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Last updated on Monday, July 30, 2018
(BEDFORD) - The jury trial for an Indianapolis lawyer accused of stealing from special-needs trust accounts which was to begin Wednesday has been rescheduled for November 27, at 8 a.m. in Lawrence Superior Court I.
45-year-old Kenneth Shane Service is charged with a Level 5 felony charge of theft. He posted a $2,005 cash bond and was released from jail.
Two Lawrence County residents say Service stole more than $85,000 from their trust funds.
Service is representing himself. Judge John Plummer III will preside over the case.
Indiana State Police Detective Stacy Brown says authorities are investigating the possibility of "numerous victims in multiple states" involving Service. He says there are as many as 17 potential cases where money may be missing from special-needs trusts Service opened in Indiana, Florida and West Virginia, but there may be even more.
Investigators and attorneys who have intervened in multiple cases to remove Service from trusts he established and administered say the total amount missing is likely to run to at least several hundred thousand dollars.
Service was the founder of Carmel-based National Foundation for Special Needs Integrity Inc., before he was fired from the organization in 2014. Special Needs Integrity was ordered by the 7th Circuit Court of Appeals in February to repay the estate of a woman more than $234,000 that the organization took from her trust account after she died in 2011.
Service has not made any reimbursement to the trusts of the funds police say he stole.
The Indiana Supreme Court suspended Service from the practice of law in June for failure to cooperate with a Disciplinary Commission investigation launched in March, three months after he was charged in Lawrence County.
Brown wrote in a probable cause affidavit that Service stole from the accounts of two people in the Bedford area whose special-needs trusts the lawyer established and administered.
"The two Lawrence County victims have suffered a combined loss of over $85,522.29," the affidavit says. The charging information claims Service used money from clients' special-needs trusts to pay for personal expenses from casino trips to his dry cleaning.
After Service's first discipline matter was filed after he was charged in the two Lawrence County cases, court records show attorneys intervened to remove him from cases around Indiana where he had established special-needs trusts and designated himself trustee. In many of those cases, his removal appears to have come after the financial damage was done.
Brown, who investigated the Lawrence County thefts, alleged Service wrote checks for cash to himself from his clients' special-needs trust accounts. In at least one of those cases, he also had a debit card for the special-needs trust account that the client in Bedford told police he didn't know about.
That client also told police that Service had refused the client's multiple requests to access money from his trust to make needed repairs to his home and to buy a car. Brown wrote that after the client was contacted by his bank about money missing from his trust account, the client "called (Service) who informed him that he would be down to Bloomington to buy him a new car if he would stop talking to the bank employees."
The Bedford client said Service made good on the promise and wrote a check for a new Toyota, but the check didn't come from the client's trust account. Similarly, the charge against Service alleges he used the Bedford client's trust account to pay for a root canal and crown procedure for client in another county who had a special-needs trust Service managed.
"I feel that Mr. Service is using other trust funds in his control to pay for expenses on other trust funds and then claiming he is using his own money," the detective wrote in the probable cause affidavit. "Mr. Service will then withdraw funds from the trust fund that he claims is owed repayment ... and keep the money for his personal use."
Service used money he took from the Lawrence County trusts to pay for a stay and room service at the Blue Chip Casino in Michigan City, and to pay for at least 35 nights' stays at an Indianapolis Marriott hotel from March 1-April 10, 2016, the charging document alleges.
One of the Lawrence County cases involved a woman for whom Service opened a special-needs trust in June 2015. She had more than six figures in the account. She was counting on money in a special-needs trust Service opened to be a nest egg to provide care after she dies for a child with significant disabilities. The woman died that November, and her sister was tasked with closing the woman's estate.
Brown wrote that he asked the sister if she knew "any reason (Service) would make repeated trip(s) to the teller window at PNC Bank and withdraw thousands of dollars in cash from the trust fund" in late 2015 and early 2016. Brown said the sister replied, "there would be no reason at all for that to have been done."
Authorities allege Service stole more than $43,000 from that victim's account.
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