Bankrupt SLO County nonprofit paid for a house and cars. Were they for business?
Before it went bankrupt in August, a longtime San Luis Obispo County home health and hospice nonprofit paid for the rent on a house in Texas and bought three cars using company funds.
Now, federal bankruptcy trustees are questioning whether the purchases — made by Wilshire Health and Community Services — were business related, or rather personal uses of company funds.
At a bankruptcy court meeting on Oct. 24 — which a Tribune reporter attended online — former Wilshire CEO Tricia Smith was questioned about the house and car purchases.
Smith’s lawyers did not respond to The Tribune’s detailed questions and request for comment.
House in Texas paid for by now-bankrupt nonprofit, CEO says
For three years, Wilshire rented a home at 7212 23rd St. in Lubbock, Texas, where the company set up a new office in 2022 and where Smith’s daughters attended college, Smith said at the Oct. 24 meeting.
According to its Zillow listing, the 2,078-square-foot single family home has four bedrooms and two bathrooms. It had a market value of $309,000 when it was built in 2022.
At the meeting, Smith said the house was used by executive employees “in lieu of expensive hotels when we were traveling there” for business. She previously told The Tribune the same in July.
Smith said the office was set up around March or April 2022 and opened that June for Wilshire Business Partners, one of Wilshire’s for-profit branches that managed its business clients.
The motivation for expanding to Texas, she said, was because Wilshire “had obstacles and struggles in trying to recruit and retain” in California.
Growing to Lubbock gave them “access to potential employees with the university being there” and more ease in serving their Central and Eastern time zone clients.
Wilshire Business Partners had clients in Utah, Arizona, California, Texas and New Jersey, Smith said.
Seven or eight employees worked at the Texas office, including two sales people, four or five billing and eligibility staffers and a director of operations, Smith said.
The lease on the home started around the same time the office opened in June 2022.
The house’s $2,300 monthly rent — which went up to $2,500 in the last few months of the lease — was expensed to Wilshire Business Partners, according to Smith. For a three-year lease, that amounts to more than $83,000 charged to the company.
Smith’s two daughters, who were part-time Wilshire employees and went to Texas Tech University in Lubbock at the time, lived in the house off-and-on from June 2022 to November 2024 “to receive equipment ... before we opened the office, and also make sure that things were safe in the home,” Smith said.
Neither daughter paid rent to the company while living in the home, nor did they receive a 1099 tax form that would’ve listed the benefit of rent as a form of income, because “they were providing a service,” Smith said.
Smith said the house had to be kept safe and personal items of value, furnishings and computer equipment protected when executive employees were not there. The home had locks, she said.
Nancy Zamora, the court-appointed bankruptcy trustee managing Wilshire’s case, asked why Smith’s daughters were living at the house full-time as opposed to only while they were “performing services for the corporation.”
“If this is a nonprofit corporation, that was — that they were not just there while they were performing services for the corporation, but they know they are living full-time, why is that?” Nancy Zamora, the court-appointed bankruptcy trustee managing Wilshire’s case, asked at the Oct. 24 meeting.
“I’m trying to get a sense of who was actually living in and using the residence, how ... the company was being compensated for any rent,” Zamora said. She requested a record of every executive or employee who stayed in the house when traveling to Texas.
“I want to understand whether it was actually being properly used for business purposes,” the trustee said.
“It was mostly used for my benefit,” Smith responded.
Smith visited the home “at least monthly and at three weeks at a time,” or a total of six months a year, to help set up and run the new office, she said. She said at one point she was spending more time in Texas than in California, and before Wilshire leased the home, was spending more in hotel visits and car rentals than the monthly rent.
Two other executive employees also regularly stayed at the home: Susan Dailey, the vice president of reimbursement, would travel to Lubbock at least once a month for a week at a time because much of the Texas offices’ staff was under her supervision, and Wilshire’s former vice president of business development, Mark Wilson, “did the same type of thing,” Smith said. Wilshire’s vice president of human resources, Dave Oliver, who was also a board member, traveled to Texas once around January 2024, she said.
When Wilshire closed its doors in June, everything was moved out of the office and Wilshire stopped paying rent on the space, Smith said at the Oct. 24 meeting. She took over the lease on the house and now lives there full-time.
”I’m a Texas resident,” Smith said.
What about the company cars?
Wilshire bought three company cars for its various branches over the years: a truck for the company’s Hope Chest Thrift Store, a van used by Wilshire Community Services’ patient transportation program and a Jeep used by Smith for transportation between Texas and California, Smith said at the Oct. 24 meeting.
Wilson and Smith occasionally traveled to Texas together in the Jeep, but he did not use the car on a regular basis, she said.
Smith also had a personal vehicle she used from time to time, she said. Similarly to the records requested for the house, Zamora requested logs of when Smith used the corporate vehicle versus her personal vehicle for business travel.
Smith said she doesn’t believe she reimbursed the company for any personal use of the Jeep because it was primarily used for business.
“I may have stopped in at the store on the way home from the office, or you know stopped along the way, that type of thing, but it wasn’t used for personal use,” she said.
Smith said all of Wilshire’s administrators and some sales people may have had cars for business use at some point, but not in the last five years.
None of the Texas employees, including Smith’s daughters, were supplied company vehicles, she said.
All three cars were sold at fair market value prior to Wilshire’s closure, Smith said.
A Hope Chest volunteer previously claimed to The Tribune that when the thrift store closed, Smith’s father, who did occasional work for Wilshire as a handyman, first said he bought the store’s delivery truck, but then said instead a friend bought it because “it would be unethical” if he had.
Board meetings and business devices
After addressing the house and cars, the conversation during the Oct. 24 meeting then turned toward how Wilshire managed its board meetings and corporate devices.
Smith said Wilshire’s remaining physical inventory of board meeting minutes and materials, patient and financial records and company devices, such as phones and computers, are stored between two storage locations in San Luis Obispo: Vital Records Control and Meathead Movers.
Smith said “there’s no real organization” to the items in storage.
“We had days to get everything off site, so we tried to label everything that we could,” she said.
When asked about Wilshire’s process for taking board meeting minutes, Smith said she took the minutes instead of the board’s secretary, Ted Greenberg, and then presented them to the board chair, Ira Alpert, who approved or made changes before they were then sent out to the board members ahead of the next board meeting. The would then be approved at the subsequent meeting.
When asked why Smith took the board minutes as opposed to Greenberg, she said she was “not sure why he didn’t do it.”
Most of the board meetings were fully open to administrative staff, Smith said. Usually 15% of each meeting was spent on closed executive session until the last few board meetings, which were entirely board members only, she said.
The board also began having more private conversations when the Department of Justice audited Wilshire’s hospice patient stays for compliance with Medicare, which ultimately led to a $750,000 settlement, “because of the confidential nature of that,” Smith said.
Smith also said it was “not part of our practice” for vendors and contractors to attend the meetings, nor did Wilshire publicly post meetings, but non-board staff members were included and minutes were posted after meetings.
“A nonprofit corporation is supposed to have open board meetings,” Zamora said. “ ... I’m just trying to determine the accuracy of the minutes and the accuracy and how open the nonprofit was and whether it complied with law.”
The board minutes, books, records and electronic devices in storage that belonged to Wilshire are now all the property of the bankruptcy estate. That includes 20 to 50 computers and over 100 iPads and over 100 iPhones, Smith said.
Company iPhones and iPads were issued to the majority of Wilshire’s staff before cost cuts started, Smith said.
Smith had a company laptop, but chose to use a business line that would forward to her personal phone in lieu of having an additional company phone, she said. Zamora requested access to both.
However, she said nothing would be left on her phone if the bankruptcy estate searched it.
“If I got a voicemail related to work, I deal with it and delete it because ... on your device you only have a limited capacity,” she said. “I did never save those.”
Smith said it was “a habit to clean up my phone,” and wouldn’t have any business voicemails or text messages left on her phone because the line was disconnected when Wilshire closed.
Zamora then called Smith’s business line, and her phone rang.
“I thought they were all turned off,” Smith laughed. “This is really strange.”
She maintained she has not gotten any calls, texts or voicemails on the business line since Wilshire shut down.
Smith said that she bought her company computer for market price upon closure in order to use it for whatever was needed during the closure and bankruptcy proceedings.
Former CFO Barbara Jennings’ work phone and computer were also requested by the bankruptcy estate.
