times investigation

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.

Downtown LA Law Group represents roughly 2,700 people suing the county. Hochman said the firm is one of several he’s focused on.

(Carlin Stiehl / Los Angeles Times)

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.”

L.A. County supervisors want to bar “predatory” salespeople who they say prey on vulnerable residents seeking benefits from the region’s social services offices.

The supervisors unanimously voted Tuesday to explore creating a “buffer zone” outside county offices, prohibiting certain types of “aggressive” solicitation toward people seeking food stamps and cash aid. County lawyers have two months to figure out what such a zone would look like.

The looming crackdown follows a Times investigation that found seven people who said recruiters outside a social services office in South Los Angeles paid them to sue the county over sex abuse. Two more later told The Times they, too, were solicited for sex abuse lawsuits outside a county social services office in Long Beach, though they initially believed they were being recruited to be extras in a movie.

“We are painfully aware of the ongoing allegations of fraud and the pay-to-sue tactics used to recruit clients and file lawsuits against the county,” said Supervisor Janice Hahn, who announced she would push for the buffer zone after the Times investigation. “There must be greater accountability both to protect survivors seeking justice and to ensure that fraudulent claims and predatory solicitation are stopped at their source.”

The county’s more than 40 social services offices act as one-stop shops for residents who need help applying for food, housing and cash assistance. Outside many of the larger offices in poorer areas, a bustling ecosystem thrives with vendors hawking goods and services to those in line.

The supervisors said Tuesday they were troubled by some of the offerings.

“Vendors asking for copies of people’s personal documents, trying to sell them products and even recruiting people into claims against the county — this behavior puts residents at real risk and undermines the trust in our public services,” said Supervisor Lindsey Horvath.

Supervisor Kathryn Barger said she wanted to see reforms that would protect both taxpayers and “vulnerable individuals who are being used as pawns to line the pockets of many of these attorneys.”

The motion passed 3 to 0. Supervisors Hilda Solis and Holly Mitchell, whose district includes the social services office where some of the lawsuit recruitment took place, were absent.

The Times spent two weeks outside the South L.A. office this fall and watched vendors seek out dozens of people with Medi-Cal, the state’s health insurance for low-income Californians. The vendors would pay them anywhere between $3 and $12 to undergo COVID and blood pressure tests, which they said would be billed to their state insurance. Some people said they routinely stopped by the location for quick cash.

Giveaways of free phones are also popular for those who are eligible through a government-subsidized program. Recipients have complained that the service on the phones was often short-lived, with some people returning to the kiosks within a few days after their number stopped working.

Leaders at the Department of Public Social Services, who oversee the offices, say they’re limited in what they can do outside their facilities. Many of the busiest locations are in Los Angeles or smaller cities, where the county has no authority. And regulating where vendors can go on public sidewalks has proved a reliable headache for local governments in the past.

Last year, the Los Angeles City Council eliminated the “no-vending zones” it had created in areas where it said street vendors would contribute to congestion. The ban was met with an outcry and a lawsuit from vendors who argued street vending had been decriminalized and the city could no longer outlaw the stands.

Eugene Volokh, a 1st Amendment professor and senior fellow at Stanford University’s Hoover Institution, said the county will have to be careful in defining what conduct is “predatory” and what is protected speech.

“The devil’s going to be in the details,” Volokh said. “Whenever you hear words like ‘predatory’ or ‘exploitative’ or ‘harassing’ or ‘bullying,’ you know you’re dealing with terms that are potentially very vague and often, by themselves, too vague to be legally usable terms.”