GULFPORT, Miss. (AP) — A Texas lawyer, his brother and a second employee of his law firm are among seven people accused of faking more than 40,000 damage claims after the BP oil spill in 2010, federal prosecutors said Thursday.
Other attorneys paid Mikal Watts’ law firm nearly $11 million for shares in his “seafood docket” of claims brought by deckhands on commercial fishing boats, according to the 95-count indictment unsealed Thursday in Gulfport, Mississippi.
The charges of conspiracy, mail and wire fraud, identity theft and aggravated identity theft involve 41 alleged victims, U.S. Attorney Gregory Davis said. He asked anyone else who believed Watts’ law firm claimed falsely to represent them to call a toll-free fraud hotline.
Davis said the federal investigation began in 2011, two years before BP PLC sued Watts and his San Antonio law firm, accusing them of “brazen fraud.”
Watts and his employees are innocent, defense attorney Robert McDuff said.
“Obviously, fraud was committed somewhere down the line by others. But, as the evidence at trial will show, there was no fraud on the part of Mikal Watts or the people who work in his office,” he wrote in a statement.
Other defendants are David Watts; employee Wynter Lee; Hector Eloy Guerra of Westlaco, Texas; Gregory Warren of Lafayette, Louisiana; Thi Houng Le of Pascagoula, Mississippi; and Le’s sister-in-law, Thi Hoang Nguyen.
Warren and Le owned K&G Consulting LLC in Pascagoula, Mississippi, according to the indictment.
Other defendants could not immediately be reached for comment. All were scheduled for arraignment later Thursday, and the federal court’s electronic filing system did not list defense attorneys.
BP’s lawsuit claimed that more than half of Watts’ clients were not commercial fishermen, were never properly signed up or were dead. BP said claims officials could verify the Social Security numbers of only 42 percent of Watts’ claimants, and one person who had never hired Watts was listed twice.
Watts filed 648 compensation claims, with eight ruled eligible for payment and 17 others then pending, according to the lawsuit.
“More than 98 percent of the Watts claimants never even filed a claim with the Seafood Compensation Program, while 96 percent of the claims that he did file have been denied,” BP attorneys wrote.
According to the indictment, one Texas attorney paid $3.1 million to share the seafood litigation, and another paid $7.8 million. It identified them only as attorneys No. 1 and 2.
The alleged victims were identified only by number and home towns in Louisiana, Mississippi, Florida, Alabama and Texas.
McDuff said Watts believed that he had legitimate clients but was given inaccurate information.
A judge put the lawsuit on hold while the criminal investigation unfolded.
BP said Watts’ inflated client list made the company inflate its $2.3 billion settlement to pay commercial fishing claims. After the first $1 billion was paid, BP asked U.S. District Judge Carl Barbier in New Orleans to suspend payments from the fund. The judge refused, saying the questionable claims comprised a small percentage of the remaining money. Other lawyers said BP should pursue fraud claims rather than stop payments.
BP also said Watts’ claims to represent tens of thousands of deckhands got him a seat on the committee of lawyers who negotiated the multibillion-dollar settlement with BP in 2012. Watts resigned from the steering committee during the federal investigation.