Philip James Layfield, Theft of Client Funds, California 2023

Philip James Layfield, 44, a suspended California personal injury attorney and CPA, was indicted today on federal charges for allegedly stealing approximately $2 million from a severely injured car accident victim’s $3.9 million settlement — leaving the victim with just $25,000. The indictment, returned by a federal grand jury in Los Angeles, charges Layfield with one count of mail fraud and two counts of money laundering.

Layfield, formerly of the Irvine-based Layfield & Barrett law firm (L&B), was arrested last week in New Jersey after returning to the U.S. from Costa Rica, where he had relocated following his firm’s collapse. Facing dwindling revenues, Layfield allegedly began a calculated scheme to exploit his clients: filing sham lawsuits to inflate fees, settling cases without notice, and siphoning off settlement funds meant for victims.

The most brazen theft centers on a 2016 crash in Orange County, where a client suffered life-altering injuries after being struck by a vehicle. After securing the $3.9 million payout, federal prosecutors say Layfield funneled the bulk of the victim’s share into his personal accounts and used portions to cover L&B payroll, all while telling the victim the case was still pending. The victim, unaware their settlement had been paid, received only a fraction of what was owed.

The indictment details how Layfield used interstate financial systems to cover his tracks — routing stolen funds through law firm accounts and executing wire transfers that triggered federal jurisdiction. These actions form the basis of the two money laundering counts, each carrying a maximum 20-year prison term. The mail fraud charge stems from electronic billing records and settlement documents sent across state lines.

Layfield will be arraigned in Los Angeles after being transported by the U.S. Marshals Service from New Jersey. If convicted on all three counts, he faces a statutory maximum of 60 years in federal prison. Federal authorities emphasize that an indictment is not a conviction — Layfield is presumed innocent until proven guilty in court.

The investigation was conducted by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, IRS Criminal Investigation, and the FBI. The case is being prosecuted by Assistant U.S. Attorneys Mark Aveis and Eddie A. Jauregui of the Major Frauds Section, who vow to hold corrupt professionals accountable. Victims of Layfield’s alleged fraud may be identified as the case unfolds.

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