James M. “Tres” Bernhard III, of Baton Rouge, was sentenced to 27 months in federal prison Thursday for wire fraud in the theft of $453,123 from his former law firm’s trust account.
Bernhard, who pleaded guilty to the wire fraud charge, surrendered his law license more than a year before he appeared for sentencing before Chief U.S. District Judge Brian A. Jackson in federal court.
Jackson also fined Bernhard $10,000. The judge added, however, no restitution is necessary because the law firm has been repaid all of its losses.
The career of Bernhard, son of former Shaw Group Inc. Chairman Jim Bernhard, nosedived in March 2012. That’s when Crawford Lewis PLLC fired him for allegedly misappropriating more than $1 million in state film tax credits that belonged to clients of the law firm.
“It is a substantial amount of money, and it is in seven figures,” attorney Mary Olive Pierson, who sued Tres Bernhard on behalf of Crawford Lewis, said at the time. The suit also alleged Bernhard had “sold invalid tax credits to third parties.”
In November, following investigation by the FBI, First Assistant U.S. Attorney Walt Green signed a wire fraud charge against Bernhard. Green alleged Bernhard had diverted $453,123 from the law firm to his personal use.
In January, Bernhard, 37, admitted the allegation was true and pleaded guilty to a charge that he wired $93,750 of the law firm’s money to an account he controlled in Oklahoma.
Crawford Lewis’ suit against Bernhard was settled out of court in July. At the time, Pierson told state District Judge R. Michael Caldwell: “The parties have reached a full and complete settlement and compromise related to all of the claims.”
Dallas attorney Michael A. Villa Jr., representing Bernhard, repeatedly asked Thursday that Jackson sentence his client to community service, home confinement or probation.
Villa said Bernhard has been diagnosed with bipolar disorder and personality disorder, for which he has undergone mental-health treatments for more than a year.
Villa said Bernhard’s mental-health issues surfaced in 1988, when the former lawyer was a child.
“These are not conditions of convenience,” Villa told Jackson. “These conditions existed before this case.”
Villa insisted Bernhard “has already been punished. He can never practice law again.”
Assistant U.S. Attorney Alan A. Stevens, however, argued that Bernhard’s sentencing should not send a message that a person can steal money, pay it back and remain out of prison.
“This was a nearly half-million-dollar fraud,” Stevens emphasized.
Bernhard apologized for a fraud he said he greatly regretted.
“I’ve done everything I know to make it right,” Bernhard told the judge. “I will do my best.”
“You have a long history of mental illness,” the judge replied.
Jackson told Bernhard, though, “You stole almost half a million dollars from your law firm … the people who trusted you the most.”
The judge added: “I simply cannot minimize that.”
Jackson ordered Bernhard to report to federal prison by 2 p.m. July 8.
After Bernhard is released from prison, the judge said, he must serve an additional two years under the supervision of federal investigators.
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