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Settlement scam leads to prison for attorney

Prosecutors say the lawyer would accept deals _ and money _ without notifying his clients.

A veteran St. Petersburg lawyer accused of accepting settlements behind his clients' back and pocketing almost $300,000 will go to prison.

John "Skip" Walters, 56, pleaded no contest Monday to four charges of grand theft. He avoided a trial and has agreed to serve 13 months in prison, followed by two years of community control and as much as 14 years of probation for one charge alone.

Pinellas-Pasco Circuit Judge Mark Shames also ordered Walters to pay about $291,000 in restitution.

Walters, who was advised by his attorney not to comment, will be formally sentenced Feb. 21.

"I think he got off very lightly," said Stephen Walters, the victim who lost the most. "He stole money from a 6-year-old boy."

Stephen Walters and his wife at the time, Bonnie, hired John Walters to represent them in a medical malpractice lawsuit. The couple's son was born with Down's syndrome, a condition they say their obstetrician, midwife and hospital never identified as a risk. Walters and his former clients are not related.

The Walterses' got two settlements: $243,000 from the doctor's insurance company, which they told their attorney to accept, and $250,000 from the midwife's insurance company, which they told John Walters to reject.

Investigators say Walters kept the $243,000 for himself and secretly accepted the $250,000. Out of both pots of money, John Walters gave the Walterses $106,000. He kept $300,000 for himself and doled out $60,000 to other clients and lawyers, state prosecutors said.

Apparently, other clients of John Walters had been cheated, according to prosecutors who charged Walters in November 1998.

One of those clients, Barbara Milan, said Walters lied to her about a settled lawsuit. In 1997, Walters told Milan that her lawsuit was pending when in fact it had been settled three years earlier.

State prosecutor Bob Lewis said Walters kept the $16,000 he got from the defendant's insurance company and never told Milan about it.

Milan filed a Florida Bar complaint against Walters, who has been licensed to practice since 1971. In March 1998, Walters resigned from practicing law in Florida for five years after Milan's complaint, which sparked the criminal investigation.

In another case, prosecutors said, Walters was supposed to pay $32,000 for a client's medical bills out of a $107,500 settlement that he won for the client. The bills never got paid.

Walters also was accused of keeping a $4,000 settlement in a 1995 case that Walters told his client he should drop. Walters negotiated that deal without telling his client, Lewis said.