Crawford Lewis dropping suit against Bernhard

The Crawford Lewis law firm is dropping its lawsuit against former attorney James M. "Tres" Bernhard, after Bernhard reached a $2.2 million settlement with two investors involved in the suit.

Crawford Lewis attorney Mary Olive Pierson confirms the firm is dismissing the suit it filed in May against Bernhard, who worked for Crawford Lewis as a tax credit expert from 2008 until March. The suit accuses him of pocketing funds from the transfer of movie industry tax credits that either didn't belong to him or didn't exist, and of failing to deliver tax credits he was retained to collect on behalf of investors.

Pierson could not discuss the settlement, citing a confidentiality agreement. But in an interview several weeks ago she suggested the terms of such a settlement would include a $2.2 million payment by Bernhard to two investors, who had retained him to collect tax credits they had purchased from Nerjyzed Entertainment and DMG Holdings but never received.

Crawford Lewis was potentially liable for the failure to deliver, as Bernhard was working on the firm's behalf at the time. Earlier this summer, he reached a separate settlement with several other investors who were owed money for purchasing bogus movie industry tax credits.

The settlement ends the legal dispute between Bernhard and the politically connected law firm. But the fallout from the scandal remains. Bernhard can no longer practice law, having voluntarily surrendered his law license in lieu of facing disciplinary action from the state's Office of Disciplinary Council.

Crawford Lewis, meanwhile, has lost all but a handful of the 17 attorneys in its practice in the past month. It is unclear whether their departure directly resulted from the Bernhardt suit or if it is tied to a $6.6 million in liens the IRS has put on the firm for failing to pay employment taxes from 2006 to 2009.

Pierson and Crawford Lewis decline to comment on the downsized firm.

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