Lawyer Allegedly Stole Settlements

After a horrific diving accident paralyzed Raul Lopez from the neck down, he turned to lawyer James Herman Davis, who negotiated a $1.2-million settlement for him.

But over the years, as his body atrophied in a wheelchair, Lopez got only $25,000 of that money and died while living in an unheated garage, because, authorities allege, he couldn’t afford medical treatment or another place to live.

Randy Egger also turned to Davis, a fixture among Southern California personal injury lawyers for decades, for legal representation after a car accident left him a quadriplegic.

Of the $275,000 a jury awarded him, Egger said, he hasn’t seen a penny--nothing with which to pay for in-home care or a special oversize wheelchair to fit his 6-foot, 5-inch frame.

In all, authorities allege that Davis, 68, has stolen more than $3.7 million from legal settlements that he reached for at least 15 clients. Many of them were approached by nurses who referred them to Davis as they lay in their hospital beds, and now they are making do without desperately needed medical care or rehabilitation because they haven’t gotten their money, Deputy Dist. Atty. William Penzin said Monday.

“It’s disgusting,” Penzin said. “Here you have these accident victims, totally vulnerable and dependent on him, and he rips them off royally.”

Penzin said his office considered but ultimately rejected filing manslaughter charges against Davis in Lopez’s death.

“We didn’t think we could prove the link. But if he’d gotten the settlement check, he wouldn’t have died.”

Davis was arrested last Wednesday and arraigned late Friday afternoon. He pleaded not guilty to 15 counts of felony grand theft and was sent back to County Jail, where he is being held on $3.75 million bail pending a May 6 preliminary hearing.

A lawyer for Davis, Danny Davis (who is not related), did not return repeated calls seeking comment. Calls left at their Hollywood Hills home for James Herman Davis’ wife, Gilda, who manages his office, were not returned.

But in civil cases stemming from Davis’ representation of his clients, he has claimed that he never knowingly stole money from any clients, blaming it in some cases on confusion brought on by his advanced age.

In fact, Penzin and other authorities said Monday, they believe that Davis is “setting up” a defense in which he will argue that he suffers from dementia or senility and, therefore, should not be held criminally accountable for his actions.

“He claims he has dementia. I don’t believe it,” said Rod Chapman, a senior investigator for the district attorney’s major fraud division, who has been investigating Davis for more than two years.

In his heyday, Davis was a prominent attorney who operated a boutique law firm, most recently in a swank penthouse near downtown Los Angeles. Several lawyers worked for him.

Standing just over 5 feet tall with white hair and beard, Davis is not only “short and aggressive,” but he’s an avowed fan of another short man, Napoleon, and has large paintings and portraits of the French general at his home and former office, Chapman said.

Authorities allege that the crimes took place between 1995 and 1997. Davis resigned from the California Bar two years ago while disciplinary charges were pending against him. He recently has been staying at a Van Nuys assisted-living facility where, Chapman said, he comes and goes as he pleases.

Authorities said Davis secured large legal settlements for his clients but told them that the windfalls were far less, in some cases forging their signatures on checks he deposited in a trust account. Then, they allege, he wrote checks to himself totaling more than $8 million and wired some of it to offshore accounts.

In some cases, authorities allege, Davis told his clients to invest in long-term annuities that he controlled and paid them a monthly stipend for a year or two. When the stipends stopped and they called his office to complain, “they got the runaround,” Chapman said.

Now, authorities said, he has declared bankruptcy and there is no money left for his alleged victims.

“It’s very, very upsetting,” said Lopez’s widow, Christinna. “He took away a father. And a very important person in our lives.”

Mildred Ipsen, the 65-year-old mother of Randy Egger, said she is on disability because she threw her back out trying to move her son. She can’t afford a nurse to help care for him or buy him a special bed or wheelchair to make him more comfortable.

“Randy has a lot of things he needs that that money could buy,” she said. “He is now 45, and I always worry; when I’m gone, what is going to happen to my poor little Randy?”