Gulf Damage Claims Attorney Accepted Kickbacks

Evidence clearly shows that a lawyer inside a court-supervised facility that handles damage claims over the 2010 Gulf of Mexico oil spill and two outside attorneys lied about a system of payments set up to help speed claims through the process, a federal judge said Friday.

U.S. District Judge Carl Barbier’s comments came at the end of a day of testimony and arguments centered on allegations that Lionel Sutton III, a lawyer working for the center, got kickbacks in exchange for helping speed through a law firm’s client’s claims.

Sutton, the only accused person to testify, denied any wrongdoing. He has resigned from the center.

“I wasn’t a paid insider,” Sutton testified. “I did not advance any claims for anybody.”

Accused along with Sutton is his wife, Christine Reitano, who also worked at the claims center.

The hearing was convened by Barbier to look into the allegations, which were spelled out in a 2013 report commissioned by Barbier.

Barbier said that Sutton and two outside lawyers – Jonathan Andry and Glen Lerner – lied about the payments and acted unethically.

The judge charged that the three lawyers, who went to Tulane University law school together, clearly had acted unethically.

Sutton is accused of receiving about $40,000 for helping speed up the claims of Andry and Lerner clients.

The proceedings before Barbier are not criminal in nature. None of the lawyers has been charged with a crime.

Barbier said he was deeply troubled by the lawyers’ moves to hide the payments in a “circuitous way.” He was especially harsh in his criticism of Sutton for not divulging several conflicts of interest and lying about his involvement with Andry and Lerner.

He also accused Sutton of lying to the claims center administrator, Patrick Juneau, and to a court-appointed special master, former FBI Director Louis Freeh.

Barbier said Sutton also should have disclosed before he took the job at the claims center that he was a business partner with Lerner in a separate venture and that he was involved with an offshore company seeking a damage settlement from BP.

At Friday’s hearing, Barbier said there was no clear evidence that Reitano knew or asked for a fee from Andry and Lerner but he did criticize her for a conflict of interest involving a job connected to the claims center for her husband.

The judge said that while the lawyers had violated ethics rules, he said there was no evidence that the claims process itself was manipulated or corrupted. But Barbier said much harm had been done to the claims center because after the allegations were revealed claims were put on hold and the process suffered negative publicity.

As a result, Barbier said, the claims process had received “tremendous injury” to its integrity.

“I rather regret that it has come to this. This is not what I was signing up to do when I took this job,” he said.

Barbier did not make any rulings or decisions on what sanctions he might impose on the lawyers. He did not say when he might do so.