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Nikolai Tehin Jr., a plaintiffs lawyer whose practice was taken over last year by the State Bar, was arrested Tuesday outside his Pacific Heights home. FBI agents took Tehin into custody following allegations that he stole or misused more than $2 million in client funds. Federal prosecutors say he was using settlement money belonging to downtrodden and disadvantaged clients in a Ponzi-like scheme to fund his lavish spending. Federal prosecutors are charging him with mail fraud and wire fraud. “This guy was Robin Hood in reverse,” said Roy Chernus, executive director of Legal Aid of the North Bay, which had brought Tehin in to litigate a housing case on behalf of low-income tenants at Vintage Ranch Properties in Napa. According to an affidavit from FBI Special Agent Brian Weber, Tehin spent a large portion of the $2 million settlement on the mortgage for his six-bedroom, seven-bath mansion and a 73-foot yacht. After repeated attempts to collect, several of the tenants staged a picket outside Tehin’s Financial District office last year. One sign read “Bank Records Don’t Lie, You Took our Client Trust Fund.” To cover the overdue disbursements, Tehin allegedly used settlement proceeds obtained in medical malpractice cases involving a newborn that suffered neurological damage during birth, and a pair of children born with cystic fibrosis who were conceived with the help of a fertility clinic. “Lawyers owe a duty of loyalty to their clients. Nikolai Tehin is accused not just of breaching that duty in the most egregious way but of violating federal law to enrich himself at the expense of the people who trusted him,” U.S. Attorney Kevin Ryan said in a statement. Unites States v. Tehin, 03-30282, brings to three the number of lawyers currently facing charges in the Northern District. The other two are former general counsel accused in connection with financial accounting scandals. Assistant U.S. Attorney Miles Ehrlich is prosecuting the case. Tehin is represented by Harold Rosenthal of Rosenthal & Gibbons. “Nick didn’t sign the checks and he didn’t do the bookkeeping, and at no point did he think he was stealing from clients,” Rosenthal said. The parents of the brain-damaged newborn have filed a claim with the State Bar’s Client Security Fund. Erik Atkisson, with Walkup, Melodia, Kelly, Wecht & Schoenberger, represents the parents and said his clients have never received any of a partial settlement paid to Tehin. According to the State Bar Court, in addition to mishandling the client trust account, Tehin also billed a client for experts that were never interviewed, as well as a $2,000 weekend stay at the Four Seasons Hotel in Newport Beach, which included a $500 room service and mini-bar tab. No longer in existence, the firm Tehin + Partners once touted that its legal philosophy was to “seek long-term relationships with our clients; relationships based in absolute trust on both sides.” Reilly Atkinson, a former partner at the firm, declined to speak at length about the arrest. “I think, given the fact that if that’s the situation — and it’s very unfortunate that it’s come to this — then it would be inappropriate for me to comment,” said Atkinson, who praised Tehin’s legal abilities. “I hope that it ends up well. He’s got a wife and some very young kids.” The State Bar has also suspended Tehin’s wife, Pamela Stevens, who had practiced with him. She hasn’t been arrested. Her attorney, Doron Weinberg of Weinberg & Wilder, said the decision to arrest Tehin without an indictment could mean prosecutors were worried he was about to flee or was concealing money. “That’s very unusual,” Weinberg said. “[The case has] been in the U.S. attorney’s office for six or eight months.” The U.S. attorney’s office declined to comment on the timing of the arrest. U.S. Magistrate Maria Elena-James released Tehin Tuesday on a $3 million signature bond. He will appear Monday before U.S. Magistrate Joseph Spero for a detention hearing. A preliminary hearing has been set for Aug. 4. The FBI affidavit indicates that district attorney’s offices in three counties — Napa, Alameda and San Francisco — were investigating Tehin before the case was turned over to the FBI. An FBI spokeswoman said that given the facts of the case, the degree of punishment federal courts can bring to bear was a factor in deciding whether to make it a federal case. “It wasn’t just a matter of whether we could, it was a matter of whether we should,” Special Agent LaRae Quy said.

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