Civil litigation stayed as lawyer undergoes investigation for fraud concerning “phantom” BP claims

NEW ORLEANS – A federal court has stayed litigation brought against Texas-based plaintiff’s attorney Mikal Watts by BP while he is under criminal investigation for allegedly falsely representing himself as counsel for several deckhands and fishermen supposedly affected by the BP Deepwater Horizon oil spill.

U.S. District Judge Carl Barbier stayed the civil litigation and mandated that parties involved make a report to the court on the status of the criminal within 120 days.

A further motion by BP requesting a second distribution of the Seafood Compensation Fund was denied by the court.

In mid-December BP filed a lawsuit against Watts claiming he had faked half of the social security numbers of the nearly 43,000 claimants he asserted he was representing. BP called those who could not be linked to social security numbers as “phantom” claimants and also found some of the names on the list belonged to deceased people.

The list of claimants Watts provided to BP in 2011 comprised 76 percent of claimants to the BP Seafood Fund for which BP set aside $2.3 billion for payments. However, Watts only pursued 648 claims against the fund and of those only eight were found to be eligible for compensation.

After it was revealed that the majority of the claimants on Watts’ list were thought to be faked, a group of Vietnamese fishermen also filed suit claiming that Watts signed them up as clients even though they had never asked him to represent them.

Watts requested the stay in the lawsuit after he revealed in late January that he was under investigation by the Secret Service.