Heavy Hitter Glen Lerner faces some heavy hits himself in New Orleans over his representation of hundreds of clients in the British Petroleum oil spill case.
Former FBI Director Louis Freeh said there is evidence Lerner and three other attorneys involved in the case tried to “corrupt the settlement process.” He suggested they be investigated by the Department of Justice for conspiracy, money laundering, mail and wire fraud, and perjury. Freeh also recommended Lerner and the others be referred to state Bars for possible disciplinary action.
U.S. District Judge Carl Barbier of New Orleans supported those recommendations in a Sept. 6 order.
He also ordered Lerner and the others to show cause why the judge shouldn’t do as Freeh also recommended and disqualify Lerner and his law firm from representing clients, or collecting any fees, from the April 20, 2010, oil spill in the Gulf of Mexico. The damage was so great that BP created a $20 billion trust to pay claims.
What emerged from Freeh’s 66-day investigation is an allegation that law school friendships were exploited to put Lerner and Jon Andry’s clients at the Andry Lerner Law Firm in New Orleans at the head of the settlement list so they will be paid faster. They were apparently working with two attorneys working on the settlement side — Louis Sutton and Christine Reitano, who are married. In June, Sutton resigned and Reitano was fired.
Freeh also recommended the judge disallow a $7.9 million claim by the Andry Law Firm, which is separate from Andry Lerner.
Lerner has law firms in Las Vegas, Louisiana, Illinois and Florida. With a forceful personality and an advertising budget of $3 million a year in Las Vegas alone, Lerner has become one of the biggest personal injury lawyers in Nevada, stemming primarily from traffic accidents.
Lerner’s Las Vegas office is the one that authorities allege is involved in laundering money to conceal secret payments to Sutton, who went to Tulane Law School in New Orleans with Lerner and Andry.
Freeh, appointed as a special master in the case, said he has found evidence of an agreement among Sutton, Andry and Lerner to corrupt the settlement process to enrich themselves by using Sutton to speed the claim process for their clients. In an email, Lerner asked about capitalizing on Reitano’s insider position. “How can we use that to our benefit?” Lerner wrote in an email. Lerner wanted his claims moved to the front of the line. “I need my claims expedited,” he wrote to Sutton.
When Reitano went to work for the Claims Administration Office, she and her husband referred their client Casey Thonn to Andry Lerner. Freeh also said the claim of Thonn, a shrimp boat owner, needs further investigation. Thonn’s claims started at $1,550 and rose to $357,000.
BP is challenging the legitimacy of some of the claims, including this one.
The emails showed that Reitano wanted a referral fee for the Thonn case, yet that was never put in writing. Instead, money was circuitously transferred to Lerner’s Las Vegas office and eventually to Sutton through a water reclamation business owned by Sutton and Lerner. The fees totaled $40,640. Also, Sutton was receiving $10,000 a month through the Crown reclamation business. Neither Sutton nor Lerner disclosed that Lerner was paying Sutton a referral fee and a salary from Crown.
All this was detailed in Freeh’s 95-page report, and the judge issued his show cause order so that the attorneys can present opposition to Freeh’s recommendation that they essentially be blocked from working oil spill claims. No hearing date has been set.
Lerner’s attorney Dominic Gentile issued a short news release saying Lerner has cooperated with Freeh’s inquiry and does not agree with all of the report. “He strenuously denies any suggestion of misconduct on his part and looks forward to addressing the facts at the appropriate time in a fair and public proceeding.”
It’s possible Lerner could be disciplined by both the state Bars in Louisiana and Nevada, where he has had public reprimands for various reasons, including not showing up for a scheduled trial and four instances of allowing an attorney in his firm who wasn’t licensed in Nevada to handle cases.
Geoff Morrell, BP’s senior vice president of communications and external affairs, issued a statement saying Freeh’s report “confirms what BP has suspected for some time: There has been fraud and unethical conduct within the facility itself and among various claimants and their lawyers.” He calls the evidence of conflicts and misconduct in the Freeh report “shocking.”
Lerner’s latest television ad campaign is “Get Glen.”
It seems quite likely that Louis Freeh may have done precisely that.
But Lerner’s attorneys haven’t weighed in yet or even had time to evaluate Freeh’s evidence. So let’s hear from them when they have something substantive to share, then see what a judge in New Orleans decides.
Jane Ann Morrison’s column appears Monday, Thursday and Saturday. Email her at Jane@reviewjournal.com or call her at 702-383-0275.