State Bar Investigates Prominent LA Law Firm Amid Fraud Allegations in $4 Billion Sex Abuse Settlement
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The State Bar of California has launched an investigation into Downtown LA Law Group (DTLA), a firm representing thousands of survivors in a landmark $4 billion settlement with Los Angeles County, following allegations of fraudulent practices. The probe, revealed in court filings made public on Wednesday, comes as a parallel criminal investigation examines claims that plaintiffs were incentivized to file lawsuits.
County Seeks Access to Confidential Case Files
Los Angeles County is requesting permission from Superior Court Judge Lawrence Riff to share confidential case documents with the State Bar. A motion filed on January 20 details the bar’s subpoena for records related to sex abuse clients represented by DTLA. The county, which reached a historic agreement this spring to resolve thousands of claims of abuse occurring within juvenile halls and foster homes, asserts that the State Bar requires these materials to conduct a thorough investigation.
Allegations of Payments for Lawsuits Surface
The county’s motion references investigations by The Los Angeles Times that uncovered accounts from nine clients of DTLA who allege they were compensated by recruiters to pursue legal action against the county. Disturbingly, four of these individuals stated they were explicitly instructed to fabricate details of their alleged abuse. DTLA has vehemently denied any wrongdoing, stating it “categorically does not engage in, nor has it ever condoned, the exchange of money for client retention.”
The firm declined to comment directly on whether it intends to contest the county’s request to release the confidential documents, stating, “We are unable to comment on matters pending before the court,” but affirmed its cooperation with the State Bar while simultaneously prioritizing the privacy rights of its clients.
Concerns Over Systemic Fraud
According to the county’s filing, “The LA Times articles raise serious allegations of fraudulent and unlawful practices by attorneys that pose a risk of harm to the public.” The motion emphasizes that the State Bar’s ability to protect the public hinges on access to all necessary information, particularly given the potential for “systemic fraudulent practices” by licensed attorneys.
The State Bar initially served a subpoena to the county on November 4, seeking thousands of documents pertaining to approximately 2,700 sex abuse victims represented by DTLA – nearly a quarter of all plaintiffs in the settlement. The requested materials included lawsuits, detailed accounts of the alleged abuse, and certificates from mental health professionals, a requirement for older victims under California law. While the county has provided the lawsuits, it maintains that other documents are protected by a confidentiality order.
Investigation Triggered by Media Reports
The call for a State Bar investigation initially came from state lawmakers and an attorney trade group in October, following the publication of The Times’ initial reporting on potential fraud within the settlement. The State Bar initially declined to comment on whether it would investigate, but reiterated that California law prohibits payments to solicit clients.
The current investigation is focused on allegations that DTLA “may have engaged in fraudulent and unlawful practices,” including the potential misuse of third-party recruiters, the filing of misleading documents, and conduct that could be considered “moral turpitude.” Officials fear that, if substantiated, these allegations could jeopardize the integrity of thousands of claims and distort the intended purpose of the settlement – to compensate genuine survivors of childhood sexual abuse.
Settlement Payments Delayed Amid Scrutiny
Payments to sex abuse victims, initially anticipated to begin in January, have been delayed due to increased scrutiny of DTLA’s caseload. The county has appointed a judge to conduct an additional layer of vetting for the firm’s cases before any funds are disbursed.
In a recent communication to clients, DTLA acknowledged that delays were partially attributed to “a higher-than-expected false claim potential” among the more than 10,000 plaintiffs involved in the litigation. The firm reminded clients that knowingly submitting false claims could lead to “potential criminal prosecution” and offered them the option to withdraw their lawsuits.
Parallel Criminal Probe Underway
The State Bar’s investigation is running concurrently with a criminal probe led by the Los Angeles County District Attorney’s office. District Attorney Nathan Hochman announced the investigation in November, prompted by The Times’ reporting, into claims that plaintiffs fabricated stories of abuse. A representative from the District Attorney’s office confirmed on Wednesday that the investigation remains ongoing, but declined to provide further details. One individual who admitted to being paid to fabricate a claim reported being contacted by a senior investigator from the office in December.
The unfolding investigations cast a shadow over a settlement intended to provide redress for horrific abuse, raising critical questions about the integrity of the legal process and the pursuit of justice for survivors.
