NY lawyer pleads guilty to bribery in LA water bill case

A New York City lawyer, who at the same time represented the Los Angeles Department of Water and Power and a ratepayer suing it over a billing debacle, agreed to plead guilty to a bribery charge for accepting an illegal payment of nearly $2.2 million, the U.S. Department of Justice announced Monday.

Paul O. Paradis, of the New York law firm Paradis Law Group, admitted to additional bribery schemes involving high-level Department of Water and Power officials, the DOJ said in a statement. Both the information and the plea agreement were filed Monday in U.S. District Court in Los Angeles.

Beverly Hills attorney Paul Kiesel, who was also hired by the city, is cooperating with the investigation and is not charged with any wrongdoing, the DOJ said.

The announcement follows a special master's report in July that made similar findings but also said members of the Los Angeles city attorney's office and several prominent lawyers participated in a litigation scheme and a subsequent cover-up. The city attorney did not immediately provide a comment Monday.

City Attorney Mike Feuer has repeatedly said he was not involved in any scheme.

In December 2014, Feuer's office retained Paradis and Kiesel as special counsel to represent the city in a lawsuit against PricewaterhouseCoopers LLP (PwC), which had set up the billing system. After the special master's report was published, Kiesel said, "The special master's report confirms it was the Los Angeles city attorney's office that directed, managed, and controlled all of the litigation."

The lawsuit, filed by LA resident Antwon Jones, referred to in emails by its code name the "white knight," arose from the 2013 faulty billing system, configured and implemented by PwC that overbilled more than 1 million ratepayers.

After the hand-picked attorneys filed the water billing class action in 2015, the city quickly agreed to a settlement without conducting any discovery. Antwon Jones v. City of Los Angeles, BC577267 (L.A. Sup. Ct., April 1, 2015).

According to Monday's announcement, Paradis and others working on the city's behalf in the Jones lawsuit participated in four confidential mediation sessions with an "Ohio attorney," who purportedly represented Jones.

"At the close of the final mediation session, the mediator issued a proposal that would cap plaintiff's attorney fees at $13 million -- a figure that raised an objection from another lawyer representing the city, who complained in an internal email that the amount was unjustifiably high because, in part, the Ohio attorney had done 'little demonstrative work to advance the interests of the class,'" the DOJ statement said. "Notwithstanding that objection, the city agreed to the fee proposal."

The Ohio attorney, Jack Landscroner, since deceased, then secretly paid over $2 million to Paradis, disguising the kickback as "a real estate investment," and funneling it through shell companies that Paradis and Landscroner had set up, according to the DOJ.