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As the Mt. Diablo Center for the Arts sits unfinished in Danville, William McCann, the local lawyer who helped build it, is mired in a legal mess of theatrical proportions. McCann, who avoided jail after paying a $500,000 cash bond, is accused of felony tax fraud, embezzlement and grand theft connected to the theater project. His preliminary hearing, which was scheduled to begin this week, will probably begin in November, said William Du Bois, McCann’s criminal defense attorney. Meanwhile, Miller, Starr & Regalia — the Walnut Creek real estate law firm that was representing McCann and his business partner, J. Gordon Bingham, in a related civil suit — pulled out last month. McCann says he will represent himself in the fraud and unfair competition suit filed by San Francisco lawyer Donald Putterman on behalf of landowner Sidney Corrie. The civil trial is scheduled to begin Feb. 3. “I won’t bow down to them. I won’t,” McCann said last week. Miller, Starr’s exit from the case is the latest twist in a scandal that has spawned a flurry of lawsuits and has ensnared many of the movers and shakers who helped build the Mt. Diablo Center for the Arts. McCann and Bingham planned to build a complex that would include a 300-seat auditorium — the future home of a local children’s performance group. In the criminal case, McCann — the former chair of the Belasco Theatre Company’s board — and Bingham are accused of cheating the performance group out of property worth about $2 million. Last year, authorities raided the homes and offices of McCann and Bingham. In February both were charged with felony tax fraud, embezzlement and grand theft. The attorney general’s office has alleged the two cheated the theater company by getting it to sign over rights to the property. The AG is also pursuing civil damages against the developers for allegedly breaching their fiduciary duty to the theater company. The AG deputized Alameda County prosecutor William Denny to try the criminal case since the theater project’s honorary board was loaded with political heavyweights such as county supervisors, Danville city leaders and Contra Costa District Attorney Gary Yancey. William Tauscher, ex-husband of U.S. Rep. Ellen Tauscher, co-owned the property with Bingham and McCann and was on the honorary board. Tauscher was named in the original suit, but is in the process of settling, Putterman said. In his civil suit, Corrie, who owned the property before the complex was built, alleged that he was duped into donating about half of the land to the theater company in exchange for $1.4 million in cash and a tax deduction of about $2 million. Later, the theater company signed over land rights to Bingham and McCann. It amounted to a $1.4 million land sale for a property appraised at $3.36 million, said Putterman, adding that Corrie seeks “millions” in damages. According to McCann and his lawyers, Corrie filed suit because he feared he was missing out on potential financial benefits from the theater project and a related office building project. Corrie was further angered that he wouldn’t be able to get the land donation tax deduction, McCann says, though Putterman said his client eventually got the deduction. McCann and his lawyers have always insisted that while a few technical rules were broken to get the project built, there was no intent to cheat anyone. McCann said he asked the theater company to sign over the land to him and Bingham to get bank loans to pay Corrie because McCann and his partners had credit and the theater company didn’t. After Corrie was paid and construction began, the land and buildings were given to the nonprofit theater company, which was always part of the agreement, McCann said. Putterman, however, claims McCann and Bingham would have reaped millions if Corrie hadn’t sued and the AG hadn’t intervened. The theater-related suits don’t stop there. McCann has counter-sued Corrie. And banks have demanded that Bingham and McCann immediately repay the theater building loans that the developers guaranteed with their own assets. Added to that is Bingham’s ongoing battle with a life-threatening form of leukemia. Since Bingham’s health has deteriorated, the developer is trying to end all his legal problems, said his lawyer, Daniel Horowitz. Bingham pleaded guilty to a reduced charge of misdemeanor tax fraud and has paid about $40,000 in fines. He is also working to quickly resolve the civil suits, according to Horowitz. As Bingham fades from the legal picture, all eyes are on McCann, whose preliminary hearing in the criminal case is approaching. If McCann is convicted of a felony, the attorney could lose his bar card. William Du Bois, McCann’s criminal attorney, said Yancey and Tauscher could be called as witnesses if the case goes to trial. “We will prove that Bill McCann didn’t defraud anyone,” said Du Bois. “All of the parties to this lawsuit have been subjectively enriched with the exception of Bill McCann and Gordon Bingham,” he said, adding that the pair will have spent between $2 million and $3 million on the theater project once the dust settles in civil court. McCann, however, won’t be writing any more checks to Miller, Starr & Regalia. Conflicts of interest prevent the firm from continuing to represent both Bingham and McCann in the civil litigation. McCann, general counsel for scooter-maker Patmont Motor Werks in Livermore, wanted the firm to continue with the case. “I paid them $600,000,” he said. Miller, Starr’s conflicts in the case existed before the litigation began, but the firm got waivers from Bingham and McCann that allowed them to represent the pair. However, Bingham doesn’t want to share lawyers with McCann, said Bingham’s lawyer, Horowitz, largely because of McCann’s continual “bad PR” in the case. That public image probably wasn’t helped much when McCann violated court orders to stay in the country and traveled to Ireland. The 55-year-old, who is also an Irish citizen, surrendered his U.S. passport but later got an Irish one and used it to attend a family member’s funeral overseas. The trip incurred the wrath of Contra Costa Superior Court Judge Joyce Cram because he obtained the passport well before the death of his relative. That’s why McCann , who initially was considered less of a flight risk, was ordered to post a $500,000 cash bond if he wanted to stay out of jail until his trial began. Instead of jeopardizing Bingham’s interests by representing just McCann, Miller, Starr dropped out of the case altogether, said Marvin Starr, the name partner who was co-counsel on the case. “The objective that Bingham and McCann wanted to achieve was of the highest intent,” said Starr, who tried the case with colleague Lynne Yerkes. Starr said the theater case might be the last that he personally litigates. Now Starr spends much of his time as an expert witness. “It was a lot of time and effort,” Starr said. “It was time to move on.”

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