Ex-Alamo attorney convicted of embezzling $400,000 from clients

William James Reed pocketed settlement PG&E paid in wake of 2006 Yolo County wildfire.

MARTINEZ — An attorney and former Alamo resident was convicted this week of bilking his clients out of a $400,000 settlement Pacific Gas & Electric Co. agreed to pay following a 2006 wildfire near Woodland in Yolo County, according to prosecutors.

On Tuesday, a Martinez jury found William James Reed, 80, guilty of grand theft by embezzlement and a white collar crime enhancement related to the settlement agreement, the Contra Costa County District Attorney’s Office said in a statement Thursday.

Two families, including elderly victims with ranch properties damaged by the wildfire, agreed to let Reed represent them in a lawsuit against PG&E after he assured them the utility would be responsible for his attorney’s fees, according to prosecutors.

In 2013, Reed secured a $400,000 settlement — $200,000 for each family — but he did not inform his clients, the district attorney’s office said, adding that the money was paid to Reed at an unrelated court hearing.

When the families asked Reed about their money, he proposed they each give him $103,000 for attorney’s fees and costs, and in turn each family would receive $97,000, according to prosecutors. The families rejected Reed’s offer because it contradicted their initial arrangement with him.

The district attorney’s office said years of litigation ensued between Reed and the families, with Reed using some of the settlement money to pay his lawyers to fight the victims.

In 2017, the district attorney’s office was alerted to possible criminal violations related to the money. A forensic accountant analyzed Reed’s financial statements and determined he had spent the entire $400,000 on himself, according to prosecutors. Felony grand theft by embezzlement charges were then filed against the attorney.

The case went to trial on Oct. 13. Deputy District Attorney Scott Prosser had to prove beyond a reasonable doubt to a jury that Reed was not entitled to the money for attorney’s fees. A key piece of evidence was a document stating that Reed’s fees would be paid by PG&E and not the families, the district attorney’s office said.

The jury deliberated for a few hours and convicted Reed on two felony counts of grand theft by embezzlement and the white collar crime enhancement, according to prosecutors. He faces up to three years and eight months in prison when he is sentenced in January.

“It is unconscionable for an attorney to lead a client to believe they were not responsible for attorney’s fees, and then take 100% of the client’s money from a settlement agreement,” Prosser said.

“And we are very pleased with the outcome in our fight to seek justice for the victims in this case.”