NEW ORLEANS – An investigator probing fraud in the multi-billion dollar Deepwater Horizon oil spill settlement has filed a clawback request against yet another Gulf Coast fisherman, saying he filed fake paperwork to justify a $168,000 claim payment.
Jimmy Shoemaker Jr. of Pass Christian, Miss. is the latest fisherman to come under investigation by Louis Freeh, the former FBI director hired 18 months ago to root out fraud in the massive oil spill settlement case. In court papers filed late Wednesday, Freeh asked U.S. District Judge Carl Barbier to demand the return of $168,692 paid to Shoemaker, saying the fisherman falsified IRS forms specifically designed to defraud the settlement trust fund.
The move against Shoemaker is the most recent of about a half-dozen actions Freeh has filed against Gulf Coast fishermen in the past year. In every case, Freeh has alleged that fishermen used phony documents, often unsigned, unfiled IRS documents, to justify substantial claims payments that were made by settlement administrator Patrick Juneau. Though Juneau has the authority to require verifiable IRS documents before making claims awards, he has so far declined to do so, saying he is not mandated to do so by the settlement agreement and that the small amount of fraud such a policy would prevent is outweighed by the added work it would cause to his operation.
According to court filings, Minneapolis-based law firm Faegre Baker Daniels, represented Shoemaker in the claim and has already paid back the $42,173 fee it received in the case, after receiving a visit from Freeh. The Faegre firm, which played a prominent role in litigation associated with the 1989 Exxon Valdez oil spill, is one of the most active firms in the BP case. According to recent court filings, it leads all law firms in the amount collected in the BP case – more than $177 million. According to leaked records, the Faegre firm was also the recipient of 34 seafood claims that were expedited by Juneau's office, shortly after BP agreed to settle the case.
Freeh said in his filing that Shoemaker initially provided a captain and shrimp vessel owner claim to the DHECC stating that he had made $4,840, as shown in his 2009 tax return, but he later amended that claim by to show he had actually made $44,480 in that year. He similarly amended his 2009 tax return from $4,550 to $44,550 claiming in both instances he had mistakenly left off a digit off his income in both instances. The amended paperwork made Shoemaker eligible for enhanced payments under the settlement formula.
According to Freeh, Shoemaker never actually filed the amended tax returns with the IRS.
“The record unquestionably reveals that Shoemaker knowingly presented false information to the Court-supervised DHECC to obtain $168,692 from the Deepwater Horizon Trust,'' Freeh said in his filing.
Freeh added that the fake forms were created "solely to support fictitious claims for lost shrimp revenue.''
In a interview with the Louisiana Record earlier this year, Juneau said his office does not routinely check tax documents provided by claimants to ensure they have been properly filed with the IRS. BP says that Juneau's refusal to verify claims with IRS documents amounts to a fundamental lapse in due diligence, making the claims fund vulnerable to fraud.
Melissa Landry, with the grassroots legal watchdog group, Louisiana Lawsuit Abuse Watch, said blatant instances of fraud such as this undermine public confidence in the integrity of the claims system.
“Frankly, it is inconceivable that one hapless fisherman managed to pull the wool over on thousands of lawyers and accountants working for the Claim’s Administrator’s Office—but I suppose fraud is hard to find if you turn a blind eye toward it,” she said.