Deepwater settlement lawyer accused of unethical acts returns fee earned on fraudulent claim

NEW ORLEANS – A former Deepwater Horizon settlement lawyer has paid back the secret referral fee he received as part of a purported scheme to influence claims on behalf of a local law firm.

New Orleans attorney Lionel “Tiger” Sutton III has acquiesced to a court order to repay the $35,700.23 in proceeds he received from a $357,000 claim that was later found to be based on false tax returns.

According to special investigator Louis Freeh, Sutton played a pivotal role in an alleged scheme to unduly influence claims on behalf of Andry Lerner law firm and its partners Jon Andry and Glen Lerner when he was employed by Claims Administrator Patrick Juneau. However, Sutton has maintained the payment he received from Lerner was for work he previously completed on the claim for Slidell shrimper Casey Thonn.

U.S. District Judge Carl Barbier, who is overseeing the Deepwater Horizon case, ruled in late February that Sutton, along with Andry and Lerner “engag[ed] in conduct involving dishonesty, deceit and misrepresentation.” However, Barbier stopped short of saying the men participated in a money-laundering scheme, as Freeh maintained, or any other illegal activity. Barbier did recommend, however, that all three men be referred to attorney disciplinary boards for possible disbarment.

Thonn’s claim has been cited by BP and other critics of the settlement facility as an example of the ease with which the claims program can be defrauded. Thonn has pleaded guilty to using fake IRS forms to justify his $357,000 claim and awaits sentencing on two counts of wire fraud.

Meanwhile, the Andry Lerner law firm has challenged an order requiring it to return the fees it earned from the Thonn settlement. Andry Lerner is also fighting back on another clawback motion involving a claim filed by fisherman Tony Riley. Freeh said in court filings that Riley's $221,000 settlement is fraudulent.

Freeh's report revealed that Andry Lerner at one time had at least 675 claims associated with the Deepwater Horizon incident. Barbier has forbidden Andry and Lerner from handling any more Deepwater cases and ordered the firm to pass all of its oil spill cases to other lawyers. While Barbier said Andry and Lerner are entitled to compensation for work they have already done on those cases, he has not approved a pay rate. Barbier also said any fees the law partners are due to collect will be held in escrow until all Deepwater claims handled by the firm have been resolved.

In addition to Sutton, the accounting firm that handled the Thonn claim, Coastal Claims Group LLC, which is partially owned by Andry’s sister, repaid the settlement fund $14,280.10 for its part in assisting in the preparation of the claim.