By Ted Asregadoo, PIO, Contra Costa District Attorney’s Office
Reed, an 80-year-old attorney formerly of Alamo, was convicted of felony grand theft by embezzlement and a white-collar crime enhancement related to a settlement agreement with PG&E. The agreement included payments to victims of the 2006 Zamora Fire near Woodland, CA.
Following the fire, Reed authored a letter, purportedly from a fellow landowner impacted by the fire, stating that in a lawsuit against PG&E, attorney’s fees would be covered by PG&E. He invited fire victims to a Town Hall meeting in Zamora, where he assured them that, according to the law, PG&E would be responsible for attorney’s fees, not the clients.
Two families, including elderly victims with ranch properties damaged by the fire, agreed to have Reed represent them. Reed presented unclear and confusing lawyer-client relationship documents, including a contract implying clients would pay his hourly legal fees and costs at the rate of $625 an hour, and a cover letter stating PG&E would cover Reed’s attorney’s fees and costs. After obtaining the victims’ agreement on legal representation, Reed filed a lawsuit against PG&E on the victims’ behalf in 2008.
In 2013, a $200,000 settlement for each victim family was brokered by Reed with PG&E. Reed received the $400,000 settlement from an attorney representing PG&E — but Reed failed to inform his clients about the money. His clients discovered the settlement money was paid to Reed at an unrelated court hearing.
Afterward, when the victims asked Reed about their money, he presented them with a proposed settlement agreement. The agreement stated the clients would each give him $103,000 for attorney’s fees and costs, and in turn each client would receive $97,000. The victims refused to sign Reed’s proposed settlement agreement because it contradicted their initial agreement with him. Years of civil litigation ensued between Reed and the victims, with Reed using some of the settlement money to pay his lawyers to fight the victims.
In 2017, the Contra Costa County District Attorney’s Office was alerted to possible criminal violations related to the victim’s settlement money. A Forensic Accountant at the District Attorney’s Office analyzed Reed’s bank account statements and determined that Reed had spent the entire $400,000 on himself. Thereafter, felony grand theft by embezzlement charges were filed against Reed.
The case went to trial on October 13, 2023. Deputy District Attorney Scott Prosser had to prove beyond a reasonable doubt to a jury that Reed was not entitled to the victim’s settlement money for attorney’s fees A key piece of evidence presented to the jury during the trial was the document stating that Reed’s fees would be paid by PG&E and not the victims.
The jury deliberated for a few hours and convicted Reed on two felony counts of grand theft by embezzlement and a white collar crime enhancement, establishing illegal possession of over $100,000. Reed faces imprisonment for three years and eight months and will be sentenced on January 10, 2024, by
Superior Court Judge Charles Treat.
Deputy District Attorney Prosser, after the verdict, stated, “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. And we are very pleased with the outcome in our fight to seek justice for the
victims in this case.”.