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Jury: Lawyer Stole From Clients

Melanie Rae Blum is found guilty of thefts from plaintiffs involved in UCI embryo cases. She is immediately taken into custody.

September 08, 2004|Claire Luna and David Reyes | Times Staff Writers

A lawyer who built a national reputation by crusading for victims of embryo thefts at UC Irvine was convicted Tuesday of embezzling more than $150,000 from her clients' settlements.

Melanie Rae Blum, 55, was led in handcuffs from the Santa Ana courtroom after the verdict was announced. Jurors deliberated 1 1/2 days before finding Blum guilty of 10 counts of grand theft and acquitting her of two others.

"After looking at what they suffered all those years, I would just hate to be one of her clients," said juror Jeff Galceran, 33, a Costco manager who lives in Santa Ana.

Former client Joanne Laverson, who obtained a $150,000 settlement with Blum's help after four of her embryos disappeared from a UCI clinic, rejoiced upon learning of the guilty verdicts.

"There's the pain of trying to conceive a child, compounded with a doctor who runs away with your eggs, and then on top of everything your lawyer betrays you," said Laverson, 49, of San Marcos. "She took advantage of other people's misery to make money."

Laverson and her husband endorsed their settlement check to Blum so she could sort out costs and attorney's fees, then said they never saw any of the money until they sued her. On that charge, as on most of the others, jurors said there was an abundance of evidence against Blum.

"There was definitely a pattern of taking people's money, then stringing them along," said jury foreman Sam Campos, 63, a retired manufacturing manager from Orange. "It was so blatant and went on for so long it was ridiculous."

In the late 1990s, Blum gained national prominence as lead attorney in a landmark series of lawsuits against UCI and its now-defunct Center for Reproductive Health.

Two doctors at the fertility clinic were convicted of stealing eggs and embryos from fertility treatment patients and implanting them into other infertile women. The university eventually paid nearly $20 million to 107 couples.

Blum's trial started Aug. 5 and included testimony from several of Blum's former clients, her accountant and Mark Roseman, her former husband and former law partner.

Roseman pleaded guilty in October to taking settlement money from their clients and has been sentenced to four years in prison.

Blum will be sentenced Oct. 29 and could face up to 10 years and eight months in prison, although prosecutor Douglas Brannon said she could receive "considerably less than that."

In ordering her taken into custody immediately, Judge Richard F. Toohey cited Blum's involvement in setting up offshore bank accounts.

The judge also ordered his clerk to notify the State Bar about Blum's convictions; the organization is likely to revoke her law license.

Though Blum was charged with stealing $150,000, prosecutors believe that Blum and her former husband together siphoned off as much as $1.5 million from their clients and doubt they will ever know exactly how much each of them took.

The State Bar's client security fund has already paid $57,000 to three of Blum's victims. Four others have filed claims seeking more than $533,000.

Blum, her lawyer said, has already paid $500,000 in restitution to her former clients.

Blum appeared calm as the bailiff led her from the courtroom Tuesday, although her lawyer said she was "very, very upset."

They had not anticipated the guilty verdicts or that she would be held without bail, said attorney John Barnett.

"She has no money and has no place to flee to," Barnett told the judge. "And she has to care for her teenage son."

During the trial, Barnett argued that on some of the charges, his client didn't know what her then-husband was doing with the law firm's accounts, and in others, that she was entitled to the money.

Blum testified that she threw herself into her work in the fertility lawsuits, hoping her time on the case would be a penance of sorts for an abortion she said her husband had forced her to have years before.

She was oblivious to her husband's thievery, she said -- a claim jurors said they didn't believe.

"We all had compassion for her," Campos said. "But that did not give her reason to use clients' money inappropriately."

The stolen money supported Blum's cushy lifestyle, even after her divorce from Roseman in 1999, according to the prosecutor and court records.

She drove a Jaguar and threw a lavish bar mitzvah for their son at the Newport Marriott in 2001.

Days before their son's party, Roseman e-mailed his former wife: "The truth is you are paying for our son's celebration at the cost of clients' agony that should be eating you up inside.... How do you sleep?"

Jurors said that on the two counts for which they acquitted Blum, there was some doubt that she knew what was going on. Roseman admitted embezzling at least part of the money in one case, and in the other, the charge was cloudy because there was a lien against property, Brannan said.

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