LA DA seeks halt to $4B abuse settlement payments

Los Angeles County District Attorney Nathan Hochman has asked a judge to temporarily halt payments from a $4 billion settlement resolving thousands of child sexual abuse claims against the county, arguing that 81% of the claims may be fraudulent and that distributing funds now could jeopardize an ongoing criminal investigation.

The investigation includes potential misconduct by "plaintiffs as well as third parties including but not limited to their attorneys, recruiters, and medical professionals," Hochman said in the memorandum accompanying the filing.

Court records indicate plaintiffs' counsel are divided on the request. According the ex parte application filed Thursday, several firms informed the District Attorney's Office they oppose the motion, while another group of firms advised prosecutors they support the requested stay.

Hochman seeks permission for the District Attorney's Office to intervene in the coordinated juvenile camp sexual abuse litigation and stay all settlement distributions until Dec. 31. The request was filed in Jane BP1-B Doe et al. v. Doe 1 et al., lead case No. 22STCV25961, the coordinated Los Angeles County juvenile camp cases.

A hearing is set for Monday morning in Los Angeles County Superior Court, where the docket says Civil Department Supervising Judge Lawrence Riff, who approved the settlement, will be presiding.

Court papers reveal that earlier this year, Hochman asked Los Angeles County to voluntarily pause settlement payments for six months while prosecutors conducted a preliminary review. The county agreed.

Notably, Hochman personally signed the ex parte application, supporting declaration and memorandum of points and authorities rather than assigning the filing to a deputy district attorney.

The motion seeks a six-month stay of all payments from the settlement, which was approved by the Los Angeles County Board of Supervisors last year to resolve more than 11,000 claims by people alleging sexual abuse while housed in county juvenile facilities, including probation camps.

According to the filing, the District Attorney's Office has spent months conducting a criminal investigation into allegations that a significant number of claims submitted under Assembly Bill 218 are fraudulent. That bill allowed childhood sexual assault claims to be filed decades later.

In a May 21 letter to county attorney Andrew Baum of Glaser Weil, Hochman said investigators had completed the first phase of the review, which involved collecting and analyzing information from county records and multiple government databases through a data collection system developed by the District Attorney's Office.

"Based on this preliminary investigation, we believe the percentage of fraudulent claims may be as high as 81 percent," Hochman wrote.

According to the memorandum, prosecutors are now entering what they describe as an intermediate phase of the investigation, during which collected data will be analyzed, compared and interpreted. The filing states that investigators expect additional allegedly fraudulent claims to be identified as the review continues.

The District Attorney's Office told the court it has not yet received complete information for all claimants, particularly those who allege abuse while under the supervision of Dependency Court.

Hochman told the court that plaintiffs' lead counsel have been advised that they can expedite review of their clients' claims by providing all court documentation, extrinsic documentation and full identifying information for their clients which will expedite the intermediate phase of its investigation - identifying which claimants were and were not housed at the location where they claim they were abused.

Hochman's filing said that as of Wednesday morning, the following law firms opposed his application: Abir Cohen Treyzon Salo LLP, Becker Law Group, Clarkson Law Firm P.C, D. Miller & Associates PLLC, McNicholas & McNicholas LLP, Peiffer Wolf Carr Kane Conway & Wise, Slater Slater Schulman LLP, The Lewis Farmer Law Group, and Waters Kraus Paul & Siegel.

These firms, he said, concur with application: Aylstock, Witkin, Kreis,& Overholtz PLC, Bana Legal Group, Carillo Law Firm LLP, El Dabe Ritter Trial Lawyers, Engstrom, Lipscomb & Lack, Gould Grieco & Hensley, Jason J. Joy & Associates, Law Offices of Lee Paul HalladaManly, Stewart, Finaldi & Thom.

A central argument in the filing is that the District Attorney's Office possesses investigative resources unavailable to other entities involved in evaluating claims.

The memorandum states that prior vetting efforts conducted before the settlement and through ongoing judicial review were insufficient to identify all potentially fraudulent claims and that prosecutors have access to databases and investigative tools not available to other agencies.

Hochman argues that paying claims before the investigation is completed could reduce compensation available to legitimate abuse survivors.

"Since there is a finite amount of money available to settle all the claims, every fraudulent claim that receives a dollar (or more likely hundreds of thousands of dollars) means that legitimate claims from child abuse survivors will receive less of a payout," Hochman wrote in his letter to Baum.

The filing also contends that distributing settlement funds now could hamper the criminal investigation by making witnesses less cooperative, obscuring financial trails and increasing the difficulty of recovering money allegedly obtained through fraud.

To support intervention, the District Attorney relies on Code of Civil Procedure Section 387, arguing that no existing party in the litigation adequately represents the interests of the criminal investigation and that settlement distributions may impair the office's ability to protect those interests.

If granted, the motion would delay distributions in the largest sexual abuse settlement involving a local government entity in California history while prosecutors continue investigating the validity of thousands of claims.