Santa Ana Attorney Accused of Embezzling $2 Million : Crime: Authorities say former clients were victimized by Michael T. Kenney. He is also charged with evading state taxes.

County prosecutors said Friday they have arrested a prominent Santa Ana attorney on charges that he embezzled nearly $2 million from former clients.

Michael T. Kenney, who represented defendants in the Mustang Bar attempted-murder trial in 1989 and other well-known Orange County cases, was charged with 12 counts of grand theft after he was arrested Wednesday in a Sylmar motel, said Deputy Dist. Atty. Guy Ormes.

Kenney, 47, is also accused of failing to file more than $500,000 in state tax returns between 1985 and 1989, Ormes said.

He was being held on a $1-million warrant in Los Angeles County Jail on Friday, awaiting transfer to Orange County. No arraignment date had been scheduled.

Kenney, a former U.S. attorney and FBI agent, could not be reached for comment Friday.

Last March, Kenney was temporarily suspended from practicing law by the California State Bar in connection with some of the same allegations found in the criminal charges. The suspension was made indefinite in April pending an investigation of the charges and a hearing on possible disbarment, said spokeswoman Susan Scott.

Orange County prosecutors allege that Kenney victimized 14 clients by embezzling money--at least $1.9 million--that they had given him to settle civil lawsuits or to pay fines.

According to court documents, Kenney first came under suspicion after the County Probation Department did not receive more than $300,000 from two of Kenney’s clients who were ordered to pay restitution in a fraud case.

The defendants were able to prove that the money had been deposited into Kenney’s bank account. Investigators then found a long trail of similar transactions dating from about 1985, Ormes said.

Prosecutors say several of Kenney’s alleged victims have been forced into bankruptcy or suffered other serious financial hardships.

At least 13 civil lawsuits have been filed against Kenney, Ormes said. The criminal complaint also alleges that a number of victims “did not become aware of the theft until several years after it occurred.”

“I suspect there may be others out there who lost money but don’t realize it yet,” Ormes said. “Many other cases may begin to surface now.”

According to court documents, after Kenney became aware of the investigation, he offered to meet with prosecutors several times to “explain his side of the case” and make restitution, but he canceled all of the meetings that were scheduled.

Investigators issued an arrest warrant after Kenney’s ex-wife told them she had not seen him in several weeks and did not know where he was living.

According to documents filed during the Kenneys’ divorce proceedings, Lark Kenney said her husband was “never in the office” and that clients had begun calling their home “requesting refunds and threatening to take him to the (state) bar.”