The State Bar of California has opened an investigation into a prominent Los Angeles law firm that represented thousands of sexual assault victims in a record $4 billion settlement, according to court filings made public Wednesday.
The investigation into Downtown LA Law Group, which is also the subject of a criminal investigation into allegations that plaintiffs were paid to file lawsuits, was detailed in a 20th court motion filed by LA County attorneys. The county agreed this spring to a historic settlement to settle thousands of claims of sexual abuse in juvenile halls and foster homes.
A recent district court decision asks Superior Court Judge Lawrence Riff for permission to provide the District Bar with confidential lawsuit documents related to sexual assault clients represented by the Downtown LA Law Group, or DTLA. The district said the State Bar subpoenaed the documents as part of an ongoing investigation into the company.
The district included the Times series investigation as exhibits, citing reporting obtained by nine clients represented by the firm who said they were paid by employers to sue the county. Four said they were told to respond to their abuse claims. The company has denied any wrongdoing and said it “has never engaged in, and has never allowed, currency exchanges to retain customers.”
DTLA did not directly address the inquiry as to whether it plans to fight the request.
“We cannot comment on matters pending in court,” the company said. “As we cooperate with the Bar, we take whatever steps are necessary to protect the legal privacy rights of sexual harassment plaintiffs.”
The motion calls for a Feb. 26 hearing on arguments to allow the State Bar to review the DTLA filing.
“I LA Times “The State Bar cannot fulfill its duty to protect the public if it cannot obtain all the materials necessary to conduct a thorough investigation of these allegations, especially when the allegations involve organized fraudulent practices by licensed attorneys.”
The State Bar sent a subpoena on Nov. 4, requesting thousands of documents related to approximately 2,700 sexual assault victims represented by DTLA, according to an announcement from Alex Binder, an attorney who works with the State Bar’s investigative division. This company represents about a quarter of the total victims in this area.
The bar asked for three sets of documents – lawsuits, detailed descriptions of the abuse and certificates from mental health professionals, which are required for older victims under state law.
The district reversed the charges but said some documents were included in the protective order.
“The County is misplaced,” the motion said. “It holds confidential material that the State Bar wants to investigate serious allegations of attorney misconduct, but cannot disclose.”
State lawmakers and the lawyers’ trade group first called bar for investigation in October, after The Times published its first investigation into possible fraud in the settlement of the estate.
The State Bar declined to comment on whether it would investigate the claims at the time, but noted, in general, that California law prohibits attorneys from paying, or causing others to pay, to solicit clients.
According to the motion, the bar is looking into allegations raised by the Times that DTLA “may have engaged in fraudulent and illegal practices” representing sex offender clients, “including the potential abuse of third-party contractors, misleading filings, and conduct that may create moral turpitude.”
“If true, these allegations would undermine the legitimacy of thousands of claims and distort an agreement intended to compensate survivors of child sexual abuse,” the motion said.
Payments to victims of sexual assault in the settlement are expected to range from $150,000 to $3 million. Payments were expected to begin in January, but have been delayed in part because of the new processing of DTLA’s caseload. The district appointed ua the judge to conduct an additional level of due diligence on the company, which must be completed before any money goes out the door.
In a letter sent to customers last week, DTLA said it was told in a recent court filing that the delay was due to “a greater than expected potential for false claims” among more than 10,000 claimants. The letter reminded customers that false claims could be flagged for “possible prosecution” and said they could withdraw their case at any time.
The State Bar investigation comes as the LA County district attorney’s office continues its investigation into the company as part of a larger investigation into fraud within the sexual harassment case.
The district. He said. Nathan Hochman announced in November, following a report by The Times, that it had launched an investigation into allegations that the complainants were making up stories of abuse. One of the people who told The Times they were paid to make false claims said a senior investigator in the office left a family member’s business card in December.
The district attorney’s office said Wednesday that the investigation is ongoing, but declined to comment further.
