereb walked away with $18,621.15 in attorney and fiduciary fees.
As the result of our reporting, all the Public Administrators (including Xuereb) involved in this have now either resigned or been terminated.
We did try to talk to Mr. Lenheiser about this situation, but he has not gotten back to us.
There is also an on-going criminal probe into this probate practice, and new legislation to change the Public Administrator law is moving through the state legislature right now.