State Bar Charges Alamo Lawyer With Misappropriating $400K

SAN FRANCISCO, CA — An Alamo lawyer who faces criminal charges of embezzling PG&E settlement funds from Yolo County clients has now been hit with State Bar disciplinary charges related to the same alleged actions. The San Francisco-based bar filed the administrative misconduct charges on Dec. 4 against William J. Reed, 74, who maintains his law office in Alamo. He now has 20 days to respond.

Reed's clients were several ranching families whose property was damaged in a 16,000-acre wildfire in Yolo County in 2006, which was allegedly sparked by downed PG&E power lines. The State Bar charges claim that Reed misappropriated $400,000 in PG&E settlement funds from five clients: $200,000 from John and Elizabeth Stone and $200,000 from Kristen Turner and Herb and Marlene Schuler.

The clients have yet to be paid the money they are owed, according to the State Bar. If not settled, the bar charges would lead to an administrative trial that could result in acquittal, public or private reproval, probation, or suspension or cancellation of Reed's law license. Punishments of suspension or disbarment must be approved by the California Supreme Court.

In the related criminal case now pending in Contra Costa Superior Court, Reed is accused of four felony counts, including grand theft by embezzlement and grand theft of personal property. District attorney spokeswoman Bobbi Mauler said Reed was arraigned on the criminal charges in April and is scheduled to have a preliminary hearing in February.

In the State Bar case, Reed is accused of nine counts of professional misconduct, including the misappropriation of $400,000 in client funds. The other eight charges are related to Reed's handling of his
clients and of the bar investigation.

They include failing to notify the clients of his receipt of the funds in October 2013; withdrawing the funds from his client trust account; failing to keep the funds in the trust account; withdrawing from the clients'
employment in 2013 without informing them; failing to release the clients' property and papers in December 2013; and failing to render an accounting of the funds.

The final two misconduct charges are allegedly falsely telling a State Bar investigator in 2015 that the $200,000 for the Stones and Turner was "currently held in trust" for them, and failing to cooperate with the
investigation in a 2016 deposition. Reed said in an emailed statement today the State Bar charges
"come as a surprise and are unfounded."

"They don't match with nor are they supported by any of the documents, court filings, statements, including the approximately $950,000 contractual fee bill for six years of legal services these parties incurred
with me, and other evidence we have freely assisted the State Bar in gathering in their intermittent investigation over the last four years," Reed wrote.

By Bay City News

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