Granny Edna Sue Pate Accused of Stealing Grandson's College Fund

June 7, 2012 -- Usually, it's granny who puts a few dollars in a child's college fund. In this case, however, granny took them out: Edna Sue Pate, 73, stands accused of having looted $100,000 from her grandson's college trust fund, then gambling it away. Police in Indiana and Louisiana think she now may be on the run.

Pate was sole trustee of her grandson's trust account.

Court documents and the boy's father, private investigator Thomas Smith of Griffith, Ind., tell an appalling story. A police detective working on the case calls it a first in his experience.

Smith tells ABC News that in 2003 a college trust fund with a $100,000 balance was set up for his son Christian, then age 10. The money came from a wealthy local surgeon for whom Smith's mother-in-law, Edna Sue Pate, had worked as a nurse.

When the surgeon died, his estate established trusts for each of Smith's two children. Pate, Christian's maternal grandmother, was named sole trustee.

"She was appointed with my blessing," says Smith. "I had no problem with that."

In 2011, as Christian's graduation from high school drew near, Smith says he tried repeatedly to contact Pate about the account. She didn't respond.

Knowing her to be a gambler, Smith says he started to get worried. He eventually brought a civil action against her, demanding she give an accounting of the trust. When that, too, went unanswered, local law enforcement issued a warrant for Pate's arrest.

She has not yet been apprehended, in part because no one seems to know where she is.

Smith thinks she may be hiding out in or near Minden, La. "That's where she's from. She had friends and family there, a mobile home." A spokesman for the Minden police department speculates Pate may now be on the run.

James Sibley, a Griffith, Ind., police detective working on the case, last month filed an affidavit with the criminal division of Lake County superior court summarizing what he'd found in his investigation:

Between 2004 and 2007, Pate wrote 111 checks on the trust totaling $97,007.75. "The vast majority were made payable to cash," says the affidavit. Pate next set up a separate account, from which, between 2009 and April 2010, she made 49 withdrawals totaling a little over $6,480. Thirty of these "were made at the ATM at either the Majestic Star II Casino in Gary or the Ameristar Casino in East Chicago." Majestic Star records, says the document, "reveal that during the same time period she [Pate] had a total of $93,662 in losses."

The Criminal Division of Lake County Superior Court charged Pate on May 11 with four counts of theft.

Efforts by ABC News to contact Pate or her relatives were unsuccessful.

Smith wants to see Pate brought to justice without delay. Though Griffith police--especially detective Sibley--have been responsive, others in Indiana law enforcement have not, he contends. He says, for example, that when he first apprised Hammond police of his fears the trust was being looted, $40,000 still remained. But by the time they acted, the money was gone.

Of the Lake County Prosecutor's Office, Smith demands in exasperation, "Are they going to extradite this woman?" Indiana normally extradites only criminals from neighboring states. For it to extradite Pate from Louisiana (if that's where she is) would require special cost and effort. "They just don't want to spend the money," says Smith with disgust.

"I want to force the State of Indiana to get her. I'm prepared to do anything I have to. I'll camp on the governor's lawn. I'll ask him to give me an audience at the attorney general's office."

He wants to see Pate sent to jail. "Stealing your grandson's money? That's about as bad as you can get, short of physical assault." His son, he says, feels the same way: "He would like to see his grandmother in prison."

Had the account not been looted, he says, it today, with interest, would hold about $160,000. Under the terms of the trust, that whole amount would have gone to Christian when he turned 26, in the event he didn't use the funds for college.

Christian, says his father, was an indifferent student growing up and showed little interest in college. Ironically, he's now interested. "Only in the past six or eight months has he told me that he wants to go," says Smith. "I hope he does; but frankly, it's not in the cards. He'd be saddled with huge expenses."

The responsibility for that rests solely with Christian's grandmother, he says. "She made a decision with malice to deprive someone of their good fortune."

Estate experts recommend that trusts -- especially smaller ones that aren't managed by a trust company -- be set up to require two signitures to move any funds.