NEW ORLEANS — BP filed a federal lawsuit on Tuesday accusing a Texas lawyer of falsely claiming to represent thousands of deckhands who lost money because of the 2010 Gulf of Mexico oil spill.
The lawsuit filed in New Orleans alleged that more than half the Social Security numbers on Mikal Watts’s client list were fake — either dummy numbers or numbers belonging to someone else, living or dead.
Since Watts’s list of 42,722 names accounted for 88 percent of the individual crew claims and about three-quarters of all deckhands expected to file claims, the fraud inflated the size of a settlement fund for workers in commercial fishing, according to the suit.
Watts, of San Antonio, did not immediately respond to a request for comment. He resigned in March from the team of plaintiffs’ attorneys who brokered the settlement for commercial fishing vessel owners, captains and deckhands. The San Antonio Express-News reported in February that Secret Service agents had searched his two law offices.
Watts ultimately filed 648 claims for deckhands. Of 631 processed so far, only eight were found eligible for payment, according to the suit.
“The facts in this case shout fraud. Tens of thousands of Mikal Watts’ ‘clients’ have proved to be phantoms,” BP spokesman Geoff Morrell said in a statement. “Mr. Watts’ false representations improperly inflated the value of potential claims against the Seafood Compensation Program and resulted in an overblown $2.3 billion fund. Under these circumstances, BP is not going to stand idly by and allow payments to proceed without first addressing the fraudulent conduct.”
The settlement was set up in two rounds. If money remained after the first round, it could be split among people who received the initial payments.
After paying about $1 billion in claims, the fund holds about $1.3 billion, according to BP. It said this potentially provides “not a premium, but a windfall” for recipients.
BP is asking a judge to return some of that money. The judge would set the figure, the lawsuit said.
The lawsuit also said that most Social Security numbers submitted by Watts for the initial settlement matched claims that his firm filed with the BP Claims Program (BPCP) set up for people and businesses that either opted out of the settlement or were not eligible for it, according to the suit.
The claims program found that 45 percent of the numbers belonged to someone else, living or dead, and 13 percent were incomplete or “dummy” numbers such as 000-00-0001.
“The BPCP discovered that one of its own employees — who was not a commercial fisherman, had never retained Watts as counsel, and had never filed a claim — had been included among Watts’ client list not once, but twice,” according to the suit.
The filing was made in the federal court for the Eastern District of Louisiana, where jurors told a judge Tuesday that they were having difficulty reaching a verdict in the trial of a former BP engineer charged with trying to obstruct a probe of the oil spill.
In a note read aloud in court by U.S. District Judge Stanwood Duval Jr., jurors said they have been “at a standstill” and deadlocked for several hours. Duval instructed jurors to continue deliberating, saying it’s an “important case” that may have to be tried again if they can’t reach a unanimous decision.
Jurors have deliberated for more than eight hours since closing arguments Monday by Justice Department prosecutors and a lawyer for Kurt Mix, who is charged with two counts of obstruction of justice.