A well-known Silicon Valley trust manager whose boyfriend is suspected of stealing more than $17 million from family funds under her watch has been hit with a rare accusation from state authorities who want to pull her license due to "extreme departure" from professional standards.

Christine Backhouse, owner of Backhouse Fiduciary Services of Campbell, has 30 days to respond or she will automatically lose her state-issued fiduciary license.

When reached by a reporter at her office Wednesday, Backhouse simply stated: "I have no comment," and hung up the phone. But in the past, she has claimed she too was victimized -- by her unscrupulous boyfriend Leo Joshua Kennedy who is accused in federal charges of using his role as "controller" to secretly wire millions of dollars out of 35 Backhouse-overseen trusts over a two-year period.

If Backhouse now loses her license, that leaves the beneficiaries of more than $48 million in estate funds she currently manages in uncertain territory. But former clients celebrated the state action as long overdue.

Speaking for other family members who lost a total of $17.3 million in the theft from the tiny, close-knit office, Karee Oliver said she is "very happy and relieved" the state is finally taking action to hold Backhouse responsible. The Oliver family and several global charities lost about $2 million that had been set aside by family patriarch John Oliver, a Saratoga veterinarian, when he died at age 84.

"Our family has been very worried about other unsuspecting families hiring her, and the damage she could do to them and their loved ones," Oliver said. "The past is done, but the future -- we've got to stop that."


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In court records, Backhouse has maintained that it wasn't until February 2012 that she noticed the unauthorized wire transfers signed by Kennedy in 2010 and 2011.

But in documents served Tuesday, the chief of the state's Professional Fiduciaries Bureau described Backhouse's role in managing Kennedy as far too lenient. Backhouse gave Kennedy "unfettered access to her clients' assets that she was charged with protecting, failed to monitor or review accountings; and failed to adequately supervise" her office "President" and "Controller," the bureau's accusation states. Her failure to supervise and her "excessive delegation of her responsibilities," it continues, "enabled him to abscond with assets entrusted" to Backhouse in her role as estate manager.

If Backhouse challenges the state's accusation, she will be entitled to an administrative law process where she can argue her case to retain her license. Otherwise, she will have her license revoked or suspended in early January, and she will lose access to the $48,090,932 she now oversees, according to a bureau spokesman.

Kennedy's case, meanwhile, remains unresolved, as the higher courts ferret out judgment. In November 2102, he was indicted by a federal grand jury on 10 counts of wire fraud. The U.S. attorney's office described Kennedy's alleged theft from elderly people and their family members as a complicated "fraud scheme" that pumped millions of dollars into his personal investments and living expenses. Public records show Kennedy purchased a $1.2 million luxury home adjacent to a Snoqualmie Ridge golf course in Washington state in 2010, the same year his name appeared on unauthorized wire transfers from San Jose's Heritage Bank of Commerce.

But Oliver said Backhouse is clearly also to blame. "This was more than just being negligent and or incompetent," she said. "Josh and Christine have really hurt many people deeply, jeopardizing their health and safety."

Oliver noted that trust funds are often set aside by family members for relatives who are unable to care for themselves. "This is not just about money, this is about people's future security -- and with those moneys gone, what happens to those people?"

Contact Karen de Sá at 408-920-5781.