A local restaurateur was sentenced Tuesday to a year in jail for taking advantage of a 99-year-old woman who had appointed him as her trustee.
Despite his guilty plea, however, the defendant, Robert Clouston, said he borrowed money against the woman’s property to fulfill her goal of giving money to charity — not to help fund his restaurants. He owns Estrella and Robert’s Restaurant in Paso Robles and Robert’s Restaurant & Bar in Arroyo Grande.
“We didn’t take anything,” Clouston said after his San Luis Obispo Superior Court sentencing. “We didn’t steal anything.”
Clouston, 50, of Templeton, had previously pleaded no contest to two felony counts of theft from an elder with a special allegation of white-collar crime.
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The victim, Elizabeth Nelson, said she and her now-deceased husband, Raymond, appointed Clouston to be a trustee for their 17 acres of property in Templeton, hoping Clouston would bring commercial development to the land. Money made from that development, in the form of leases, would then be given to charity, according to the agreement.
However, the District Attorney’s Office charged that Clouston took the property out of the trust in 2008 without Nelson’s knowledge and placed it in his own limited liability corporation. He then took out two loans worth $500,000 on the property, according to the prosecution, and used it for his own benefit.
The prosecution says he used some of the loan money to pay rent for his businesses. But Clouston denied that.
He agreed to a plea, he said, to avoid the legal costs of a trial.
In a statement Nelson read in court, she said, “I know now that my continued involvement and belief in Bob Clouston was probably the biggest mistake of my life. In my world and for 95-plus years of my life, I believed that a person’s word was good. Well, I now know that that isn’t always the case.”
Clouston’s attorney, Jordan Cunningham, said his client was confused about the duties of a trustee.
“This isn’t a case where a white-collar defendant steals from somebody’s bank account and runs off to the Cayman Islands,” he said in court.
But Deputy District Attorney Matt Kerrigan said the crimes occurred over a period of time, suggesting Clouston didn’t just make a mistake.
“It wasn’t a situation where Mr. Clouston had a brief lapse of judgment,” he told Superior Court Judge Michael Duffy.
At one point, Kerrigan said, Clouston planned to include residential development on the land — without Nelson’s knowledge — working with investors who agreed to forgive Clouston’s debts if they were allowed to invest in the development. That plan, Kerrigan said, would have called for the demolition of Nelson’s home, which she has owned for more than 50 years.
Ultimately, the charitable cause, Nelson said in her statement, became Clouston.
“That was never my intent or understanding,” she wrote.
In order to develop the land, Clouston said, studies for environmental impact, flood control and traffic had to be commissioned. And fees had to be paid to have the property re-zoned from residential to commercial. Since that cost money he couldn’t afford — and since the trust didn’t have any actual cash — he said he took out the loans on the property to pay for the studies.
Once that was taken care of, he said, the development Nelson requested could begin.
“It was my job to make sure that project was profitable and would last generations,” he said.
Everything was reviewed by an attorney, he said, and the trust was revocable.
“She could have picked up the phone and said, ‘I don’t want to do this any more,’” he said.
The parties had previously settled over a related lawsuit.
Clouston said there were no plans to demolish Nelson’s home and that the trust called for her to remain on the land until she died.
“We weren’t hiding anything from anyone,” he said.
According to Duffy, Clouston will surrender himself to jail on Sept. 12. Prior to that, the Sheriff’s Office will determine if he is eligible for alternative sentencing, which could include time served outside of jail.
Nelson thinks he should have to think about his actions in jail.
“Otherwise, I believe he will learn nothing from this.”