Accused of misappropriating $3.5 million, lawyer resigns

A San Francisco lawyer accused by the State Bar of misappropriating more than $3.5 million from clients, including money owed to poor tenants in rundown housing and to three babies with birth defects, has resigned. NIKOLAI TEHIN [#54678], 57, also is under federal indictment for money laundering and mail fraud, has been sued repeatedly in superior court by clients, his former partner and a variety of businesses, and was evicted from both his offices and his home.

Tehin submitted his resignation Jan. 28 and it was accepted by the Supreme Court Feb. 10.

PAMELA STEVENS [#84964], Tehin's wife and law partner in Tehin + Partners, also has been charged with identical misconduct and the bar is seeking her disbarment; her trial is scheduled to begin in early June. The couple lost their licenses in August 2002 when the bar court found they posed a danger to the public.

"The misconduct of the two is almost unparalleled in State Bar history," says Alan Konig, the bar attorney who is prosecuting Tehin and Stevens. "The majority of their victims had significant quality of life issues or other trauma in their lives and sought the assistance of these attorneys to help make their lives better. Instead, Tehin and Stevens knowingly took advantage of these vulnerable clients at their weakest moments. Rather than assist them, they further injured them."

In addition to the misappropriation, Konig said, Tehin and Stevens committed extensive additional misconduct, including violating court orders, lying to clients and making false declarations to the court. Tehin's attempt to declare bankruptcy was dismissed by the court; he listed many former clients to whom he owes hundreds of thousands of dollars as debts that should be discharged.

The bar charged that Tehin, who specialized in litigation involving medical and legal malpractice, personal injury and commercial disputes, owes a dozen clients or other parties money and that he paid settlement funds to more clients with money that did not belong to them.

According to the federal indictment and the bar charges, the misconduct appears to have started in 2001 when Tehin settled a class action lawsuit for $2 million on behalf of more than 100 low-income tenants of some Napa apartments.

The tenants were owed about $1.3 million, but the bar and the federal indictment accuse Tehin of using the money to pay for personal and business expenses, including making repairs on his yacht and mortgage payments on his home in an exclusive San Francisco neighborhood.

All the money was gone five months after Tehin received it.

In another case, Tehin and Stevens received a $1 million settlement for his clients' two infant sons born with birth defects. The bar alleges that the lawyers never notified the clients they had received the money and signed a request to have the malpractice matter dismissed. The clients never received any funds, and Tehin used the money for personal and business expenses including his mortgage, the loan for his car and payments to the tenants in the Napa case.

Parents of another child born with birth defects have not received any of the $250,000 settlement Tehin negotiated for them, according to bar charges. The lawyers never informed the parents they received the settlement funds; the clients only learned about the misappropriation more than six months later when contacted by the bar. The funds were intended to pay for a handicapped van for the child.

In a contested will matter, two half-sisters should have received $193,750 each. The federal indictment charges Tehin with using all the money within two months for business and personal expenses, including paying other clients money they were owed.

The government is asking Tehin to forfeit $739,012.

The bar also charged Tehin and Stevens with misappropriating nearly $200,000 from proceeds from another client's wrongful death action, $125,000 that was to be placed in trust for another client's son, and another settlement check for another client for $325,000.

In addition, the bar charged Tehin and Stevens with fraudulent accounting in a half-dozen matters. Included in the charges was submitting fraudulent accountings to numerous clients who were billed for personal costs associated with vacations and for alleged exeprt fees for experts who say they never heard of Tehin and Stevens or the clients or never worked on the clients' matters. In one case, for example, the lawyers charged as an alleged expense a three-day weekend at the Four Seasons in Newport Beach that cost about $2,000. Total fraudulent charges to that client were more than $43,000, Konig said.

A Chicago law firm owed nearly $65,000 in a case in which it served as co-counsel with Tehin and Stevens was never paid, and Tehin's former law partner won a $1.6 million judgment against him, also unpaid.

The San Francisco Superior Court assumed jurisdiction over Tehin + Partners in 2002, and he is a named defendant in 33 lawsuits filed there. Two are breach of contract suits for $430,450 and $325,000 respectively, one is a fraud judgment of $288,132 and the remainder involve smaller amounts.

Tehin's criminal trial in federal court is set for May 3.