Fee dispute involving law firm accused of filing fraudulent BP claim reveals secret referral system lawyers used to generate claims

By Kyle Barnett | Aug 15, 2015

NEW ORLEANS – A law firm that has been banned from representing Deepwater Horizon claimants is facing multiple clawback requests including one worth $221,000.

NEW ORLEANS – A law firm that has been banned from representing Deepwater Horizon claimants is facing multiple clawback requests including one worth $221,000.

Now that firm is claiming another law firm should be at least partially responsible for repaying the legal fees collected from an allegedly fraudulent claim.

In January, the Andry Lerner law firm, along with partners Jon Andry and Glen Lerner, were asked to return $54,207 in legal fees collected off of a $221,681 Deepwater Horizon claim filed on behalf of a Plaquemines Parish boat captain, which was later found by a court officer to be fraudulent.

As evidence to back up the claim that they should alone be responsible for the return of the legal fess, a referral fee contract between the Andry Lerner law firm and the Palazzo Law Firm was introduced to the court. The details of the contract, which were previously undisclosed, provide the parameters for an arrangement whereby Andry Lerner agreed to pay Tony Palazzo and his former partner David Bravo 35 percent on any contingency fees from the cases referred by the Palazzo Law Firm.

Legal observers say the details of the referral fee arrangement raise new questions about the case.

“Lawyer referral fees are common throughout the legal profession, but they are considered a well-kept secret,” Melissa Landry, executive director of Louisiana Lawsuit Abuse Watch, said. “Lawyers are basically the only professional group that still consider it ethical to pay referral fees, and most members of the general public don’t even realize that many attorneys they interact with, particularly in mass tort litigation, are collecting fees.”

It is unclear whether the referral fee arrangement between Lerner and Palazzo was disclosed in this case, which centers around a Deepwater Horizon claim filed by Plaquemines Parish boat captain Tony Riley.

Riley is accused of falsifying tax documents, which he submitted to the Deepwater Horizon claims facility in support of his claim, in addition to handwriting shrimping trip tickets purportedly showing shrimp sales a court officer says never occurred.

In fact, special master Louis Freeh, an ex-FBI director brought in to handle cases of corruption in the court, says some of Riley’s trip tickets reflect dates where he had worked 12-hour shifts as a deckhand and likely would not have been able to earn shrimping income as well.

Riley was initially offered a $25,700 seafood fund payment based on Louisiana Department of Wildlife trip tickets showing his shrimp landings. Following the initial offer Andry Lerner filed the amended and allegedly falsified forms, some of which the court says were never signed by Riley, to greatly increase Riley’s payout.

Since the clawback request was initially filed and U.S. District Judge Carl Barbier mandated the return of the funds, Andry and Lerner have been sanctioned by the court and disallowed from representing any Deepwater Horizon claimants for allegedly trying to influence claims by making secret referral payments to a claims center employee.

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