Lawyers involved in handling fraudulent claims challenge order requiring the return of legal fees

By Louisiana Record reports | Feb 26, 2015

NEW ORLEANS – A New Orleans law firm whose clients filed Deepwater Horizon claims based on false tax forms is disputing a court order that it return fees received for helping process those fraudulent claims.

In a recent court filing, the Andry Lerner law firm has insisted that even though some clients may have received fraudulent payments, the firm should be allow to keep the fees since there is no evidence it contributed to the fraud.

Last week the firm filed a response to special investigator Louis Freeh, who is seeking to have the lawyers return the fees. In its response, Andry Lerner says it knew of no case law requiring the return of the money.

“[I]t is the position of Andry Lerner that existing case law does not authorize the Court to enter a judgment requiring Andry Lerner to return its earned fees in the absence of an express finding that Andry Lerner participated in the asserted fraudulent act,” the filing reads.

The law firm has requested a hearing on the matter, but has not yet been granted one. In previous Deepwater Horizon fraud cases, U.S. District Judge Carl Barbier has upheld fee clawbacks and in other cases lawyers have voluntarily returned fees to the multibillion dollar oil spill trust fund.

The Andry Lerner law firm, founded by New Orleans-based attorney John Andry and Las Vegas-based trial lawyer Glen Lerner, was created specifically to recruit damage cases associated with the 2010 Deepwater Horizon oil spill. However, the firm ran into trouble when it was accused by Freeh of engaging in fraud by attempting to pay kickbacks to court employees responsible for settling claims.

The most notable of these fraud cases involves Slidell shrimper Casey Thonn who claimed $357,000 in spill-related damage. Thonn has since pleaded guilty to filing a fraudulent claim and Barbier has ordered all of the lawyers and accountants involved in the case to return the fees they have received.

According to court documents, the lawyers and accountants, including an accounting firm co-owned by John Andry's sister, have repaid the fees. But, the Andry Lerner law firm has not.

Subsequently, Freeh found another claim Andry Lerner filed on behalf of Tony Riley, a part time shrimper who is also alleged to have used false tax form to inflate his claim from $25,700 to $221,000.

According to Freeh, Riley, the owner of a 41-foot shrimping vessel, was initially granted $25,700 in seafood spill payments based on Louisiana Department of Wildlife trip tickets showing his shrimp landings. After that payment was granted, Freeh says the Andry Lerner law firm sought reconsideration of Riley’s claim and filed amended tax forms with the DHECC. Those tax forms exponentially increased Riley’s claim and for their work of which Andry Lerner reported in the latest court filing it alone received over $40,000.

"It is  appalling that this firm is seriously attempting to argue they should be allowed to profit from fraud," said Melissa Landry, executive director of the state's leading legal watchdog group Louisiana Lawsuit Abuse Watch. "Hopefully, when the Court considers this matter, it will be mindful that the purpose of this settlement is to compensate legitimate victims, not to make fraudsters and their lawyers rich."

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