Editor’s note: Desi Canela, a former Express-News journalist, is in Gulfport, Miss., for the federal fraud trial of San Antonio attorney Mikal Watts and six co-defendants. She is blogging as an unpaid observer who supports Watts and his team. Look for daily updates at www.mikalcwatts.com.
Something strange happened on the way to the federal fraud trial of San Antonio plaintiff’s attorney Mikal Watts, his brother, David Watts, and five other co-defendants charged with falsifying thousands of claimants in the aftermath of the 2010 British Petroleum oil spill in the Gulf of Mexico.
The media lost interest.
News of the 2013 federal raid on the offices of Watts and his October 2015 indictment drew big newspaper headlines and breathless reports from local television anchors. Reporters knew a sensational story when they saw one.
The usual tips from federal sources assured the presence of cameras as agents carted out boxes of legal documents from Watts’ law offices. The Express-News published five different front page stories chronicling Watt’s troubles. Local television produced its fair share of incriminating Watts stories.
Readers and local television news viewers understandably assumed Watts was guilty, caught red-handed stealing millions, and would be easily convicted and sentenced.
Long before the trial opened in Gulfport, Miss., in July, Watts was tried and convicted in the court of public opinion. As a lawyer who sues the government and big business on behalf of thousands of little people, he made for an easy target. Trial lawyers are not popular in a state dominated by Republicans.
I’ve been blogging throughout the trial’s first three weeks. The Rivard Report has asked me to write a weekly summary of the case, largely because editors believe San Antonio ought to have some consistent source of what is going on inside the courtroom of U.S. District Judge Louis Guirola Jr.
No, I am not getting paid for these articles.
I am a former Express-News journalist, but now I am part of the larger team backing Watts in the trial. I am an unpaid blogger attending the trial, every day, every minute, but I’ve made it clear from the outset that I am an advocate. You can read what I write and take it or leave it. I can tell you the Rivard Report editing process has been vigorous.
So why the lack of San Antonio media interest after so much page one coverage? Frankly, I think it’s about money and the decline of mainstream media. A decade ago, we would have seen a San Antonio press corps here in force. I am sure reporters are itching to jump on a plane and come here. But editors have less and less leeway to cover the news beyond San Antonio, so we assume an out-of-state trial is too expensive to cover.
Too bad. They would have found a story far more interesting in its complexity, with a far less certain outcome. Love or hate Mikal Watts, there has been nothing black and white about this trial.
Yet even the Gulf Coast media has lost interest. The local newspaper in Gulfport has a reporter assigned to the trial, but she doesn’t attend every day. Countless stories based on government leaks were published or broadcast in various Gulf Coast media in the months and years leading up to the trial. Now, nada. Maybe the occasional wire service story.
Before the trial opened was a different matter. Stories would get published in the Gulf Coast media and some reporters wouldn’t even attempt to contact Watts or any of the other defendants for comment. The assumption among many was that the U.S. Attorney’s office, or the FBI or other investigators, were working the public and potential jurors ahead of the trial.
And then the lead prosecutor, Assistant U.S. Attorney John Dowdy of Jackson, Miss., suddenly quit the case and resigned his position one Saturday in May, two months before the opening of the trial. Dowdy, a 28-year veteran who spent five years trying to build a case against Watts and the other defendants just walked away from the case and his career without any real explanation from him or the government.
Did he quit or was he fired? Did higher ups find fault with him and the case? No one seems to have any answers to those questions. Strangely, the media here and in San Antonio have spent very little time or effort trying to answer an obvious question: What happened inside Justice Department circles that led to Dowdy’s abrupt resignation?Perhaps the answers will come out after the trial.
Meanwhile, the trial continues.
For the past three weeks, the prosecution has presented a voluminous series of documents and exhibits to a seemingly disengaged jury in an attempt to prove the alleged scheme by the seven defendants.
The jury has heard from nearly 50 different government witnesses, some testifying in English, others in Vietnamese. With weeks still to go, jurors look spent. This is not an easy case and it certainly isn’t a riveting one like the fictional trials we are accustomed to watching on dramatic television series.
Even remembering who’s who among the defendants and sorting out the long list of charges would be more than enough to confuse the average citizen.
Watts, his brother David, Wynter Lee, Eloy Guerra, Gregory P. Warren, Thi Houng “Kristy” Le and Thi Hoang “Abbie” Nguyen were indicted on 95 counts for allegedly inventing and submitting 40,000 false names of claimants who suffered financial losses following British Petroleum’s 2010 Deepwater Horizon oil spill.
Twenty-two of the counts were dropped as redundant by Judge Guirola on July 18, the first day of trial.
The 2010 BP oil spill was the worst environmental disaster in U.S. history. Five million barrels of crude oil poured into the Gulf of Mexico, damaging environmentally sensitive shorelines, shutting down the seafood industry, and killing 11 oil rig workers. The catastrophe has cost BP approximately $62 billion in losses.
Watts, part of a larger team of lawyers set to try the civil lawsuit against BP on behalf of tens of thousands of individuals and businesses financially harmed by the oil spill, conducted numerous key pre-trial depositions of senior BP executives.
BP, in turn, accused Watts of submitting phony claims in 2013, and days before the civil trial was set to open, a brigade of 80 U.S. Secret Service agents raided Watts’ San Antonio law offices, forcing him to withdraw from the trial team.
There have been some bizarre turns in the case, and the start of the third week provided yet another. Luke Skidmore, owner of Lucy Lu, a dog that allegedly had losses intentionally claimed on its behalf by the Watts firm. Skidmore was government witness #48.
Assistant U.S. Attorney Jerry Rushing, the lead prosecutor, began by asking Skidmore to verify Lucy Lu’s phone number, signature, request for a tax return, social security number, and other personal information before revealing Lu actually was a dog to the jury. Two of the jurors zealously taking notes during Skidmore’s testimony threw down their pens in frustration after a photograph of the dog was displayed.
On cross-examination, Watts demonstrated that he had never met Skidmore, never been to his home and would have no way of knowing that Lucy Lu, for whom he received a client contract, a completed questionnaire, and a signed tax release document, was a dog rather than a person. To avoid business calls at his home, Skidmore had listed his dog, Lucy Lu, in the phone book.
Skidmore then agreed with Watts that he had never heard of anyone paying $10 million for a phone book, or for a dog’s name.
“Can you think of any lawyer in the state of Mississippi or in the United States that would in his right mind knowingly file a lawsuit for a dog?” asked Watts.
“No,” replied Skidmore.
Skidmore stepped down, and prosecutors moved on, introducing 10 more witnesses – all people – for additional questioning and verification of personal information. Eight of the 10 needed assistance from a Vietnamese interpreter.
The jury perked up in time for the late afternoon testimony of Chris Deleon, the government’s last witness of the day.
DeLeon was hired by co-defendant Eloy Guerra to create and maintain a database to store all of the personal information of claimants the Watts firm was receiving from Kristy Le and her field team. DeLeon’s testimony helped to establish the lineage of how documents flowed from the field team to the Watts law firm.
Le, who is fluent in Vietnamese, was initially hired by co-defendant Greg Warren to attend town hall meetings and sign up members of the Vietnamese fishing community whose livelihoods were devastated by the BP oil spill. After attending the meetings, Le would compile lists recording personal information for each client and then forward the lists to DeLeon, a data professional hired by Guerra. It was DeLeon’s job to verify the data and make sure all the fields were complete before the names were sent to Mikal’s brother David, a senior employee at the law firm.
DeLeon testified he began to grow frustrated with Le because she consistently sent him spreadsheets with incomplete or inaccurate data.
“Well, some of the oddities that popped up was that people would submit a full social and then later on, in the process of cleaning up a file that wasn’t even scheduled to be cleaned up, the social was changed,” DeLeon told the prosecutor. “So, for instance, you know, somebody would give their social, and then in the process of cleaning up that file, a new social was inputted. And David (Watts) caught that right away. I didn’t even catch it. David actually was the one that caught it.
“I didn’t trust them (Le) anymore. I didn’t trust them, because so much data was, was wrong… so many things were missing,” said Deleon. “I felt like if we got somebody different to do it, we might get a better response.”
On cross-examination by Watts, DeLeon admitted that he did not communicate his concerns to anyone at the law firm. He agreed that all law firm employees acted with the most good faith, spending millions of dollars and countless hours in a good faith attempt to collect real documents for real people who had sustained real damages.
Upon further cross-examination by defense attorney Allison O’Neill, who represents Eloy Guerra, Deleon said tension built between him and Le when he began challenging the accuracy of her field records. Suddenly, he said, Warren had to serve as a mediator between the two and became increasingly involved during their conversations.
DeLeon said he told Warren about his issues with Le and the erroneous data she was delivering. Warren assured him that if Le were participating in any fraudulent activity it would “come down on her.”
An uncomfortable shift in the courtroom occurred when O’Neill disclosed Warren and Le were secretly involved in an intimate relationship. O’Neill divulged the affair during her cross-examination of DeLeon to help establish Warren and Le’s shared motive concealing fraudulent fieldwork.
“Your Honor,” O’Neill addressed Judge Guirola, “at this time I would like to be able to ask this witness about his personal knowledge of the romantic relationship between Greg Warren and Kristy Le, to show the motive, relationship of the parties, bias.”
Guirola allowed her to proceed, and O’Neill then asked DeLeon a series of direct questions about Warren and Le’s relationship.
“Okay. So the person that you were going to and who is telling you he will make sure that Kristy doesn’t do anything wrong is actually involved in some kind of a secret relationship with her?” O’Neill asked.
“Correct,” DeLeon replied.
“And they were careful to hide that from you before you saw them?” O’Neill asked.
“Yes,” he said.
Tuesday morning began with Ryan Willis, a private investigator from New Orleans, taking the witness stand. Willis was initially hired to investigate Le’s boyfriend and his alleged infidelities. Willis eventually would play a major role in providing Le with access to private information such as social security numbers, dates of birth and street addresses she needed to allegedly create the fake identities of thousands of fictitious BP claimants.
During the government’s 22-minute direct-examination, Willis testified he created 16 accounts for Le and her employees to access data from IRB Search, a database used by professional investigators to search billions of records for personal information. Willis said he gave Le and her people access to the database so they could run information searches related to Le’s purported claim files and update their records.
Willis was still on the stand Wednesday.
Defense attorney Mike McCrum, who represents David Watts, built up his hour-long cross-examination of Willis with a voluminous amount of documents, in an attempt to create the impression the defense had a better grasp of where fraud actually occurred than the government.
McCrum offered several examples of Le’s manufactured claimants by presenting the jury with data she accessed and manipulated after gaining access to the database from Willis.
In one instance, McCrum showed Willis documents allegedly altered by Kristy Le to prove she not only knowingly added the 67 names of deceased claimants to the firm’s BP litigation list, but that she tried to cover up the fact that they were dead by deleting all deceased notifications from the data before forwarding it to DeLeon and Guerra.
“Now, were you aware that when information was being forwarded from Kristy to Eloy Guerra (and Chris DeLeon), that the deceased notifications or deceased markings were being deleted?” MrCrum asked Willis.
“No, of course not,” answered Willis, seemingly shocked at how the data had been manipulated. “Otherwise, I would have stopped working for Kristy. No.”
Later, McCrum asked Willis if he gave Le or her employees instructions on how to reassign private information to different people.
“Of course not. That would be fraudulent,” Willis said.
McCrum argued DeLeon did not know that Le added names and personal information of deceased people to what he thought were complete client files. DeLeon forwarded the data to the Watts law firm, but no one except Le knew the claimants were fictitious.
The trial was recessed Thursday afternoon until Monday. The government has indicated it will rest its case sometime Monday. Mikal Watts, who is representing himself in the case, is expected to begin his defense Tuesday by taking the stand and starting with his own testimony.
Top image: (From Left) Nueces County-Court-at-Law Judge Terry Shamsie, Mikal Watts, his mother State District Judge Sandra Watts of Corpus Christi, criminal defense attorney Mike McCrum, and Texas political consultant Christian Archer leave the courthouse in Gulfport, Miss. Photo by Desi Canela.