A former partner at prominent local law firm Lindquist & Vennum, PLLP, has been sentenced to six-and-a-half years in prison for embezzling approximately $2 million from clients and the firm.

U.S. District Court Judge David S. Doty handed down the sentence to former attorney Michael Scott Margulies, 57, on Tuesday. Margulies faced a maximum sentence of 20 years in prison based on federal sentencing guidelines.

Margulies pleaded guilty to one count of wire fraud on June 8. He admitted that he engaged in a fraud scheme that spanned from 1994 to 2010. Through that scheme, he stole money from Minneapolis-based Lindquist & Vennum by submitting false invoices and expense reports and by forging checks, according to Margulies' plea agreement.

A 23-year employee of Lindquist & Vennum, Margulies was fired by the firm on March 15 following an internal investigation that uncovered the embezzlement. He agreed in April to be disbarred.

Lindquist & Vennum Managing Partner Daryle Uphoff told Twin Cities Business in March that the firm first became suspicious of Margulies in early February after a client complained about having been double-billed by him. When the client asked Margulies for its money back, he delayed the repayment.

The firm then discovered that Margulies had submitted expense reports for dinners, lunches, and other events that had never occurred. After more digging, the firm's leaders discovered that Margulies had established Triad Services, a fake business through which he stole money.

On April 2, 2009, Margulies did a wire transfer of $58,000 from a client's New York bank account into his own bank account, the plea agreement indicated.

The case was the result of an investigation by the Federal Bureau of Investigation.

Shortly after allegations about the embezzlement surfaced, Margulies resigned from the St. Paul Planning Commission, which he'd served on for three years. He also reportedly resigned from the Children's Theatre Company board.

One former client of Margulies', developer CMB Minnetonka, LLC, filed a lawsuit in Ramsey County District Court in April, accusing him of stealing at least $1.5 million from it-mostly between 2003 and 2007. According to the suit, the money was used to pay liens or mortgages and to fund extensive remodels to the St. Paul mansion at 516 Summit Avenue that he shared with his wife until their divorce last year.

A Ramsey County District Court representative said Wednesday that the two parties have been referred to mediation. A settlement conference has been scheduled in July 2011, and a jury trial has been scheduled for August 29.

Lindquist & Vennum, founded in 1968, is the state's sixth-largest law firm based on licensed Minnesota attorneys, of which there were 163 as of April 2010.