The county's public administrator is suing a Grass Valley Realtor, accusing him of falsifying a dead accident victim's records to cover up more than a quarter of a million dollars in debt he allegedly owed her.

Realtor Arnold Rubenstein is accused of opening accident victim Michele Desiano's personal safe, removing original records that showed he owed her $255,000, and producing false papers showing he only owed her about $84,000, said David Alkire, attorney for the county's public administrator.

Rubenstein declined to answer questions Monday about the lawsuit - filed May 6 - and his relationship with Desiano.

"I didn't know a lawsuit had been filed," Rubenstein said. "This is the first I've heard about it."

Desiano and her husband, Art Baker, were killed July 23, 2005, when the Cadillac Escalade Baker was driving on Highway 49 drifted over the double yellow line and hit an oncoming Toyota Rav 4 head-on.

Though Baker has two children, Desiano had no heirs, Alkire said.

The county's public administrator - which is the Sheriff's Office in Nevada County - was appointed to be the administrator of Desiano's estate, according to the lawsuit.

On July 24, 2005 - the day after Desiano died - Rubenstein called the Sheriff's Office from the dead woman's house to say he found the garage door, which allows access to the house, open.

A deputy searched the home while Rubenstein waited outside and found the upstairs safe standing open, according to the lawsuit. The deputy took an inventory of the remaining contents of the safe and closed it. Desiano kept her promissory notes in the safe, the lawsuit states.

Rubenstein told the deputy he had not been in the house that day, according to the lawsuit.

While the Sheriff's Office was in the process of marshaling Desiano's assets, sheriff's staff learned of several loans Desiano made over the years to Rubenstein and located a copy of the interest-only promissory note for $255,000, with an annual interest rate of 8.6 percent, all due on July 21, 2006.

The original note was never located. Alkire declined to state Monday where the copy was found.

However, after Rubenstein was questioned about these loans, he produced a fraudulent promissory note for a self-amortizing loan for $84,000, Alkire alleged.

Rubenstein used "reverse arithmetic" to falsify records and show the monthly interest-only payments he had been making on the larger loan prior to Desiano's death exactly equaled the payments he claimed to be making on the fraudulent self-amortizing loan, Alkire said.

Alkire and the public administrator is suing Rubenstein for $255,000 plus interest and punitive damages.

Investigators have produced a paper trail, including Desiano's and Rubenstein's income tax returns, which show proof of the concealed interest-only loan, Alkire said.

A case management conference is scheduled for August 25 in Nevada County Superior Court.

To contact Staff Writer Robyn Moormeister, e-mail rmoormeister@theunion.com or call 477-4236.