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Bogus claims threaten to taint Lejeune payouts to veterans

A welcome sign stands outside the U.S. Marine Corps Base Camp Lejeune in North Carolina. (U.S. Marine Corps/TNS)

The government plan to pay billions of dollars to victims of toxic water at Camp Lejeune has unleashed a wave of fraudulent claims that threatens to disrupt or taint what could be one of the largest-ever mass tort cases.

Mikal Watts, whose Texas firm has 6,000 Camp Lejeune clients, said its internal auditors determined hundreds of referrals from other lawyers for Camp Lejuene and other cases were bogus, often based on doctored medical records and fictional reports of diseases or other sickness. Some of the would-be plaintiffs, he said, had been recruited through call centers based in India.

Another lawyer, Donald Marcari, said his Virginia-based firm has rejected scores of suspicious Camp Lejeune claims, including a few from people who listed home addresses that turned out to be a Burger King or a local chapel, or who offered confusing or illogical replies to routine questions about their time at the base or how they got sick.

“As soon as you go outside the script, they can’t answer,” said Marcari, a former Navy attorney.

Grifters trying to cash in on a sprawling public injury case isn’t new, but the Camp Lejeune litigation has qualities that make it particularly vulnerable.

The government has already acknowledged its responsibility—and willingness to pay—for contamination at the North Carolina Marine base that over decades may have exposed as many as 1 million people to toxic water.

A surge in available litigation funding means extra resources for law firms to find and register as many potential plaintiffs as they can before the window to file claims ends next August.

And social media and technology have made it easier than ever for legal advertising and lead-generating firms to find those people and sell their names to lawyers. One telecom executive, David Frankel, said his robocall surveillance company had identified more than 10,000 robocalls seeking Camp Lejeune claimants since Congress approved the payout program in August 2022.

“It pains me to see what the industry has become,” said Bob Goldwater, who was among the first mass tort lawyers to use national advertising to find clients. “Unfortunately, fraud is becoming increasingly more prevalent. It stems from lawyers taking shortcuts and using newer marketing companies without properly vetting them or doing any due diligence.”

Veterans advocates and lawyers also say the fake claims—and the time and effort to identify and weed them out—could dilute the empathy for legitimately ill victims and slow the process of compensating them.

“You’ve got people who are ripping off the government and the attorneys,” said Mike Partain, 55, who was born on the base and developed breast cancer as an adult. “And in the end it’s going to victimize the entire community, because people will look at us and wonder if we are real.”

All claims must first be vetted by the Navy, which oversees the base. A Navy spokesman said it had received about 117,000 claims by mid-October and “is working diligently to identify potential fraud during the claims review process.” He declined to elaborate.

(A government filing Friday disclosed for the first time that paying all the claims filed to date would cost nearly $3.3 trillion.)

But the government has projected it could receive hundreds of thousands of compensation claims—from anyone who spent at least 30 days on the base between 1953 and 1987—and that the payout could ultimately top $21 billion.

Some claimants will qualify for a settlement under an early resolution program announced last month. Thousands more are likely to end up in litigation in the Eastern District of North Carolina.

While court-approved settlements and judgments might take years to be distributed, lead-generators typically get paid up front for delivering potential clients, sometimes thousands of dollars for each name.

Demand for their services has grown in part because of a surge in litigation funding available to law firms. One consultant told Bloomberg Law that lenders by mid-year had committed nearly $2 billion to firms filing Camp Lejeune lawsuits. Industry veterans understand “an influx of capital invites greed,” said Brian Roth, CEO of Rocade Capital, a litigation funding firm. The key to preventing fraud in the industry, he said, is understanding the roles and backgrounds of all the parties.

“Where you have issues is when you have leads being marketed to multiple different buyers, you have call centers without oversight,” Roth said.

One person who said they were randomly phoned and coached by a call-center employee on how to file a bogus Camp Lejeune claim said the coach provided a backstory to make them seem credible.

In recorded calls shared with Bloomberg Law, the coach explained to the would-be claimant the dates and cancer types they should cite, suggested excuses for being unable to provide medical records, and directed the person to say their father worked as a plumber at the North Carolina base and had a DD Form 214, a government document that proves military service.

At one point, the coach chided the would-be claimant for “goofing up” their responses after they had practiced them multiple times, the recording shows.

Tracking down the actual operators of the call centers can be difficult, and proving their practices violate some law even tougher, said Brandon Lewis, a forensic accountant who previously investigated call center fraud with the Arizona Attorney General’s office.

“Even though it’s predicated on fraud, they say, ‘Hey we delivered you these leads,’ ” said Lewis. “The criminal prosecutors will start looking at this and say, ‘Well, this is just real messy and it’s not clear-cut.’”

The person who provided the recordings to Bloomberg Law asked not to be named out of privacy concerns.

They said the call came from an operation run by Revolts PI LLC, which was formed in March and listed its address as an office in Sheridan, Wyo., that is commonly used to register businesses, according to state records.

(Home to what appears to be a single-story brick building, it has been cited as the registered address of approximately 88,000 other businesses, the Sheridan newspaper reported in 2021.)

The address was also listed on the company’s website, which promised “top quality Camp Lejeune leads” as well as leads for other prominent personal injury cases, including lawsuits involving talc powder and the weed-killer Roundup.

Revolts employees or officials could not be reached for comment. No one answered calls to the phone number on the company’s website or messages sent to email addresses on the LinkedIn resumes of two people claiming to be Revolts executives. Earlier this month, Revolts filed dissolution papers in Florida, records there show.

Lead-generating firms have long existed, but they’ve flourished amid the explosion of legal advertising and litigation funding. More than $145 million had been spent last year on legal advertising related to the Camp Lejeune litigation.

Good lead-generating companies do exist, but are hard to come by, said Alabama attorney Fob James IV.

“Most of them suck,” James said. “And their leads are like fool’s gold.”

The practice also has entangled unsuspecting victims like Eileen Adamo, a western Pennsylvania widow whose husband, a Marine, died of kidney cancer in 2020.

Adamo said she received a call from a lead-generating company in March and she shared some information about her husband, Santo Adamo, who once was stationed at Camp Lejeune.

In October, a New York lawyer called and introduced himself as her attorney, Adamo said, and instructed her to file a claim on behalf of her deceased husband. When she told the attorney that she never signed up with a law firm, he insisted she had and emailed her paperwork that appeared to show her electronic signature, she said.

A lot of the information about her husband was incorrect, according to Adamo, who first posted her concerns about the call in a Facebook group for Camp Lejeune veterans and their relatives.

“I said these documents are fraudulent. You need to destroy them,” Adamo said.

She said the attorney agreed.

Watts is prominent among mass tort lawyers, and also has high-profile experience with false claims.

In 2015, he was among seven people charged with fabricating thousands of clients in a bid to collect payouts from the 2010 BP Deepwater Horizon oil spill in the Gulf of Mexico. Watts and four co-defendants were acquitted.

He said that experience has made him hyper-vigilant on the issue, and this month he hosted a session on the topic at a lawyers’ conference in Las Vegas. (The twice-yearly event, called Mass Torts Made Perfect, draws personal injury lawyers from around the country; October’s gathering also included appearances by Sting and Paris Hilton.)

In his session, titled “Client Acquisition: What You Need To Know About Protecting Your Law Firm,” Watts outlined the money trail that starts with litigation funders, then travels from law firms to legal advertising companies to lead-generating companies and brokers and finally to call centers. He said his firm, Watts Guerra, spent months auditing all of the plaintiff leads referred by other lawyers, and determined “hundreds and hundreds” were bogus.

A Marine on his staff found names on the list of Camp Lejeune leads with identical and disqualifying problems: the parents of the claimants were dead, they did not live on the Marine base but visited during the summer, or they were too young at the time of exposure to remember anything except they drank the water.

Watts also said his firm’s audit identified 105 call centers in India and other Asian countries tied to fake leads in mass tort cases including Camp Lejeune. Overseas call centers typically take advantage of cheaper labor and less regulation.

Watts said he shared his information with the U.S. Justice Department and the FBI, but, in an interview, declined to elaborate. A representative of the FBI would not confirm or deny the existence of any investigation.

Watts, who has previously estimated his firm represents more than 200,000 mass tort clients, said that it continues to accept plaintiff referrals from other lawyers, but gives them deeper scrutiny. “We have held back all claims in all torts pending independent third party review,” he said in an interview.

Marcari, the Virginia lawyer, said fake claims would slow down the filings and eventually the payout to victims, with the government already struggling to handle thousands of claims.

Vetting a Lejeune claim is time-consuming, as attorneys have to check information from decades ago, he said.


© 2023 Bloomberg L.P

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