Defense attorney: Texas lawyer indicted over oil spill fraud

AP News
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Posted: Oct 21, 2015 6:05 PM

JACKSON, Miss. (AP) — A Texas lawyer faces criminal charges after he was accused of submitting thousands of false claims for damages from the 2010 Gulf of Mexico oil spill.

Robert McDuff, a lawyer for San Antonio attorney Mikal Watts, confirmed Wednesday that Watts was indicted in Mississippi and will appear in court Oct. 29 in Gulfport.

"I look forward to a speedy trial and the opportunity to prove to a jury that I am not guilty of any crimes," Watts said in a statement.

McDuff said the indictment is sealed and he wouldn't discuss the specific charges against Watts. He said they are related to allegations that Watts committed fraud or forgery when he claimed to represent 44,000 clients in litigation against BP PLC.

McDuff said others have been indicted, but declined to name them.

Federal prosecutors didn't immediately respond to a phone call and an email seeking comment. The indictment was first reported by the San Antonio Express-News.

The British oil giant sued Watts in 2013, alleging that more than half the clients were "phantoms," people whom Watts never properly signed up, people who weren't commercial fishermen or people who were dead. BP said claims officials could verify the Social Security numbers of only 42 percent of Watts' claimants, and even found someone who had never hired Watts included twice.

When BP sued Watts, it said he had filed only 648 compensation claims, and only eight of those had been ruled eligible for payment, with 17 others then pending.

McDuff said Watts believed the names and information he had been given were "real people who had suffered real injuries."

"Although it later turned out that Mr. Watts had been provided with inaccurate information, and that some of these people had never authorized him to represent them, Mr. Watts was not aware of that when he filed these lawsuits against BP in order to protect the interests of the fishermen of the Gulf," McDuff said.

BP said the large pool of clients caused it to offer an inflated $2.3 billion to pay off commercial fishing claims. It tried to persuade U.S. District Judge Carl Barbier in New Orleans to suspend payments from that fund after $1 billion was disbursed in a first round of settlements. Barbier refused, saying the questionable claims would be owed a small percentage of the remaining money. Other lawyers have said that BP should pursue fraud claims rather than stop payments.

Watts won a seat on the committee of lawyers who negotiated the multibillion-dollar settlement with BP in 2012, a group in line to reap more than $1 billion in payments. Watts resigned from the steering committee last year amid the federal investigation.

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