Lawyer convicted of embezzling $400K from wildfire victims

An attorney was convicted of embezzling $400,000 from his clients by a Contra Costa County jury this week. The crime resulted from a 2013 settlement he negotiated with attorneys from Pacific Gas & Electric Co. in the fallout of the 2006 Zamora Fire.

According to a news release Thursday from the district attorney’s office, attorney William James Reed was found guilty of grand theft by embezzlement with a white collar crime enhancement, establishing illegal possession of over $100,000. He faces three years and eight months in prison and will be sentenced on Jan. 10 by Superior Court Judge Charles Treat.

Reed was accused of misleading two families that were victims of the fire by representing that they would not be responsible for paying his fee in lawsuits against PG&E. He failed to disclose $400,000 in total settlement he received from PG&E on their behalf.

In a statement reacting to the verdict, District Attorney Scott Prosser said, “It is unconscionable for an attorney to lead a client to believe they were not responsible for attorney’s fees, and then take 100 percent of the client’s money from a settlement agreement. And we are very pleased with the outcome in our fight to seek justice for the victims in this case.”

The news release went on to detail the years of litigation leading up to the filing of criminal charges in 2017, revealing that a forensic accountant for the district attorney’s office found that Reed had spent the entire settlement fund on himself.

The State Bar announced disciplinary charges it filed against Reed in December 2017 and issued a warning to fire victims seeking legal counsel.