NEW ORLEANS -- A federal judge responded to an investigation into BP claims fraud by asking former FBI Director Louis Freeh to expand his probe of the oil spill claims payment program.
Freeh, who had been appointed as special master for the $9 billion economic damage settlement between BP and private plaintiffs, issued a report to U.S. District Judge Carl Barbier on Friday.
That report found that Lionel “Tiger” Sutton and his wife, Christine Reitano, top attorneys in Claims Administrator Patrick Juneau's office, had conflicts of interest and collected improper fees to expedite claims associated with Sutton’s former employer.
Sutton allegedly expedited claims for Glen Andry and John Lerner. Sutton and Reitano were forced to leave the settlement program, and Freeh recommended that Andry and Lerner’s claims, including an $8 million loss filed by their former law firm, should be disallowed.
Barbier gave the implicated law firms and attorneys 30 days to argue why their own claims shouldn’t be disallowed and why they shouldn’t be banned from representing other claimants.
He also asked Freeh to keep investigating, to look at the overall anti-fraud controls in Juneau's office. Freeh’s report found no evidence of impropriety by Juneau himself or any evidence that Sutton or Reitano improperly affected the valuation of claims, but Freeh acknowledges that such a review was not within the scope of his probe.
The issue, rather, appears to be the flow of claims and whose claims are getting expedited. BP has leveled other allegations of conflicts of interest by attorneys on the claims appeals panel, but the court already found that those attorneys have eliminated those conflicts.