The bankruptcy trustee representing creditors of a Texas financial firm accused of defrauding investors out of $1.3 billion alleges that the company's former head used an animal-welfare charity to evade taxes and steer millions of dollars to his mistress, according to Bloomberg. Trustee Thomas Moran II claims money earmarked by Waco, Tex.-based Life Partners Holdings for Happy Endings Dog Rescue went to the personal use of the charity's founder, who was involved with ex-Life Partners CEO Brian Pardo.
Happy Endings, established to help large dogs in need of homes, received about $16 million of the money invested in Life Partners, which sold shares in life-insurance policies on the elderly and terminally ill before filing for bankruptcy last year. Happy Endings failed to pay for many of the canines in its care and eventually abandoned 250 animals to another rescue group, Mr. Moran charged in court papers filed Friday. A lawyer for Mr. Pardo said the suits filed by the bankruptcy trustee have "little, if any, validity."