Los Angeles County will halt some payments from its $4-billion sex abuse settlement, leaving many plaintiffs on edge as prosecutors ramp up an investigation into allegations of fraud.<\/p>\n
L.A. County agreed last spring<\/a> to the record payout to settle a flood of lawsuits from people who said they\u2019d been sexually abused by staff in government-run foster homes and juvenile camps. Many attorneys had told their clients they could expect the first tranche of money to start flowing this month.<\/p>\n But the county\u2019s chief executive officer, Joe Nicchitta, said Thursday that the county would \u201cpause all payments\u201d for unvetted claims after a request by Dist. Atty. Nathan Hochman. These are claims that have been flagged as requiring a \u201chigher level of scrutiny,\u201d according to a joint report submitted Thursday by attorneys in the settlement.<\/p>\n The district attorney announced he would investigate the historic settlement after reporting by The Times that found some plaintiffs who said they were paid to sue.<\/a> Investigators have found \u201ca significant number of cases where we believe there is potential fraud,\u201d according to a spokesperson for the prosecutor\u2019s office. The State Bar<\/a> is spearheading a separate inquiry into fraud allegations.<\/p>\n On Jan. 9, Hochman formally requested the county pause the distribution of funds for at least six months, which he said would give his office \u201ca reasonable opportunity to complete critical investigative steps.\u201d<\/p>\n \u201cPremature disbursement of settlement funds poses a substantial risk of interfering with the investigation by complicating witness cooperation, obscuring financial trails, and impairing my office\u2019s ability to identify and prosecute fraudulent activity,\u201d Hochman wrote in a letter to Andy Baum, the county\u2019s main outside attorney working on the settlement.<\/p>\n Plaintiff lawyers argued the county was required to turn over money by the end of the month.<\/p>\n The county said it came to an agreement Thursday and plans to turn over $400 million on Friday \u201cto cover claims that have already been validated,\u201d according to a statement from Nicchitta. That money will go into a fund where it will be distributed when judges are finished vetting and deciding how much each claim is worth. <\/p>\n \u201cNo plaintiff was getting paid until the allocation process is completed,\u201d said the county\u2019s top lawyer, Dawyn Harrison. \u201cThe County is not overseeing that intensive process.\u201d<\/p>\n The rest of the payments, Nicchitta said, will be on hold until the claims can \u201cbe appropriately investigated.\u201d<\/p>\n \u201cThe County takes extremely seriously its obligations to provide just compensation to survivors. Preventing fraud is central to that commitment,\u201d he said. \u201cFraudulent claims of sexual assault harm survivors by diluting compensation for survivors and casting public doubt over settlements as a whole.\u201d<\/p>\n The uncertainty has sparked a sense of despair among those who spent the last few years wading through the darkest memories of their lives in hopes of a life-changing sum. <\/p>\n Andrea Proctor, 45, said the last few years have been like \u201cdigging into a scar that was healed.\u201d<\/p>\n \u201cThe whole lawsuit just blew air out of me,\u201d said Proctor, who sued in 2022 over alleged abuse at MacLaren Children\u2019s Center, an El Monte shelter<\/a> where she says she was drugged and sexually abused by staff as a teenager. \u201cI\u2019m just sitting out here empty.\u201d<\/p>\n Proctor said she desperately needs the money to stabilize her life, the first part of which was spent careening from one crisis to the next \u2014 an instability she traces partially to the abuse she suffered as a minor. <\/p>\n Since a 2020 law change<\/a> that extended the statute of limitations to sue over childhood sexual abuse, thousands have come forward with claims of abuse in county-run facilities dating back decades. The county resolved claims it faced last year through two massive payouts \u2014 the first settlement<\/a> for $4 billion, which includes roughly 11,000 plaintiffs, and a second one last October<\/a> worth $828 million, which includes about 400 victims.<\/p>\n Now, according to court filings made public Tuesday, the county faces an additional 5,500 claims of the same nature, leaving the prospect of a third hefty payout looming on the horizon.<\/p>\n \u201cThey\u2019re telling me the ship has sailed,\u201d said Martin Gould, a partner with Gould Grieco & Hensley, who said he wants this next flood of litigation to focus on pushing for arrests of predatory staff members still on the county\u2019s payroll. \u201cI don\u2019t believe that.\u201d<\/p>\n Gould says his firm, based in Chicago, represents about 70 victims in the new litigation. James Harris Law Firm, a small Seattle-based firm<\/a> that specializes in big personal injury cases, has about 3,000. The Right Trial Lawyers, a firm<\/a> that lists a Texas office as its headquarters, has about 700, according to an attorney affiliated with the firm.<\/p>\n These lawyers will be pleading their cases in front of a public \u2014 and a Board of Supervisors \u2014 at a moment when the conversation has shifted from a reckoning over systemic sexual abuse inside county facilities to concerns<\/a> about the use of taxpayer money. <\/p>\n A series of Times investigations<\/a> last fall found nine clients represented by Downtown LA Law Group, or DTLA, who said they were paid by recruiters to sue. Four said they were told to make up their claims.<\/p>\n All the lawsuits filed by the firm, which represents roughly a quarter of the plaintiffs in the $4-billion settlement, are now under review<\/a> by Daniel Buckley, a former presiding judge of the county\u2019s Superior Court.<\/p>\n DTLA has repeatedly denied any wrongdoing and said in a previous statement that it \u201ccategorically does not engage in, nor has it ever condoned, the exchange of money for client retention.\u201d <\/p>\n Several DTLA clients said they were unaware of the probes by the State Bar and the district attorney, though they were told this month to expect delays in payments due, in part, to \u201ca higher-than-expected false claim potential.\u201d <\/p>\n The delays have caused extra anguish for some plaintiffs who have taken out loans against their settlement.<\/p>\n