Accessibility/Mobile Features
Skip Navigation
Skip to Content
Editorial News
Business
Classified Sites

The Canadian Press - ONLINE EDITION

Judge won't block new round of BP seafood payments amid fraud allegations against Texas lawyer

NEW ORLEANS - A federal judge refused Wednesday to halt payments from a BP fund to compensate deckhands and other seafood workers harmed financially by the 2010 Gulf oil spill, turning back arguments by the oil giant that the payment process was tainted by a Texas lawyer's alleged fraud.

BP argues the $2.3 billion it agreed to put into the oil spill seafood compensation fund was inflated, based on the belief that attorney Mikal Watts represented more than 40,000 clients.

BP claims that more than half of the Social Security numbers on Watts' client list were fake. Watts' attorney has denied that Watts committed fraud.

More than $1 billion of the fund has been distributed in an initial round of payouts. BP wanted a second round of payments suspended.

However, U.S. District Court Judge Carl Barbier said a suspension was unnecessary. He said the second round, for which no date has been set, is at best months away.

Barbier added that the people Watts claimed to represent were deckhands and other workers who usually worked temporary jobs with little or no documentation of past employment and scant means of proving losses. Such clients would likely not account for a large percentage of the $1 billion-plus left in the fund, he said.

"They were at best the tail wagging the dog. Maybe the flea on the tail wagging the dog," Barbier said.

Barbier did grant a request from Watts' lawyers for a delay in BP's lawsuit against Watts, agreeing to put that matter on hold at least temporarily while a criminal case against Watts unfolds.

Watts' criminal lawyer Robert McDuff has said in court filings that if the BP suit continues while the criminal investigation is underway, he would advise Watts not to testify in depositions regarding the lawsuit. Another attorney for Watts, Gerald Meunier, said in court that Watts expects to know by June whether he will be indicted.

There should be no second-round payments until the fraud allegations against Watts are more fully investigated, BP attorney Kevin Downey said.

Jim Irwin, attorney for the class suing BP and others over the oil spill, said it was BP's duty to investigate whether claims were legitimate.

And people who may be due legitimate payments should not have claims delayed or denied because of allegations against Watts, he said.

"Proper restitution is to go after the people who committed the fraud," Irwin said.

Although BP has publicly raised questions about the validity of some seafood industry claims, the focus of Wednesday's hearing was not on specific fraudulent claims that may have been paid out.

"We are pleased that the court explained that the first round distribution is incomplete and the second round distribution process, including further review by the judge, cannot occur until then," BP spokesman Geoff Morrell said in an email.

  • Rate this Rate This Star Icon
  • This article has not yet been rated.
  • We want you to tell us what you think of our articles. If the story moves you, compels you to act or tells you something you didn’t know, mark it high. If you thought it was well written, do the same. If it doesn’t meet your standards, mark it accordingly.

    You can also register and/or login to the site and join the conversation by leaving a comment.

    Rate it yourself by rolling over the stars and clicking when you reach your desired rating. We want you to tell us what you think of our articles. If the story moves you, compels you to act or tells you something you didn’t know, mark it high.

Sort by: Newest to Oldest | Oldest to Newest | Most Popular 0 Commentscomment icon

You can comment on most stories on brandonsun.com. You can also agree or disagree with other comments. All you need to do is register and/or login and you can join the conversation and give your feedback.

There are no comments at the moment. Be the first to post a comment below.

Post Your Commentcomment icon

Comment
  • You have characters left

The Brandon Sun does not necessarily endorse any of the views posted. Comments are moderated before publication. By submitting your comment, you agree to our Terms and Conditions. New to commenting? Check out our Frequently Asked Questions.

letters

Make text: Larger | Smaller

Brandon Sun Business Directory
Submit a Random Act of Kindness
Why Not Minot?
Welcome to Winnipeg

Social Media

Canadian Mortgage Rates