State bar probe into Los Angeles lawyers delays final sentencing in scandal over sham lawsuit
A disbarred New York lawyer facing a possible prison sentence is providing 'extraordinary' assistance about corruption 'in the highest places in the public arena.'
A massive California State Bar investigation into powerful attorneys in Los Angeles prompted a judge on Tuesday to delay the final sentencing in a bribery scandal involving a collusive lawsuit, secret deals, sham lawyering and fake adversaries hatched within the City Attorney’s Office.
Disbarred New York lawyer Paul Oliva Paradis won’t be sentenced until Sept. 26 because of his continued cooperation in a probe that state bar counsel told a federal judge on Tuesday is the largest they’ve seen.
U.S. District Judge Stanley Blumenfeld gave Paradis an additional three months of freedom after making clear he’s likely headed to prison, and possibly for longer than the 18 months prosecutors recommend.
“I do recognize, however, that Mr. Paradis’ cooperation is unquestionably, and has been unquestionably, significant,” Blumenfeld said. Blumenfeld also said he recognizes the “importance of rooting out malfeasance in the legal community…especially given the nature of the potential malfeasance here.”
State Bar Trial Counsel Charles Calix and Abrahim Bagheri told Blumenfeld that Paradis gives them unrivaled insight into the document-heavy investigation, and his testimony could help corroborate misconduct charges. They said they expect charges to be announced “against certain individuals” within a few months, but “more discreet” cases are awaiting further documentation and other information.
“This is the largest group by several factors of attorneys who have been accused of misconduct. The amount of documentation is many times multiple how many documents we’re used to seeing,” Calix said, calling the level of Paradis’ cooperation “extraordinary.”
Paradis’ lawyer Dave Scheper said Paradis is helping the California State Bar’s Office of Chief Trial Counsel build cases against lawyers in “the highest places in the public arena.”
“His new life’s work is atoning and sharing and helping the state bar root out corruption around this city,” Scheper said.
Scheper said 18 attorneys are being investigated. Calix said some attorneys have invoked their 5th Amendment right against self-incrimination as they await the closure of the U.S. Attorney’s Office criminal investigation, or the expiration of the statute of limitations for possible alleged crimes.
Blumenfeld pressed state bar counsel about when their work might be complete, telling them he’s “concerned about whether the state bar is moving as expeditiously as possible to reach conclusions and to have the wherewithal to prosecute if that is appropriate in the circumstances.”
“I have been presented with information that raises very serious concerns,” the judge said.
Blumenfeld said he feels specially obligated “to cleaning up, if that is what is appropriate and necessary, the perfidy within the bar, if indeed there is such a perfidy.”
“I am concerned about giving the state bar every opportunity,” the judge said. “I’m willing to exercise a little bit more patience.”
Scheper and his co-counsel Jeffrey Steinfeld of Winston & Straw LLP are calling for Blumenfeld to spare Paradis from prison.
Assistant U.S. Attorneys Jamari Buxton, Mack Jenkins and Susan Har are asking for 18 months, which still is a massive departure from U.S. Sentencing Guidelines: Paradis’ 46-page plea agreement gives him an offense level that carries about 15 1/2 years in prison, though the maximum federal sentence for bribery is 10 years in prison. Blumenfeld said Paradis has been “exceptionally well represented” but “there’s an extremely good chance that the sentence is going to be a custodial sentence.”
Paradis has pleaded guilty to a federal bribery charge related to $2.175 million in kickbacks he accepted through attorney fees in a class action over water rates at the city’s Department of Water and Power. His role in the sprawling scandal put him in secret conflict with his own client: He was suing the city on behalf of a ratepayer when the city hired him to file a separate lawsuit on behalf of the city.
Paradis wrote Blumenfeld a letter detailing his cooperation and calling out city officials. Here’s the beginning:
A U.S. Attorney’s Office press release about Paradis’ plea also laid out an incriminating narrative for not just Paradis, but the Los Angeles City Attorney’s Office, saying the office was aware that Paradis was already representing the ratepayer, but the ratepayer “was unaware that his lawyer, Paradis, also represented his intended adversary.”
At least one senior official in the City Attorney’s Office told Paradis to find a lawyer who could be the face of the ratepayer’s lawsuit but still friendly to the city’s cause, so Paradis found a now-deceased attorney in Cleveland, Ohio, personal injury attorney Jack Landskroner. Paradis cut a deal with Landskroner in which Paradis secretly did most of the work in the case in exchange for 20 percent of Landskroner’s fees.
Landskroner netted $10.3 million in fees from the $67 million settlement, $2.175 million of which he secretly sent to Paradis in accordance with their bribery deal. The money was funneled through shell companies Paradis and Landskroner created specifically for the scheme, according to Paradis’ plea deal. Paradis’ bribery conviction is over that payment.
In addition to accepting a bribe, Paradis also admitted to bribing city officials, including now-imprisoned Department of Water and Power General manager David H. Wright, in exchange for a three-year, $30 million contract for his cyber-services company. The bribes included free legal services, promises of a financial interest in the company, a job with a $1 million annual salary as well as “related perquisites,” according to the plea deal, such as meals, travel and event tickets.
The federal investigation included FBI raids in July 2019 at the office of then-Los Angeles City Attorney Mike Feuer, who’s now a candidate for the U.S. House of Representatives. Feuer has acknowledged he’s under investigation by the state bar.
Paradis was the first person in the scandal to be charged with a crime, striking a deal that prosecutors announced in November 2021. When former senior city attorney Thomas H. Peters’ plea deal was announced in January 2022, Paradis “saw that mr peters was essentially the fall guy” for his supervisors, Scheper said on Tuesday.
“That appalled him,” and he also realized “that the government was in the process of potentially shutting down the investigation that gave rise to 33 search warrants,” Scheper said. That’s when Paradis contacted the state bar.
Since then, Blumenfeld has sentenced Wright, the former DWP manager, to six years in prison for bribery and David F. Alexander, DWP’s former senior cyber official, to four years in prison for lying to the FBI.
Peters, who is married to Los Angeles County Superior Court Judge Elaine Mandel, avoided prison and was instead sentenced by Blumenfeld in May to nine months home confinement and three years of probation.
My friend and former Los Angeles Daily Journal colleague
wrote about Peters’ sentencing. He also wrote about Paradis’ sentencing. He’s been covering the DWP scandal since its inception, so I recommend checking out his website for all the details on this twisted, sprawling scandal. Please consider paying for a subscription just as I hope you’ll do for mine. Journalism for the non-ruling class is looking bleak these days, and we really do need all the help we can get.
Justin reported last year that the follow attorneys are under investigation:
Here’s how Paradis describes Feuer’s involvement in his letter to Blumenfeld:
Meanwhile, attorneys representing DWP have asked for Blumenfeld to order restitution and disgorgement against Paradis totaling of $31.655 million.
Here’s the beginning of the nine-page letter:
Paradis filed a declaration on Friday that says DWP is falsely portraying itself as a victim. It includes this about ex-LADWP Board of Commissioners President Mel Levine, a former U.S. representative and retired partner at Gibson Dunn & Crutcher LLP:
Speaking of Gibson Dunn, Justin has a must-read on the firm’s role in this scandal:
The full documents are below for paid subscribers, including letters of support for Paradis from lawyers in California and New York. Your support makes my work possible. Thank you!