DHECC - Lionel Sutton Interview Part 3 - recipe for a zombie

In the third installment of the Lionel Sutton interview series, I’m going to focus on the investigation conducted by Special Master Louis Freeh which led to Sutton, his wife Christine Reitano, and the Andry Lerner Law Firm being accused of various criminal activity.   Specifically, we will examine how, in Reitano’s case, these allegations led to termination from the Claims Office.

Fraud    ...       

Before we get into the nuances of the "Freeh Style" investigation techniques, I want to show you a particular sound byte regarding fraudulent seafood claims.

Folks have criticized me for “burying the lead” in past posts, and I think they have a damn good point so let’s kick this post off with a bang:

Lionel Sutton - 15 - Page 60 - 2.mov from Jason Berry on Vimeo.

A disclaimer:  Lionel qualified this statement by saying he was not absolutely sure that this particular instance of fraud is what Louis Freeh was referring to on page 60 of his first report.  The only person who knows that, for sure, is Louis Freeh.  Unfortunately, it appears Freeh lost the scent and we may never know what firm he was talking about.  

Good news is it doesn’t matter.  Fraud has been alleged....now we all know.

Let me restate this revelation ….A plaintiff steering committee firm filed FRAUDULENT seafood claims....multiple.  After it was discovered by employees in the Claims Office it was brought to the attention of the Claims Administrator, Pat Juneau. 

According to Sutton, Pat simply told the firm not to do it again...a mere slap on the hand.  

This epiphany begs the question, "Were the fraudulent claims paid out even after it was brought to the attention of the Claims Administrator?" 

Unfortunately, we have no way of knowing that unless Juneau addresses the matter, publicly.  

Chew on this whole thing for a second....then let's take a look at the issues Freeh's first report addressed.

Lying liars who lie?

I think it's preposterous to assume Louis Freeh isn't aware of this PSC firm's fraudulent seafood claims.  And I can’t imagine Judge Barbier doesn’t know about it considering Sutton wrote it down in a memo of opposition his attorney filed with the Court. 

Understand this.....these falsified claims by the PSC firm are ILLEGAL.  

Please consider the gravitas here….a PSC firm used their knowledge of the claims process to manipulate and file false seafood claims.  This wasn't a simple scam to milk BP, it is detrimental to the other class seafood claimants.

Lionel explains why in this byte:  

Lionel Sutton - 14 - Page 60 - 1.mov from Jason Berry on Vimeo.

If this allegation is true.....Juneau is absolutely complicit in a cover up.  Freeh is complicit if he doesn’t act against the firm.  Judge Barbier is complicit if he doesn’t demand that Louis Freeh make the allegations public and suggest criminal charges be brought against the firm in the same way Freeh did to Sutton and Reitano.

A disclaimer...

I know who the alleged firm is…at least the one Sutton is referring to in these sound bytes.  But that doesn't mean it's the same firm Freeh was referring to on page 60. 

I also know how the seafood claims were manipulated, in fact I expounded on it in this post.

I plan on revealing who this PSC firm is soon but I want to validate the story through one more source (the 4th) and I want to give the firm an opportunity to respond to the allegations.  I also have a standing request to interview Pat Juneau that has yet to be acknowledged.

Justice isn't Freeh

The real question mark that arises from this revelation is why would Freeh be protecting the PSC firm?  Why would Judge Barbier allow it?  Most importantly, was Louis Freeh really brought into the picture to actually conduct an unbiased investigation? 

Finally…has Freeh even come close to conducting an unbiased investigation?

The litmus test for those questions lies with Freeh’s charges against Christine Reitano more so than Lionel Sutton.  Sutton explains the allegations Freeh brought against Reitano in this byte, also, he talks about the evidence Freeh accrued to make the charges:

Lionel Sutton - -8 -Chrisitne and Mancuso.mov from Jason Berry on Vimeo.

To recap here, Freeh claimed Reitano knew her husband,  Lionel Sutton, was getting the referral fee on the Thonn claim and she then lied to his investigators about it under oath.  

Lionel states in this byte that Christine absolutely did not know about the referral fee because he never told her.

I know it's difficult to digest but if there's one thing I've learned from writing this blog, never assume a wife knows what a husband is doing...and vice-versa.  I can quote you  three husband/wife scenarios I've written about on this blog where this fact holds true....Bennett, Ellis, St. Pierre...Meffert.  OK, that's four....number five is forever grateful I stopped at four.  

                                                                               

Freeh also stated that Reitano was using her position at the Claims Office to negotiate a larger referral fee for Sutton with the Andry Lerner firm.  His basis for this statement was a phone conversation Reitano had with Andry Lerner attorney,  Christine Mancuso. 

Reitano vehemently denied this allegation after Freeh released his report.  In fact, even Mancuso denied the allegation Freeh made against Reitano.  

Here Sutton discusses how Freeh obtained the evidence to levy his allegations:

Lionel Sutton - 9 - Freeh no deposition, acct false accusation.mov from Jason Berry on Vimeo.

No actual affidavits or depositions were taken by the Freeh group in their investigation with the exception of Pat Juneau, Lionel Sutton and Christine Reitano.  Instead, the investigators "interpreted" the witnesses’ testimony.  

Now,  two of these witnesses have come forward to contradict the allegations made in the Freeh report.

Purgatory 

What’s more, Judge Barbier has denied the accused parties' request for discovery, including their ability to take their own depositions with the key witnesses:

Lionel Sutton - 11 - Not allowed discovery.mov from Jason Berry on Vimeo.

Not only has the Court denied the accused the right to discovery and due process, Barbier had Christine Reitano’s "breach of contract" lawsuit against the Claims Office (and BP) removed from civil court and into his own court.

There, it lies in limbo:

Lionel Sutton - 16 - Reitano issues and MDL.mov from Jason Berry on Vimeo.

Why would Barbier deny Reitano her civil rights and bury this case?  I humbly ask, "Does that constitute obstruction of justice?" 

They are being denied the right to face their accuser and question witnesses in order to argue their innocence.  How is that legal?  

A zombie?

In the next segment, I'll address impetus. Most notably why both Freeh and Judge Barbier seem intent on protecting the PSC firm that filed the fraudulent claims .  Also, why the Judge is denying Andry Lerner, Sutton…and most importantly, Reitano…due process.  

--> hounds kuzimu uchaguzi wako

DHECC - for 3 mill a month you'd think The Freeh Group could buy a calculator

Alright, my AZ power rangers have tabulated the numbers and it's not pretty.

Freeh is claiming that Thonn got $357,002.35 including the accounting reimbursement.  So according to Freeh that number was deposited in the Andry Lerner trust account.  Here's (what we think) is the breakdown:

Total Award - $357,002.35

Of that Andry Lerner would have taken a 20% fee - $71,400.40

The Coastal Claims Group would have received -  $20,182.00

That would put Thonn's net @ - $265,419.95

So the total fee for Andry Lerner (50/50 split with Sutton) would be -  $35,700.20

The total referral fee for Lionel Sutton would be -  $35,700.20

Ok...now in Freeh's motion here is what he is seeking from each of the four entities:

Thonn:  $357,002.35
Coastal Claims Group:  $20,182.00
Lionel Sutton:  $35,700.20
Andry Lerner:  $35,700.20 (not 100% sure about that number)

That would put the total amount Freeh is trying to claw back at:  $448,584.75

IF...if...these numbers are correct, Freeh is trying to pull back about $91,000 more than BP actually paid out on the claim.

WTF?  That's the first claim he's clawed back and he overshot the amount by $91,000?  If this is right you have to ask whether or not the guy even understands the breakdown on individual claims and how the referrals are paid.  It actually makes me wonder if these clawbacks aren't being orchestrated under a commission basis...that's just me speculating but if he's overshot the claw back by 91k right out of the gate, this a pretty big deal.

The only thing I can think of is that the claim BP paid was actually $448k and perhaps Andry Lerner took out an extra $91k on the commission which would put their total commission amount at $126,700.20.  That's about 35 1/2 % commission if that's what happened.  I don't think that's legal and I can't imagine Andry Lerner would be that stupid unless the client agreed to it.

I'm not sure what's going on here but I hope some folks smarter than I can chirp in on the comment section.  

DHECC: Tits and ass, corporate espionage, white-collar mercenaries...the truth is in there somewhere

Almost every day there seems to be a new development in the BP claims process and the going-ons at the DHECC.  Last week, the AP ran a story stating that DHECC executives Bob Odom and Kirk Fisher had resigned amidst nebulous charges of having gone to a local strip club that had also filed an economic loss claim with the claims office.

On a local level, The Advocate followed up the AP story with their own reporting (thank you Advocate):

BP changing stance on claims payments puzzles experts

And while the headline is a topic of conversation all to itself (read this article by Tom Young only after you finish mine, of course : ) ), in this post I want to focus on The Advocate's commentary about the strip club "allegations" and what all this hullabaloo with Odom and Fisher may actually be about:

Without naming them, the ad said that two key administrators at the program recently left amid reports they went to a strip club that had received $550,000 from the claims facility.  The facility's former chief operating officer, Kurt Fisher, has disputed those claims, saying he and former CEO David Odom left to pursue "other opportunities".

As I stated in my previous post, it's a pregnant paragraph because it doesn't really say what Odom or Fisher did wrong other than go to a strip club that received a claim.  There is no substantive allegation here.  I'm sure they probably went to a lot of businesses that received claims or had claims queued so I don't understand what the big deal is.

I guess BP is trying to make hay that they are guilty of being horndogs by visiting the strip club but that has nothing to do with their responsibility as employees of the claims office.  I believe this whole thing was drummed up by the BP PR machine because it's sexy...literally...and they knew the Mindless Stream Media cycle would run with it.

However, I believe there is a lot more going on just beneath the surface, under the sensationalist headlines, and I've spoken with a lot of confidential sources in the past week to get a better picture of what may have been going on with these two guys, Odom and Fisher.

The domino effect  

Let's start with the basis for any investigation....motive, means, and opportunity.

What is BP's motive?  I believe their overall goal is to bring down the DHECC completely.  I know that may seem obvious to you but I've been in the dark for a while as to whether or not they actually want to collapse the settlement or if they want to keep it in place and simply gain control of the claims office from within.  Well, I think they now do have control of the office from within but I also think they still want to collapse the settlement.  I am speculating here but this is a rather educated guess.

With that goal in mind, how could BP collapse the settlement?  I think they want to cut Pat Juneau's head off.  I think they see Juneau as the universal joint in the DHECC framework and if they can manage to pull that joint out, the whole machine will come unraveled.  This BP strategy was parroted obediently by James Varney a month ago in his editorial.  If Juneau, himself, were to be disgraced it would possibly taint the entire office...possibly.

What about the opportunity?  The opportunity lies in picking off the underlings...first Sutton and Reitano, now Odom and Fisher.  Louis Freeh is providing the opportunities and he kicked it off by offering up Sutton and Reitano on a silver platter in his first report.  BP immediately ran that through the MSM organ grinder across every newspaper from here to London with the Wall Street monkey boys dancing on cue....singing, "Good ol' boys!" and "Kitchen table accounting".

The monkeys howl

Now, in the wake of strippergate, Bloomberg's Paul Barrett is playing color commentator on the "scandal":

"Even for New Orleans, a town with an expansive conception of entertainment and a generous sense of humor, that's a scandal."     

Ummm...no.  Not so much....in fact....not at all.  There isn't even an allegation for there to be a scandal.  Perhaps someone should adjust Paul's Nawlins Scandal Barometer hanging in his office in Manhattan.  A scandal in this town would be more along the lines of a city official fucking strippers on a yacht bought with city funds....that's a New Orleans' scandal.

But, if he and Bloomberg want a scandal I've got one fo' true.  I would suggest they look into the sudden expansion in claims office contracting that Louis Freeh's companies, The Freeh Group and Pepper Hamilton, have been awarded over the past 8 months.  Then I would check their expense account.  With over 40 employees now staying in the Roosevelt, the Ritz Carlton, and the Marriott, dining at Galatoire's, Emeril's (oh the irony)...the finest restaurants in the city, and possibly even entertaining their own "guests" at houses of less-than-sterling repute (oh double the irony).  I'm betting that expense account is pretty nasty right about now...but I know more than one service industry employee who's enjoying the high times pouring out of the claims office.

Also, perhaps they should look into the allegations the Andry firm made about the connections and former business associations between Pepper Hamilton and BP's current law firm, Kirkland and Ellis.

I digress...that's a post for a later date.  Let's just say that the paragraphs immediately above are even more pregnant than the one in The Advocate story.

I do want to point out one more item, though.  In this article Barrett boasts:

"Back in July, I warned that Freeh’s investigation “could reveal major legal funny business in the Big Easy.” That prediction was based on earlier reporting I had done for a Bloomberg Businessweek cover story on the creative recovery theories that plaintiffs’ lawyers were using to get their mitts on BP cash. Expect more such revelations in the new year."

He's not the one who originally reported that, not even close.

Is this really about T&A?  

Back to the story at hand...strip clubs.  Here's what I've been able to piece together about the actual strip club event...Odom, Fisher, possibly David Duval and some of the claims office employees went to a strip club after an office Christmas party (probably 2012) that was being held at a Dickie Brennan restaurant...either the Bourbon House or the Palace Cafe. I used to bartend at Palace and I would highly recommend either venue...the food is incredible.

That's it....no shit.

No one was snorting coke off buttcheeks, no one expensed anything to the claims office, no one took the strippers to a private yacht and dirtied down (as far as I know).  They just went to a strip club...that's all.  I am pretty sure it was either Rick's or the Penthouse Club on Bourbon.

Scandalous huh?  WTF...that captures international headlines?  That's what Barrett is claiming is scandalous even by New Orleanian standards?  Barrett's obviously never been to New Orleans...dude needs to get out more.

This strip club did file a claim and receive payment but I'm pretty sure Dickie Brennan did as well for his restaurants.  I would bet the hotels the Freeh Group and Pepper Hamilton are currently patronizing filed claims as well.  I am almost certain the restaurants Freeh Group employees are currently frequenting have filed claims.  John Georges owns Galatiore's...maybe The Advocate could fill us in on whether or not that restaurant filed a BP claim.

So...here's the twist....I don't think Odom and Fisher's departure has much to do with the strip club visit.  I think that was simply thrown out as a tabloid-headline-grabbing attempt to defame these men. But that's not to say they're squeaky clean.

I know that Odom had a French Quarter apartment that was being expensed to the claims office to the tune of about $3000/month and I have been sent some allegations through email that suggest Odom and Fisher may have ancillary business connections to the owners of the strip club they visited but this is still unsubstantiated.

According to the allegations by the AZ reader, if the strip club is the one I think it is, the owners of this club have multiple sex industry businesses including an adult video franchise, a porno production company and an escort service.  Another source has suggested to me that the Quarter apartment was being used as a shag pad to patronize the ladies from the aforementioned business's escort service.

I don't buy that allegation right now but let's pretend it's true....there is still no proven quid pro quo in respect to Odom or Fisher's role in the claims office.  Once again, even if this is true, there is no crime committed unless the shagging was being expensed to the claims office or if Odom or Fisher participated in increasing the strip club owner's claim and/or expedited the claim for "favors".

So...let's put the strippers and escorts to bed...metaphorically.  Just get the sexy shit out of your head for a minute because there is an entirely separate issue with Odom and Fisher that needs to be addressed.

Self dealing and free wheeling  

As AZ commenter Kevin has noted, Odom came to the claims process from The Shaw Group.  There has been a lot of speculation as to how Odom landed his job with the claims office but there is even more speculation as to how he contracted employees and bought office equipment once he was in the office.

Enter a Baton Rouge businessman named Michael Olinde and a company called Alpha Consulting:

  
Olinde is reported to be a business associate of Odom and Fisher previous to their tenure at the claims office.  Odom gave Alpha the contract to staff the claims office when it opened.  The staffing company hired mostly accountants to review claims.  As AZ commenter Kevin has continually pointed out on the blog, most of these employees were hired directly from LSU where Fisher teaches...essentially these LSU students were hired right out of college. There is a question as to whether or not the employees were being hired under the assumption that they were actual CPA's but I haven't been able to mesh that issue out yet.

The real issue is whether or not Fisher and Odom have any financial interest in Alpha Consulting.  If so, they essentially used their position in the claims office to sub-contract their own company...they're self dealing.  BUT...BUT....keep in mind that the DHECC is not a public entity.  They are not required to issue RFP/RFQ's or even advertise the positions that Alpha filled as long as the claims administrator approved the sub-contracting and hiring scenario.

Does it stink?  Yes...it smells like ass.  But it isn't necessarily a legal or ethical breach as long as it doesn't conflict with the terms of the DHECC and as long as it was approved by the claims admin., Juneau.

To be clear, I don't know if Fisher and Odom had any financial interest in Alpha but I do know they had previous connections with Olinde.

Now there's also another issue with Odom.  He has a company, Plexos, that he may have been using to expense office needs and other items per a Plexos credit card:

What's more, there is also a "Plexos, International" Llc. that is listed in the LA Sec. of State database registered to Bob Levine, the CFO of the DHECC, but seems to be inactive:

 

I put a request in to the DHECC over a month ago to interview Odom regarding an allegation that he and Levine expensed a trip to NYC in 2012 where they accepted an offer by the Garden City Group (GCG), a DHECC court vendor, to hang out in the company's skybox at Giants stadium for the Saints/Giants game.  The reason this is an issue is that the invitation was extended to multiple people within the claims office but Juneau told all the employees that it was unethical and he prohibited anyone from taking GCG up on the offer.  Christine Reitano recently included this invitation as an exhibit in a court filing:



This issue is very important because it establishes that Juneau was exercising some level of protocol in the office as to what was ethical and what wasn't.  Remember that Reitano was accused of unethical behavior by Freeh such as trying to secure a job for her husband, Lionel Sutton, with the Garden City Group.  But Reitano maintains that everything she did was disclosed to Juneau and on this matter he told her it wasn't kosher so she dropped it.

It appears that Odom and Levine, on the other hand, did not drop the matter of the invitation to Giants Stadium by the Garden City Group even after they were told it was unethical.  One reason this issue is important to me is because there is another angle with Odom and Fisher that involves their cozy relationship with the Garden City Group and their hostility towards another court vendor for the DHECC, Brown and Greer.

At this point you may want to read this post and watch my video explaining the roles of the four main court vendors for the DHECC:  American Zombie: A DHECC road map

Pirates of the Silicon Swamp?

The entire time Odom and Fisher were working in the claims office they were in the process of forming another company with the Carrolton Technology Group's Managing Partner, Chris Reade.  AZ readers may recall Reade as the guy who the Louisiana Technology Council tapped to try and retrieve the emails Mayor Nagin "lost" after a public records request was submitted by the TP.

Let me stress that I'm not suggesting there was anything wrong with Odom and Fisher's business venture with Reade, The Crescent City Group.  I think their goal was to create a local technology company in the framework of Brown and Greer that handles MDL and class action cases.  I know Chris Reade and I've found him to be more than competent and a damn fine gentleman....I am not suggesting any impropriety on his part.

The real issue is to what length Odom and Fisher went to fleece Brown and Greer of proprietary technology to create their own Crescent City Group claims processing company.  I know from multiple sources that B & G had a hostile relationship with Odom whereas the Garden City Group seemed to have a rather chummy one.  I bring this up because I think the next Freeh report may focus on this matter and whether or not Odom acted unethically in his desire to build the Crescent City Group up as a national technology company that handles MDL and class action claims.

Goin' all NSA on 'em

Another issue I want to bring up with Odom is what role, if any, he played in exposing the Thonn claim to Louis Freeh.

Lionel Sutton recently stated in a legal filing that he had informed Patrick Juneau of the Thonn claim when he was originally hired.  Sutton even claims he told Juneau that he referred the claim to the Andry Law firm for a fee well before it became an issue around January of 2012.  This admission seems to matter not in the Freeh investigation.  The "smoking gun" Freeh used to accuse Sutton of impropriety was Sutton's own emails...but not from his office account....from his personal email account.

The question is how did Freeh get Sutton's private email database to begin with.  Did Odom play any role?  Obviously the emails coming into the office were privy to Special Master Freeh but Sutton's personal email database was not.

In fact, in his report, Freeh cited Sutton's personal emails from seven months before Sutton even started working at the claims office.

How did he get Sutton's personal email database?  Was it obtained legally?  Was Sutton's password hacked by someone in the claims office?  If the emails were obtained illegally, would that constitute an obstruction of justice?  All pertinent questions.

Is The Freeh Group a white collar Blackwater?  

One thing I want AZ readers to keep in mind when they read the next Freeh report, is that I believe the first one was incredibly irresponsible and in some aspects downright inaccurate.  Unfortunately, the people who were accused in the first report, namely Reitano, have not been afforded the due process of law in order to challenge Special Master Freeh's allegations.  It appears Judge Barbier is allowing this guy to run (forgive me) freely through this investigation without any system of checks and balances or any opportunity for recourse by those he accuses.  The whole investigation is essentially operating above the law and by the looks of it Freeh has parlayed his carte blanche status into one hell of an expanding, lucrative contract with the DHECC.

I believe Freeh is reckless, shoddy and self-serving.  He doesn't care who he leaves in his wake as long as he offers up the goods and I believe he will go to any extent to do that.  The court has created a situation where there is an enormous personal financial incentive for Freeh to prosecute people, this scenario should not exist in the U.S. justice system.

Keep in mind Louis Freeh is not a federal agent any longer, he has no authority to act as one yet I believe he and his employees are doing just that. It would actually be better for the accused if this was a federal investigation because they could at least have some level of recourse and due process.

I would go so far as to say Freeh, Greg Paw and their minions are now running the claims office.  I would love to see what the Freeh Group and Pepper Hamilton are now billing the DHECC monthly on top of their expense reports....I'm betting it's millions.

I think what we're seeing here with the Freeh Group is the birth of a new type of hybrid private/public enforcement agency much like what Blackwater created for mercenary warfare and public/private security only Freeh is tapping the corporate, white-collar world.  That scares the hell out of me.

W'yat Z?

I have no doubt that fraud has occurred in the claims office and the DHECC.  I've been the one beating that drum harder than anyone....but I think Freeh may be as bad or worse than those he's accusing.

I also want to know why the fucking page 60 law firm in Freeh's first report...a PSC firm....hasn't been named.  Riddle me that.  Is he selectively prosecuting people?

The other day someone asked me, "Whose side are you on?  BP? Freeh? The trial attorneys?  The claims office?  I can't tell whose side you're on, man."  The answer is...the truth.  They're all assholes in my book but my main concern is with truth....because apparently most of our MSM resources aren't so concerned about it.