A 74-year-old Laguna Beach man who ran a business in which he operated as the executor of wealthy people’s estates pleaded guilty Monday, Aug. 12, to embezzling almost $6 million from his clients over several years, authorities said.
David Robert McDonnell also pleaded guilty to one count of wire fraud.
According to his plea agreement, from 2018 to January 2024, McDonnell ran McDonnell Business Services, a Laguna Beach-based company located on 3rd Street.
Through his company, high-net-worth individuals hired McDonnell to be the executor of their trusts.
As an executor, McDonnell managed the trusts’ assets and, when the individuals died, sold them to distribute the proceeds to the trusts’ beneficiaries. Instead, McDonnell pleaded guilty to liquidating the assets and diverting the money to his personal bank accounts.
The Laguna Beach Police Department launched an investigation when a beneficiary from one of the trusts contacted the LBPD Detective Bureau. The department reported the investigation discovered other inheritors of trusts who did not acquire disbursements.
The U.S. Attorney’s Office said McDonnell admitted to misappropriating approximately $5.9 million from about four trusts in his plea agreement.
In August 2020, authorities said McDonnell wrote a check for $300,000 from the account of a victim trust located in Capistrano Beach to his own personal bank account. Bank of America processed these funds through computer servers in Texas.
Other victims, other than immediate family members of the deceased, included UC Irvine, earmarked for pancreatic cancer research, Children’s Hospital of Orange County and the USC’s Athletics Department, the police wrote in a report.
“I’m proud of Detective Joy Butterfield and the investigative team who brought justice to the families who were victimized,” said Chief Jeff Calvert.
United States District Judge James V. Selna scheduled a Dec. 9 sentencing hearing. McDonnell will face a statutory maximum sentence of 20 years in federal prison at that hearing.
The FBI and the Laguna Beach Police Department continue to investigate this case.
The LBPD reported it asked for the FBI’s help due to the need for forensic accounting and the United States Attorney’s Office for prosecution. Because of this joint effort, McDonnell faces up to 20 years.
Assistant United States Attorney Jennifer L. Waier of the Santa Ana Branch Office is the prosecutor.
