Kenai doctor jailed on charges she stole more than $3 million from her mother

Posted: Wednesday, November 26, 2003

ANCHORAGE - A Kenai doctor was in jail Tuesday, charged with stealing more than $3 million from her mother.

Dr. Elisabeth Cole, 56, is facing federal charges of fraud and money laundering. She was arrested Friday by the FBI on a 46-count federal indictment. She made a brief court appearance Monday and is being held without bail at Anchorage Jail pending arraignment on today.

Anchorage attorney Darryl Jones said Cole will plead not guilty. He declined to comment further.

Cole's current problem comes on the heels of a $6.3 million civil judgment issued against her in state court this summer by a judge who called her "perhaps one of the most corrosive and destructive persons that this court has had the unfortunate opportunity to run into."

The FBI and the IRS were investigating Cole at that time, and agents from one or both agencies sat through part of the state court testimony.

All of Cole's legal problems involve the estate of her mother, Madeleine Cole, who died in 1998 in Anchorage at age 81, leaving an estate estimated at the time to be worth $7 million to $10 million.

According to court files, Madeleine Cole did not trust her daughter with money and so chose not to leave her estate to Elisabeth outright.

If Elisabeth had done nothing, the trust created by Madeleine's will would have paid her about $350,000 a year, according to a lawyer for the estate. Now she receives nothing and the estate has a $6.3 million civil judgment against her that included taking her Alaska Permanent Fund dividend last month.

The will provides that when Elisabeth dies, whatever money is left in the trust should be split between the World Wildlife Fund and St. Jude's Children's Research Hospital.

The money Elisabeth is accused of stealing, in the civil and the criminal cases, is about $4 million from the sale of her mother's Park Avenue apartment on New York's posh East Side. Madeleine sold the apartment about three months before her death.

Diane Vallentine, an attorney for the estate, said the estate has recovered about $2 million of the money. But as a result of years of civil litigation, much of which Elisabeth refused to participate in, she now owes huge attorney fees, court fees and continually accruing interest.

In 1999, a judge tried to persuade Elisabeth to turn over some tax records the estate lawyers needed, but she chose instead to spend five days in jail for contempt of court.

Elisabeth Cole could not be reached for comment Monday, but in past interviews she has questioned why the law is going after her since she is her mother's only beneficiary so the money is hers by right.

She said she was the one who insisted on a trust and turned down her mother's request that she be executor for the estate.

According to the federal charges, Elisabeth concocted a scheme to defraud her mother starting in June 1998, about six months before Madeleine died. She began forging her mother's signature on checks and using her mother's credit cards even before the $3.1 million transfer, the charges say.

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