Former Ukiah college scholarship trustee settles after being accused of misappropriating funds

James Harrison settled with the California Attorney General's Office after he was accused of misappropriating money from a college scholarship trust intended to benefit female graduates of Ukiah High School pursuing careers in medicine.

In the settlement, Harrison agreed to a lifetime ban from serving as a charitable trustee or officer of a public benefit corporation. The Federal Deposit Insurance Corporation (FDIC), the California Department of Financial Institutions, and the Attorney General's Office recovered both the principal and the interest owed to the trust, totaling over $650,000.

"Harrison looted college scholarship funds intended to help women graduating from high school achieve their dreams," Attorney General Jerry Brown said. "Today's agreement makes sure that he is never in a position to steal from a non-profit again."

The trust was established in 1993. Harrison, then vice president of Savings Bank in Mendocine County, became the trustee. He used the trust's money to invest in real-estate ventures and loaned money to family and friends.

In 2005, the FDIC was notified of suspicious activity involving the trust. The Attorney General's Office began its own investigation and found that Harrison had diverted hundreds of thousands of the approximately $474,000 in the original trust.

In February 2007, the Attorney General's Office filed a civil lawsuit against Harrison seeking to remove him from the trustee position. Criminal charges were filed against Harrison in 2008.

In February 2009, Harrison pleaded no contest to several charges, including misappropriating trust funds and filing false tax returns, and was sentenced to one year in county jail and three years probation.

The civil suit against Harrison led to a new trustee being appointed, and scholarships have been distributed for the last two years.

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