Lawyer charged with embezzlement stipulates to disbarment

A Newport Beach lawyer arrested last month on charges of embezzling $117,000 from a widow he represented in a trust matter has agreed to be disbarred. State Bar prosecutors submitted a stipulated disbarment for REDMOND PETER McANENY (State Bar #73808) Dec. 20 with State Bar Court.

McAneny admitted to the bar that he misappropriated $117,924.32 he was holding for Deborah Slaybaugh, whom he represented from June 2007 to July 2008 in a case regarding her late husband’s life insurance policy. He deposited a settlement check for that amount in his client trust account and agreed to pay Slaybaugh her share after paying attorney fees to the opposing party for drafting the settlement agreement. But, according to McAneny’s stipulation, for the last six months of 2008, he drained the account, making numerous withdrawals unrelated to the trust matter. He never disbursed any funds to his client or any other person entitled to part of the settlement.

In fact, he made a series of misrepresentations to his Slaybaugh “in an effort to conceal his misappropriation,” he admitted.

McAneny, 65, stipulated that he committed three acts of professional misconduct: misappropriation, failure to maintain client funds in trust and failure to promptly pay a client funds to which she was entitled. The misappropriation was an act of moral turpitude.

“I am proud of the stipulated disbarment our office, through deputy trial counsel Erin Joyce, negotiated with Redmond McAneny,” said chief trial counsel James Towery. “Attorneys who misappropriate funds from their clients deserve swift and firm discipline. This is the classic example of an attorney abusing the trust of a client.”

The State Bar also will act quickly to ask the superior court to take over McAneny’s practice and to freeze his accounts to protect his clients.

McAneny, who practices in Newport Beach and lives in Huntington Beach, was arrested Dec. 13 by investigators for the Orange County District Attorney and charged with one felony count of grand theft by embezzlement. The charge carries a sentencing enhancement for property damage exceeding $65,000. He was being held on $250,000 bail and faces up to four years in state prison if convicted.

Prosecutors said Slaybaugh and her husband had been going trough a divorce and he had changed the terms of his trust before his death, leaving it unclear if his life insurance benefits would go to his wife or his son. A settlement was reached to divide the insurance policy in half and a check for $117,924.32 was issued to a trust fund account for Slaybaugh.

After depositing the check in his trust account, prosecutors said, McAneny depleted the account by writing himself numerous checks unrelated to the trust matter.

McAneny was disciplined by the State Bar in 1993, drawing a stayed 90-day suspension and a year of probation for failing to preserve client funds in a trust account.

As part of his agreement with the bar, McAneny was ordered to make restitution to Slaybaugh. In mitigation, he cooperated with the bar’s investigation and he was in financial trouble as a result of both the bad economy and his financial obligations to his family.