Albuquerque trust company missing $4M in client funds, CEO silent


ALBUQUERQUE, N.M. (KRQE) – They were entrusted for decades to pay the bills of some of New Mexico’s most vulnerable people.

But millions of dollars in private funds under the control of an Albuquerque-based non-profit trust company is now said to be unaccounted for, and a state financial investigation is centering around the company’s CEO, Paul Donisthorpe, who’s made headlines in the past.

The New Mexico Regulation and Licensing Department (RLD) estimates roughly $4 million belonging to about 70 people is missing from the trust accounts of the Desert State Life Management trust company.

The money is said to belong to some of New Mexico’s most fragile individuals: people who are mentally or physically disabled, and incapable of paying their own bills.

RLD Superintendent Mike Unthank underscored the seriousness of the case in a recent interview with KRQE News 13.

“I just can’t emphasize what an egregious, outrageous thing this is,” said Unthank. “The most vulnerable of people are caught up in this problem.”

In an effort to intervene, RLD’s Financial Institution Division is now asking a state district court for a permanent injunction and receivership of the Desert State Life Management. Over the last several months, investigators have already taken custody of the majority of the company’s financial records.

READ: Court filing against Desert State Life Management

However, RLD believes the missing funds are already putting many people in jeopardy of missing payments on the most common and important bills for things like medical care, food, rent, and utilities. Desert State Life Management was in charge of making those payments for its clients.

“I mean, how would you feel if all of a sudden you got the phone call, and they said, ‘oh, by the way, you know the x-number of dollars you had, that you thought was in your account… is now zero, and we won’t be paying your light bill this month, sorry,’” said Unthank. “That’s the situation.”

Desert State Life Management’s (DSLM) financial problems came to light earlier this year when RLD’s Financial Institutions Division notified DSLM of a coming “examination,” or audit of the trust’s financial health and business practices.

Questions began piling up after DSLM failed to provide the state with the requested records, and the trust company’s CEO, Paul Donisthorpe went silent.

A court filing outlines the problems surrounding the trust and a bizarre story surrounding Donisthorpe, who made headlines in New Mexico starting in the late 1980s.

Past reports from the Albuquerque Journal describe Donisthorpe stepping down from a high-level state government position in 1989 following financial issues with the New Mexico State Fair.

In January 1990, Donisthorpe hit and killed an Albuquerque elementary teacher in a drunk driving crash. He was sentenced to two years in prison, but only served six months of the sentence.

In 2003, Donisthorpe was appointed to the state commission on higher education. He gave up the seat only a few days after his appointment following various news reports about his 1990 conviction.

In 2005, Donisthorpe was arrested for his second DWI after causing a three-car crash at the intersection of Coal Avenue and Locust in Albuquerque.

New Mexico Secretary of State records show “Desert State Life Management” has been in operation for about 30 years. Donisthorpe is thought to have been associated with the company since the mid-2000’s.

“It would appear from talking to some of his staff personnel, he was pretty much the man in charge of everything,” said Unthank.

Investigators say the trust fund paid out about $800,000 to clients for legitimate expenses in 2016. According to records, DSLM should have about $5.06 million in client assets left in its trust account. But investigators says DSLM only has about $926,000 remaining for all of its clients.

So where did the money go? According to the court filing against DSLM, bank records showed, “numerous draw-downs of funds from DSLM client trust investment accounts” that eventually transferred to accounts of Spectrum Capital Markets, LLC, Paul A Donisthorpe, LCC, Corazon Cattle, and Corazon-Pitchford, LLC on “numerous occasion over a time period beginning in August 2013.”

According to investigators, the companies are either fully or partially owned by Paul Donisthorpe. Investigators believe some of those companies operate in other states outside of New Mexico.

“We’re noticing activity of an interstate nature,” said Unthank.

As for Donisthorpe’s whereabouts, those are unclear. After the state opened its examination of DSLM in January 2017, investigators with the Financial Institutions Division contacted Donisthorpe again in February to update their timeline. According to investigators, Donisthorpe sent an email reply on February 10, 2017, thanking investigators for the update.

But since then, investigators say they haven’t seen Donisthorpe or heard anything from him. According to court paperwork, Donisthorpe’s wife contacted investigators on February 24, 2017, saying Donisthorpe had a stroke and possible brain damage.

However, state investigators don’t know if that’s true. According to the court filing, investigators have heard conflicting stories about Donisthorpe’s health.

No one was at the Desert State Life Management offices when KRQE News 13 stopped by on June 5. Several messages left for Paul Donisthorpe on various phones weren’t returned either.

According to court filings, DSLM has been operating without Donisthorpe, under the authority of a different acting CEO since March 2017.

Meanwhile, Donisthorpe and his wife own a second home in Angel Fire. The home is now on the market for almost $900,000.

While investigators are looking for more potential victims, and say they’re doing what they can to recover any missing funds, it’s likely a rough road ahead for the people who’ve relied on Desert State Life Management.

“What is the likelihood that the people who are missing money will get that money back?” asked KRQE News 13 Reporter Chris McKee.

“Pretty rare. Normally when it’s gone, it’s gone,” said Unthank. “That doesn’t mean that the state’s not going to take every extraordinary effort within our power to see what we can do to help.”

The Regulation and Licensing Department is encouraging anyone who’s had dealings with Desert State Life Management to contact them at 505-476-4971 or through email at

Superintendent Unthank said the case has been turned over to federal investigators for any possible criminal charges.

Unthank said RLD will also pursue legislative changes toward non-profit trust companies soon.

“We will as a division be proposing legislation in the upcoming 30-day session to make it a little more difficult to become a not for profit trust company in New Mexico,” said Unthank. “I believe that there is some weakness. That doesn’t do anything for these people who are victims, quite frankly, but it may be something that subsequently, down the road, will help others by tightening up that statutory law.”

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