Tuesday, June 12, 2001
Ex-Lawyer James H. Davis Sentenced to 12 Years for Bilking Clients
From Staff and Wire Service Reports
Former Los Angeles attorney James Davis was sentenced to 12 years in prison yesterday for bilking clients out of about $2.5 million.
Los Angeles Superior Court Judge Robert Perry imposed the maximum sentence on the 71-year-old ex-lawyer, who was convicted April 5 on 13 counts of grand theft.
Most of the victims had limited ability to speak English. Davis persuaded them to enter into complex structured settlements of personal injury cases, then invested much of the money in oil for his own benefit.
Davis allegedly worked with the assistance of his wife, Gilda Mejia Davis, who translated for many of the Spanish-speaking clients. The wife was also charged, but she was acquitted on March 27 of charges stemming from her husband’s actions.
Perry allowed Davis to address the court for about an hour before imposing the sentence.
“I’ve learned a lot for being in jail,” said the gray-haired, bespectacled former lawyer who was wearing orange jail-issued clothes. “I spent as much time there as when I [was] at Stanford Law School.”
The judge said he considered the defendant’s age and the fact that he is a first-time offender, but decided to impose the maximum sentence.
“This case was an extreme tragedy for all,” Perry said. “The victims all suffered serious injuries. Many were not fluent in English.”
A restitution hearing was set for July 19.
But many victims, who are still awaiting compensation, were not satisfied with Davis’ sentence.
“I’m very mad,” said Hector Martinez, 59, of Los Angeles, who was paralyzed in a car accident. “It’s only a few years for him.”
His wife, Antonia, 53, said they were bilked out of $130,000.
“I wish he could have 12 years only for my husband,” a visibly upset Antonia Martinez said. “It’s not enough....I feel very angry.’”
Deputy District Attorney William Penzin said even though Davis got the maximum sentence, “without these people getting their money back, it’s not an appropriate sentence.”
Deputy Public Defender Randall Rich said Davis never intended to steal.
“We believe no crime was committed,” Rich said. “It’s a death sentence for Mr. Davis.”
The District Attorney’s Office opened an investigation into Davis’ law practice in 1997 after more than three dozen of his clients complained to the State Bar. Davis resigned from the State Bar that year. He later declared bankruptcy.
District attorney investigator Rod Chapman said Davis persuaded his clients to put money into a “special needs trust,” from which some of it was diverted for oil and gas and other types of investments.
The scheme started in 1987 went until 1996, when the payments stopped because the investments went bad, Chapman said.
The “smoking gun” in the case was a message to Davis from his associate Boyd Croxan, who died of a heart attack before the case went to trial, Penzin said. In the letter, Croxan complained that he was feeling the heat from investigators and would no longer divert money for Davis.
“In the letter [Croxan] admitted the whole thing was a scam and he was telling Davis ‘you better protect me, or I’ll talk,’” to investigators, Penzin said in April.
The District Attorney’s Office filed 15 counts of grand theft in 1999. Prosecutors alleged that a nurse—a relative of Gilda Davis—would refer clients to the lawyer as they lay in their hospital beds recovering from car accidents and other injuries.
Ex-clients testified that Davis entered into settlements with the defendants but never revealed to the clients the total settlement amounts.
Other clients said Davis purported to “loan” them money while they were waiting for settlement checks to come in. They were later sued for repayment by lending companies they had never heard of.
Davis had argued that he was helping his clients structure their money in a way that would be most useful to them.
During his hour-long speech in court yesterday, Davis said oil was perceived to be the safest investment at a time when banks and the stock market were doing badly.
His lawyer said the companies with which Davis had contracts were to blame for bad investments.
Copyright 2001, Metropolitan News Company