By Nicholas Grube

A Crescent City attorney was taken into custody this week on suspicion of embezzlement, grand theft and passing checks with the intent to defraud.

In an arrest warrant, investigators say Jill A. Scholten, 46, would take money out of a client's trust account and spend it for personal use at various places, including local gas stations and casinos.

Scholten, whose office is located on H Street, is currently out on bail. In an interview Friday, she denied the allegations.

andquot;I learned of all of this on Wednesday for the first time. And as soon as I heard about it, I voluntarily turned myself in to the (Del Norte County) Sheriff's Department in an attempt to fully cooperate with the legal process,andquot; Scholten said. andquot;I vehemently deny the allegations and believe the issue can be resolved without further legal proceedings.andquot;

No formal charges have been filed against Scholten, but Del Norte County District Attorney Mike Riese said the State Bar of California asked him to prosecute.

andquot;We got a referral from the State Bar and a request for prosecution and parallel investigation,andquot; Riese said. andquot;I will now evaluate any new evidence that may come in since she turned herself in and decide what charges to file.andquot;

Riese said he could not comment further on the case or disclose any details because there has been no charging decision yet.

According to court documents, the State Bar of California started investigating Scholten after it received a written complaint from one of her clients.

In the letter addressed to the State Bar, the client, who hired Scholten to represent her in a divorce, states Scholten was supposed to hold $25,123.63 in a trust account.

The money came from the sale of a house belonging to the client and her husband, and was to be split between the two parties after a judge made a ruling in the case. A portion, too, was to go to Scholten for attorney's fees.

andquot;On September 7, 2007, when our divorce became final, Jill (Scholten) gave a check for the of $11,623.81, (my portion of the money),andquot; the client's letter states. andquot;I deposited the check in my personal account and a couple of days later I found out that the check had bounced because there was not enough money to cover it.andquot;

The client then contacted Scholten, who said she would give her client the money in cash.

andquot;When I showed up at her office I was given an envelope with $7,500 in cash and a check for the amount of $4,123.81,andquot; the letter states.

This check, too, bounced, according to the letter.

Court records also indicate that a $3,467.55 check written by Scholten to the client's husband also bounced.

A subsequent investigation by the State Bar of California, in conjunction with the Del Norte County District Attorney's Office, turned up records showing Scholten taking money out of her client's trust account on numerous occasions over the course of three months while her client's divorce was still pending.

Court records show multiple cash withdrawals from the trust account ranging from $60 to $8,000. There were also checks written from the account to Charter Communications, Pacific Power and multiple casinos, including Elk Valley, Lucky 7 and Seven Feathers Casinos.

In all, court documents show 35 withdrawals from the account for a total of $23,712.84.

According to Allen Blumenthal, the supervising trial counsel for the State Bar, a trust account is to ensure the safety of a client's money during legal proceedings.

Blumenthal declined to discuss specifics of any pending investigation.

andquot;The purpose of a general client trust account is to keep that separate and that's why a trust account exists,andquot; Blumenthal said. andquot;It's a separate account just for client funds.andquot;

Under State Bar guidelines, attorneys are not to take any of a client's money out of these accounts, he said.

andquot;We call that a misappropriation and that's a very serious violation at the State Bar, I mean very serious, and that can lead to disbarment,andquot; Blumenthal said.

Scholten, however, claims she committed no wrongdoing when it came to her client trust account.

andquot;I utilized my trust account as prescribed by the rules of the State Bar.andquot;

Scholten was admitted to the State Bar in 1993 and does not have any record of disciplinary or administrative actions against her.