Feds charge 7 with $2 billion fraud tied to Deepwater Horizon spill
Federal prosecutors are accusing seven individuals of conspiring to fraudulently charge more than $2 billion to a program set up to help people affected by the 2010 Deepwater Horizon oil spill.
In an indictment unsealed Thursday, the Department of Justice alleged that the defendants submitted false claims on behalf of 40,000 individuals in Alabama, Louisiana, Mississippi and other Gulf states without their consent. The agency also said the defendants stole victims' identities, using their names, addresses, Social Security numbers and other personal information to create phony legal clients for litigation against BP stemming from the spill.
"The defendants in this case are accused of exploiting a disaster relief program set up to help those who were injured or suffered an economic loss as a result of the BP Oil spill -- the worst environmental disaster in American history," Gregory Davis, U.S. Attorney for the Southern District of Mississippi, said in a statement. 'The indictment alleges that the defendants carried out mail and wire fraud schemes using stolen identities of coastal residents in order to enrich themselves."
The seven individuals -- Mikal C. Watts, 48, David Watts, 50, and Wynter Lee, 37, of San Antonio, Texas; Gregory P. Warrena, 51, of Lafayette, Louisiana; Hector Eloy Guerra, 48, of Harlingen, Texas; Thi Houng Le, 48, of Pascagoula, Mississippi; and Thi Hoaug Nguyen, 30, of Grand Bay, Alabama, were indicted on September 15 by a federal grand jury on multiple counts of conspiracy, mail and wire fraud, identity theft, and other charges, the Justice Department said.
Watts, an attorney, is accused of submitting false claims to BP on behalf of plaintiffs he claimed to represent. He was scheduled to appear in court Thursday on federal criminal charges, his lawyer said. The other defendants were also expected to appear.
"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 statement last week.
Watts' attorney, Robert McDuff, said he could not discuss specific charges, but they're related to allegations that Watts committed fraud or forgery when he claimed to represent 44,500 commercial fishing boat deckhands who were suing BP.
Watts and his law firm were sued in 2013 by the British oil giant. BP alleged that Watts and his law firm engaged in "brazen fraud."
The 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.
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.
Florida, Alabama, Mississippi, Louisiana and Texas in July reached an $18.7 billion settlement with BP over the deadly spill. The April 20, 2010, rig blast killed 11 workers and sent millions of barrels of oil gushing into the Gulf of Mexico for nearly three months on to the shorelines of several states.