A Hendricks County judge and former leader of the Indiana Judges Association is facing disciplinary charges stemming from allegations that he appointed a friend as trustee of an estate case, then failed to take prompt action upon learning that the man was not fulfilling his duties and was possibly stealing from the trust.
Hendricks Superior 1 Judge Robert W. Freese has been charged by the Indiana Supreme Court Commission on Judicial Qualifications with two counts of misconduct. According to a Notice of the Institution of Formal Proceedings and Statement of Charges, Freese allegedly violated four rules of the Code of Judicial Conduct, including Rules 1.2, 2.13(A)(1), 2.4(B) and 2.5(A).
The charges, filed in In the Matter of The Honorable Robert W. Freese, Hendricks Superior Court 1, 19S-JD-52, involve Freese’s friendship with Stephen Scott. On Jan. 13, 2005, Freese and Scott executed a mortgage document prepared by Freese by which Scott mortgaged and warranted his property to Freese and agreed to a $122,400 promissory note.
Under the terms of the agreement between the men, Scott would be released from the mortgage once he obtained refinancing, which he did in October 2006. Freese then executed a release of mortgage to Scott the following November.
Meanwhile, Freese appointed Scott as trustee over the Herbert Hochreiter living trust on Jan. 30, 2005, without disclosing to the parties his financial relationship with Scott. That conduct, the commission alleges, did not promote “public confidence in the integrity, independence, and impartiality of the judiciary, as (Freese) deprived the parties of the opportunity to lodge an objection to the appointment of Stephen Scott as trustee due to his having a financial relationship with Respondent.”
Then, after Herbert Hochreiter died in August 2005, Freese appointed Scott as personal representative of the estate, once again without disclosing the men’s financial relationship. As trustee, Scott was statutorily required to provide an annual accounting of the trust, but he failed to do so from 2006 through November 2009, despite being advised of his duty.
“From approximately August 25, 2007 through July 19, 2011, Stephen Scott embezzled $254,000.00 from the Hochreiter Trust and Estate,” the commission alleges. “On April 12, 2016, federal charges were filed against Stephen Scott, and on January 27, 2017, Mr. Scott filed a Petition to Enter Plea of Guilty to those charges.”
Scott pleaded guilty to federal charges of wire fraud, bank fraud and tax evasion after an investigation by Indiana State Police and the Internal Revenue Service. Indiana Southern District Judge Tanya Walton Pratt sentenced Scott in May 2017 to 30 months in prison.
“Mr. Scott’s actions devastated his victims who placed absolute trust in his financial management,” U.S. Attorney Josh Minkler said when Scott was sentenced.
During his time administering the trust and estate, Scott eventually submitted a partial accounting, but it was not in compliance with industry standards. Further, one of Hochreiter’s beneficiaries expressed concern about assets – specifically, gold bars – missing from the trust.
Scott sought to resign as trustee in January 2010 and relocated to Florida that same year. Freese then began receiving “various reports, by way of pleadings or other correspondence, that Trustee Stephen Scott was not compliant with court orders, was submitting deficient information on required accountings, and/or that there were discrepancies regarding the funds that Trustee Stephen Scott was entrusted with.”
Freese received these reports from November 2010 until May 2012, but he did not set the matter for a status conference until September 2012, according to the commission. Up to that point, a Hochreiter beneficiary had been requesting that Scott be held in contempt for ignoring the court’s orders that he provide accountings and other financial information.
Scott did not appear at the status conference as required, and Freese found him in contempt and entered a $579,784.08 damages award. That award was premised on findings that Scott withdrew or transferred hundreds of thousands of dollars from the estate to personal accounts. However, because of Scott’s incarceration on the federal charges, none of the funds have been recovered.
“Because of his relationship with Stephen Scott, Respondent’s judicial judgment was affected by appointing Stephen Scott to positions to which he had no prior experience and by providing Stephen Scott with repeated opportunities to rectify his behavior as Trustee and/or Personal Representative and/or by failing to take action on multiple occasions despite Stephen Scott’s repeated failures to comply with statutory accounting requirements, court orders to appear and show cause, and despite receiving reports of concerns about financial discrepancies and possible improprieties with the Hochreiter Trust,” the commission wrote.
Freese now has 20 days to file an answer to the charges, which were filed Wednesday. He is represented by Indianapolis attorney James Bell.
“Judge Freese is aware of the charges and is currently cooperating with the Indiana Commission on Judicial Qualifications,” Bell said. “As this matter is ongoing, we cannot make any further comment at this time.”
Freese resigned last week as president of the Indiana Judges Association.