Wednesday, April 20, 2005
Nikolai Tehin, an attorney in San Francisco for over 30 years, was convicted last October of six counts of mail fraud and nine counts of money laundering for stealing settlement funds his law firm, Tehin + Partners, received on behalf of clients (indictment here). He has received a sentence of 170 months, a very substantial term of imprisonment in a white collar crime case. A press release (here) issued by the U.S. Attorney's Office for the Northern District of California described Tehin's conduct as akin to a ponzi scheme in which he used funds for his personal expenses and then took money from later settlements to repay clients whose case settled earlier. In one case in which Tehin represented low-income, mostly Latino plaintiffs complaining about their living conditions -- the Vintage Ranch case -- a $2 million settlement was siphoned away. According to the press release:
In early 2001, Mr. Tehin settled the Vintage Ranch lawsuit for $2 million. After attorney's fees and costs, the clients were entitled to approximately $1.3 million. However, within just two months of receiving the final settlement check in the case, Tehin had actually stolen and spent the entire $2 million on unauthorized personal and business expenses before any of the Vintage Ranch plaintiffs received any of their settlement funds.
For many months following the settlement, Mr. Tehin's Vintage Ranch clients complained repeatedly about how long it was taking for them to be paid. Ultimately, tensions increased to the point where nearly a dozen of the unpaid clients marched in front of Mr. Tehin's office building, in San Francisco's Financial District, holding signs with slogans such as: "Taking Money from the Poor, Shame on You Nick Tehin and Pam Stevens" and "Bank Records Don't Lie, You Took Our Client Trust Fund."
When the Vintage Ranch clients did ultimately receive their money, they were paid not with their own settlement funds, but with funds belonging to other clients of Tehin + Partners.
Other clients from whom Tehin stole settlement money included two medical malpractice victims and two claimants in a will contest. (ph)
UPDATE (4/20): There is a good article about the prosecution of Tehin on Law.Com (here), including a comment by his lawyer that this is the longest sentence one of his clients has received in a federal prosecution (I assume he does not do many large-scale drug cases). Among those who requested a long sentence is the director of Legal Aid of Marin, which retained Tehin to represent the clients in the Vintage Ranch case discussed above.