Two attorneys who ran what was once the largest law firm on the North Coast face disbarment over allegations they took more than $250,000 from clients before the firm closed in 2012.
Attorneys Scott L. Steever and Robert L. Anderson, who were majority shareholders of the renamed Lanahan - Reilley, are accused of gross negligence and dishonesty for allegedly removing the money from two trust accounts and using it for their own purposes.
The attorneys both deny any misconduct, and each blamed the other.
Both could lose their licenses if the allegations of moral turpitude and dishonesty are proven in trials before an administrative law judge of the State Bar of California.
Steever faces additional separate allegations of misconduct.
"We consider misappropriation very serious," said Erica Dennings, a bar deputy trial attorney who is handling the case.
Steever and Anderson were major shareholders at Lanahan, Steever - Anderson, the successor to a firm that once boasted 65 attorneys with regional offices in San Francisco, San Jose and Sacramento.
It once counted among its attorneys state Sen. Noreen Evans, Sonoma County Superior Court Judge Gary Nadler and former Congressman Doug Bosco. Bosco is general counsel for Sonoma Media Investments, which owns The Press Democrat.
But the firm fell on hard times with the economic downturn of 2008 and closed four years later. It has since been hit with lawsuits claiming it owes millions of dollars to its creditors.
Late last year, state bar officials began investigating allegations that Steever and Anderson misappropriated money from two clients in 2009 and 2011.
In one case, Steever and Anderson received a check for $318,000 on behalf of client Bonnie Margolin from Protective Life Insurance Company and deposited it in a trust account, according to legal papers filed by the bar.
Margolin was entitled to at least $209,000 but she never got it, the papers said.
The later case involved $55,000 received on behalf of client Joanna Ramirez to pay a civil settlement. Steever and Anderson instead used the money for their own purposes, in willful violation of bar rules, the legal papers allege.
Steever, 56, said he wasn't involved in the firm after he left for health reasons in October 2011. Anderson was managing partner when "difficulties came up," he said.
"Bob was in charge when this all came to light and I was out completely incapacitated physically and mentally," Steever said.
But Anderson, 73, said Steever took the money for firm operations long before he left. Anderson said he was being blamed because he was still at the firm when it closed.
"It's a real tragedy for me to end up holding the bag," Anderson said.