(This article has been updated)
NEW ORLEANS – A local attorney who was implicated in an attempt to hide a referral fee provided to a BP claims attorney while a $7.9 million claim was being handled has asked the investigator who returned to be recused.
Jon Andry, who set up Andry Lerner Law Firm with Las Vegas-based attorney Glenn Lerner solely to handle BP claims from the 2010 oil spill, was named as being part of an alleged kickback scheme in an investigation report released by ex-FBI Director and Special Master Louis Freeh.
Andry now claims Freeh should be disqualified from being a judicial officer because Freeh is an owner of a consulting firm and partner at a law firm both of which have worked with BP’s main defense firm Kirkland & Ellis on other cases, including some that are ongoing.
Although Freeh disclosed that he had a relationship with Kirkland & Ellis, Andry claims the disclosure did not go far enough and that Freeh should provide more in-depth information on his ties to the firm so the court can further determine if Freeh should be relieved from his role with the court.
The move comes after Freeh was asked by U.S. District Judge Carl Barbier to investigate reports of potential fraud in the BP claims process that were initially uncovered and presented to the court after an internal audit by Claims Administrator Patrick Juneau’s office returned findings of potential conflicts of interest.
After a two-month long investigation Freeh revealed evidence that claims process attorney Lionel Sutton had received a $40,000 fee for referring a $7.9 million claim to Andry Lerner that was routed, in what Freeh referred to as a money-laundering scheme, through Lerner’s Las Vegas-based law firm Glen Lerner & Associates and paid to Crown LLC, a water reclamation company owned by Sutton and in which Lerner had previously invested $1 million. Although Freeh reported that he found evidence of Sutton allegedly received referral fees there is no evidence that those fees had an effect on the outcome of the case, the report said.
Sutton and his wife Christine Reitano, who originally handled the claim before she was hired as a claims process, are no longer with the Court Supervised Settlement Program and Freeh recommended the U.S. Department of Justice investigate whether any federal statutes were violated.
Lewis Unglesby, of the Baton Rouge-based Unglesby Law Firm, filed the motion on behalf of Andry.