Los Angeles County’s district attorney has opened an investigation into claims of fraud within the largest sex abuse settlement in U.S. history.
Dist. Atty. Nathan Hochman said Wednesday his office has started a wide-ranging probe into claims that plaintiffs made up stories of abuse in order to sue the county, which agreed to the historic $4-billion sex abuse settlement this spring.
The announcement follows Times investigations that found nine people who said they were paid small amounts of cash by recruiters to sue the county for sex abuse in juvenile halls. Four of them said they fabricated the claims.
“They looked at this opportunity to compensate these true victims of sex abuse as an opportunity to personally profit and engage in some of the most greedy and heinous conduct,” Hochman said at a news conference Wednesday morning in the Hall of Justice downtown. “We are going to aggressively go after them.”
All nine plaintiffs had their cases filed by Downtown LA Law Group, a personal injury firm that represents roughly 2,700 people in the county settlement. The firm has denied wrongdoing. The Times could not reach the recruiters who made the alleged payments to plaintiffs for comment.
Hochman indicated his investigation, still in its early stages, showed this was just a small fraction of the “significant number of fraudsters involved in these settlement claims.”
Hochman emphasized the inquiry would focus on those higher up the chain — lawyers, recruiters and medical practitioners who may have submitted fraudulent forms — and not the plaintiffs.
Many of the people The Times spoke with who filed false claims were poor and in unstable housing. They said they desperately needed the cash promised by recruiters, which ranged from $20 to $200. All were flagged down outside county social services offices, where many were on their way to get food assistance and cash aid.
Hochman said any person who contacted his office about filing a fraudulent claim would not have the statements haunt them in a criminal prosecution.
“If you provide us truthful information, complete information, any of the words that you use will not be used against you,” said Hochman, adding the offer did not extend to attorneys or medical professionals. “It’s not something that we offer lightly to anyone.”
Hochman said Downtown LA Law Group was one of the law firms they were focused on, but the probe was not limited to them. He said the investigation would touch anyone who helped fraudulent cases get filed.
“I’m happy to label that entire group as a group of fraudsters conspiring to defraud a settlement where the money should be going to legitimate sex abuse survivors and victims,” he said.
The law group has denied paying plaintiffs and said it only wants “justice for real victims” of sexual abuse. The firm declined to comment further Wednesday.
Shortly after The Times’ investigation, the county supervisors voted to launch their own inquiry into possible misconduct by “legal representatives” involved in the lawsuits. The county set up a hotline for tips from the public, and moved to ban “predatory solicitation” outside county social services offices.
The supervisors also joined a chorus of voices — including California lawmakers, labor leaders and a powerful attorney trade group — calling for the State Bar to investigate. The State Bar does not comment on potential investigations, but has previously said California law generally prohibits making payments to procure clients, a practice known as capping.
A flood of sex abuse claims followed the passage of AB 218, a state law that gave victims of childhood sexual abuse a new window to sue that stretched far beyond the previous statute of limitations. The law, which went into effect in 2020, has led to thousands of lawsuits filed against California school districts, governments and religious institutions.
This spring, the county agreed to pay $4 billion to resolve thousands of claims from victims who said they were abused decades ago in county-run juvenile detention centers and foster homes. In October, the county agreed to a second settlement worth $828 million over another set of similar claims.
Hochman noted the first settlement would have massive financial ramifications for decades for the county, which acts as a social safety net for the region. The county will pay the settlement out over the next five years and has asked most departments to trim their budgets to help pay for it. The district attorney’s budget, Hochman said, had been slashed by $24 million, in part, to help pay for the cases.
“Every penny that a fraudster gets is a penny taken away from a sex abuse victim that validly and legitimately suffered that abuse at the hands of someone [in] Los Angeles County,” said Hochman. “It is not free money.”
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