Homeless dogs were among the victims of Life Partners Holdings Inc.’s former chief executive, who, after being accused of cheating investors out of $1.3 billion, must now fight claims he used an animal shelter to funnel money to his mistress.
Happy Endings Dog Rescue, allegedly started to help large canines in need of homes, instead left many uncared for as it helped Life Partners’ then-CEO Brian Pardo evade taxes, according to the suit, filed in Texas court as part of the company’s bankruptcy. The operation took about $16 million out of the hands of investors, who are estimated by a bankruptcy trustee to have suffered steep losses as part of Texas’s biggest fraud. Pardo is fighting the trustee’s claims.
Instead of going into the charity, millions of dollars a year went for the personal use of Pardo’s mistress, who founded the rescue in 2005, the lawsuit alleges.
“Happy Endings’ failure to pay for the dogs allegedly in its care is further evidence of its failure to serve its true, charitable purpose,” the trustee of the bankrupt estate, H. Thomas Moran II, said in the complaint. He’s seeking to get money back from the shelter, Pardo and his mistress.
The lawsuit, filed March 11, is one of several brought in recent days that seeks to claw back funds for investors. Brent Perry, a lawyer for Pardo, said the trustee’s suits have “little, if any, validity.”
Sued Everybody
“The trustee has sued almost everybody who ever got a dollar from Life Partners,” Perry said in a phone interview Monday.
The dog shelter abandoned 250 animals at another rescue operation, Camp Diggy Bones, in 2014, the trustee said, citing reports from other shelter owners suggesting even more dogs were left uncared for. Gene Mason, the owner of Diggy Bones, declined to comment in a phone interview Monday.
At one point, Happy Endings was receiving payments for more than 20 people who were no longer on its payroll, according to the complaint. Just before Life Partners’ bankruptcy, when Pardo learned he would no longer be paid, his mistress tried to provide him a salary through the charity, the trustee claims.
Waco, Texas-based Life Partners, which sold shares in life insurance policies on the elderly and terminally ill, defrauded individual investors, Moran has said in court filings as part of the company’s bankruptcy. Its current portfolio, which holds life insurance policies with a face value of $2.3 billion, includes over 22,000 investors in 100,000 fractional positions, representing $1.4 billion in invested capital at risk, Moran has said in court papers.