Kyle Barnett Mar. 18, 2015, 4:06pm


NEW ORLEANS – A St. Bernard Parish man is accused of misrepresenting his income as a commercial shrimper to become eligible for nearly $200,000 in damages from the Deepwater Horizon claims center.

Special Master Louis Freeh and settlement administrator Patrick Juneau have filed court papers demanding that Vernon Alfonso Jr. repay a $187,000 settlement he received from the Deepwater Horizon settlement fund and that he barred from filing future claims. The court officials accused Alfonso of misrepresenting the source of his income on IRS records to make him eligible for a larger damage settlement than he deserved.

In their filings, Freeh and Juneau also demanded that Alfonso's law firm, Faegre Baker Daniels LLP of Minneapolis, return $46,000 in fees it received for filing the claim.

However, Faegre Baker Daniels indicated it would fight the clawback. In a letter to Freeh's office, Faegre Baker Daniels partner Craig Coleman characterized the discrepancy in Alfonso's IRS records as an honest mistake.

“Because Mr. Alphonso was overpaid as a result of a mistake rather than an intentional misrepresentation, we continue to believe that such a recalculation offers the appropriate resolution of this matter,” Coleman wrote.

According to Freeh and Juneau, Alfonso deliberately characterized money that he made from other employment as shrimping revenue, thereby making himself eligible for a larger award and expedited settlement of his damage claims. In their court motion, Freeh and Juneau say Alfonso refiled IRS documents so he could show more than $40,000 in annual shrimp revenue. They also said he lied under oath when confronted by investigators.

"Alfonso should be required to return the payments from these claims so as to make the [settlement fund] whole, deprive Alfonso of an unjust enrichment and deter others from similar misconduct,'' Freeh and Juneau's motion states.

In his letter to the court, Coleman said the sanctions proposed by Freeh and Juneau are too harsh and said that Alfonso's award should instead be recalculated using the more modest revenue figure.

Faegre Baker Daniels is the second law firm in recent weeks to fight adjacent clawback proceedings.

The Andry Lerner law firm, which has since been barred from representing Deepwater Horizon claimants, for engaging in an alleged kickback scheme, has disputed the court’s authority to clawback legal fees on a $357,000 award to a Slidell shrimper Casey Thonn. Thonn later pleaded guilty to wire fraud in criminal court for providing false tax documents to the claims center. In the dispute, Andry Lerner has said while the claim may have been fraudulent, it did not know that at the time it provided work on the claim and should be allowed to keep the fees since there is no evidence that the firm contributed to the fraud.

Alfonso joins the increasing ranks of claimants who are accused of falsifying tax income information on their claims forms to greatly increase their claims awards, resulting in clawback requests from the court and in some cases criminal indictments. In previous court filings BP has suggested that the Seafood Fund, where these fraudulent claims have been uncovered, is rife with fraud.

More News