Former LA city attorney official pleads guilty in litigation scheme

A former top official at the Los Angeles city attorney's office pleaded guilty Monday to aiding and abetting an extortion scheme connected to a sham lawsuit filed against the Department of Water and Power, the Department of Justice announced.

Thomas H. Peters, who was chief of the Civil Litigation Branch of the city attorney's office from 2014 to 2019, agreed to plead guilty Monday to one count of aiding and abetting extortion, a crime that carries a maximum sentence of 20 years in federal prison.

Peters is the fourth person to plead guilty to criminal charges relating to a massive litigation scheme involving water overbilling lawsuits the city's lawyers secretly controlled from both sides.

Responding to Peters pleading guilty, City Attorney Mike Feuer, who has denied knowing about the scheme, said he is "furious" that someone he hired would betray his office and the public's trust.

"I am furious and disappointed beyond words that someone I hired and placed faith in would commit this breach of trust -- of the public, of my office and of me personally," Feuer said in an email. "Nearly three years ago I asked for and received the resignation of this individual because of unrelated past conduct, but at no time until today was I aware of Mr. Peters' illegal actions."

"The fact remains that I hired Mr. Peters and put him in a position of great responsibility. I own that choice," Feuer continued. "As with every decision in my office, the buck stops with me. Now it is my responsibility to lead our office, with hundreds of dedicated public servants, to continue to be a force for good in our city."

The lawsuit at the center of several investigations was filed in 2015 by Los Angeles water customer Antwon Jones, who along with thousands of others, said he was overbilled by the largest utility in the nation in 2013. Configured and implemented by PricewaterhouseCoopers LLP, the system allegedly overbilled more than 1 million ratepayers. Antwon Jones v. City of Los Angeles, BC577267 (L.A. Sup. Ct., April 1, 2015).

The Jones class and the city reached a $67 million settlement shortly after the suit was filed. However, after it was revealed that the lawyer the city hired to sue PwC over the billing fiasco in a separate suit secretly drafted the Jones suit before it settled in record time and without discovery, the FBI raided Feuer's office, the utility office and the offices of at least two outside attorneys working for the city.

The investigations found city-hired attorneys Paul O. Paradis of the New York law firm Paradis Law Group and Beverly Hills attorney Paul Kiesel drafted and handed off the Jones complaint to hand-picked opposing counsel, Ohio lawyer Jack Landskroner. Landskroner, who died in June, and other class counsel, received $19 million in attorney fees in 2015 without doing much, if any, work on the Jones case, according to the DOJ.

However, according to Monday's announcement, one of Kiesel's employees threatened to reveal the litigation scheme if she was not paid $1 million.

"Peters learned from Paradis that a former longtime employee of Kiesel's -- identified in court documents as 'Person A' -- had stolen or improperly retained from Kiesel's law firm certain documents that would show the city's undisclosed collusion with the Ohio attorney in the Jones v. City lawsuit," the DOJ announcement reads. "Person A had threatened to reveal the documents if Kiesel did not pay her to return them."

Peters, who used to work with Person A at Kiesel's law firm, understood that she had demanded payment of more than $1 million and had threatened to appear at a hearing in the city's lawsuit against PwC to reveal documents relating to the litigation scheme, the DOJ said. Peters knew these documents would lead PwC to discover the undisclosed collusive origins of the Jones v. City case, which would be damaging both to the city's litigation position and to the reputation of the city attorney's office, the DOJ said.

"On November 17, 2017, Peters met with Kiesel, Paradis and Paradis' law partner to discuss Person A's threats," the DOJ's announcement read. "During this meeting, Peters ordered Kiesel to pay Person A's monetary demands -- if necessary -- or potentially be fired as the city's special counsel in the PwC litigation."

Kiesel eventually paid Person A $800,000, the DOJ said. However, according to his plea agreement, Peters continued to conceal the extortion and collusion by intentionally not telling investigators that Kiesel paid her. Peters also concealed that he had, "directed Kiesel to satisfy Person A's monetary demands or be fired as special counsel, and that Peters had discussed the situation with and received direction from senior members of the City Attorney's Office," the DOJ said.

Along with Peters and Paradis, DOJ prosecutors have secured plea agreements from David H. Wright, the utility's former general manager, and David F. Alexander, a former senior official at the utility.