Legal Ethics

Former Clark Thomas & Winters Partner Convicted in Bill-Padding Case, Gets 500 Days, Must Pay $222K


A former partner of Clark Thomas & Winters was convicted yesterday by a Texas jury in a case that revolved around the alleged padding of legal bills to obtain money to make secret payments to relatives of board members of a client utility company.

Convicted of theft, money laundering and misapplication of fiduciary property, Walter Demond got a harsher punishment in the case than the ex-general manager of Pedernales Electric Cooperative, who was sentenced to probation, the Austin American-Statesman reports.

Demond was sentenced to 500 days in jail, at a rate of 100 days a year for five years, and must pay $212,000 in restitution and a $10,000 fine.

Demond’s lawyer, Rip Collins, declined to comment. He plans to appeal.

The case is considered one reason why Clark Thomas, once the largest and oldest law firm in Austin, closed its doors in April.

“This verdict should send a chill through the spine of all corporate lawyers,” Larry Landaker, who now serves as president of the Pedernales board, told the newspaper yesterday. “General counsel has a higher duty to the law and the corporation’s shareholders. It is not an acceptable defense to say that ‘I was following orders of management or the board.’ “

Earlier coverage:

ABAJournal.com: “Law Firm to Pay $4.1M to Settle Suit Over Ex-Partner’s Alleged Activities”

ABAJournal.com: “Jury Mulls Money-Launder Case Against Ex-Clark Thomas & Winters Partner Charged re Billing Practices”

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