Lawyer Involved in $2.2 Million Kickback Litigation Scheme Jailed

A former New York lawyer who was involved in a LADWP corrupt litigation scheme has been jailed for almost three years for accepting $2.2 million in kickbacks and involving a collusive lawsuit against the city of Los Angeles. Paul Paradis represented the City in the cases which involved massive conflict of interest and which the sentencing judge said involved "mind boggling" corruption. Former New York Lawyer Sentenced to Nearly 3 Years in Prison for Accepting $2.2 Million Kickback in LADWP Corrupt Litigation Scheme LOS ANGELES – A disbarred New York City lawyer, who simultaneously represented the Los Angeles Department of Water and Power (LADWP) and a ratepayer suing the City of Los Angeles in the wake of an LADWP billing debacle, was sentenced today to 33 months in federal prison for accepting a kickback of nearly $2.2 million for causing another lawyer to purportedly represent his ratepayer client in a collusive lawsuit against the city, which enabled the city to settle the case on favorable terms. Paul O. Paradis, 60, of Scottsdale, Arizona, who once ran the Manhattan-based Paradis Law Group, was sentenced by United States District Judge Stanley Blumenfeld Jr. At today’s hearing, Judge Blumenfeld said Paradis intentionally placed himself “at the center of sophisticated and greedy schemes of corruption that wreaked havoc on individuals and institutions alike.” Judge Blumenfeld further explained that Paradis was motivated by “pure greed” and said the level of corruption in the case was “mind-boggling.” Paradis pleaded guilty in January 2022 to one count of bribery. In 2013, LADWP implemented a new billing system that it had procured from an outside vendor, PricewaterhouseCoopers (PwC). After LADWP rolled out the new system, hundreds of thousands of LADWP ratepayers received massively inflated and otherwise inaccurate utility bills. Soon afterward, the city and LADWP faced multiple class-action lawsuits filed by ratepayers alleging harm resulting from the faulty billing system. In December 2014, the Los Angeles City Attorney’s Office retained Paradis as special counsel to represent the city in a lawsuit against PwC. When Paradis began representing the city as special counsel in the PwC litigation, the Los Angeles City Attorney’s Office was aware that he was simultaneously representing Antwon Jones, a ratepayer who had a claim against LADWP arising from billing overcharges. Jones was unaware that his lawyer, Paradis, also represented his intended adversary. At a February 2015 meeting with at least one senior member of the City Attorney’s Office, Paradis was authorized and directed to find counsel that would be friendly to the city to supposedly represent Jones in a class-action lawsuit against the city. Under this so-called “white knight” strategy, the forthcoming Jones v. City of Los Angeles lawsuit would be used as a vehicle to settle all existing LADWP-billing-related claims against the city on the city’s desired terms. Soon thereafter, Paradis recruited an Ohio lawyer to nominally represent Jones in the white knight lawsuit with the understanding that Paradis would do virtually all the work. In exchange, and unbeknownst to the city, Paradis and the Ohio lawyer agreed that Paradis would receive 20% of the Ohio lawyer’s fees in the Jones v. City case as a secret kickback. In July 2017, a Los Angeles Superior Court judge issued a final approval of the $67 million settlement agreed to by the parties in Jones v. City , including approximately $19 million in plaintiffs’ attorney fees, of which the Ohio lawyer and his law firm obtained approximately $10.3 million. The Ohio lawyer then secretly paid $2,175,000 to Paradis, disguising the kickback as a real estate investment, and funneling it through shell companies that Paradis and the Ohio lawyer had set up exclusively for the purpose of transmitting and concealing the illicit payment. Paradis also admitted bribing LADWP’s general manager, David H. Wright, to obtain a lucrative $30 million no-bid contract in June 2017 to remediate LADWP’s billing system. In another secret deal, Wright lobbied the LADWP Board to approve the contract for Aventador Utility Solutions, a downtown Los Angeles-based cyber services company formed by Paradis, in exchange for Paradis’ promise to make Wright Aventador’s future CEO and give him a $1 million annual salary and luxury car. At the time it approved the no-bid contract, the LADWP Board was not informed that Paradis had ghostwritten a May 2017 independent monitor report on the Jones v. City settlement on which LADWP based its decision. The Paradis-written report claimed that LADWP could not meet its obligations under the Jones v. City settlement agreement unless it contracted with Aventador. The LADWP Board also was unaware that Wright was advocating for the award of the $30 million no-bid contract to Paradis’s company because he had been bribed. Paradis pled guilty to a cooperation plea agreement that requires Paradis to provide information to federal investigators as well as to the State Bar of California, which is conducting its own disciplinary investigation related to the collusive litigation scheme, in exchange for potential sentencing consideration. Federal prosecutors said Paradis’ cooperation helped to secure the guilty pleas of Wright, who also pleaded guilty to bribery, Thomas H. Peters, the former litigation chief of the City Attorney’s Office, who pleaded guilty to extortion in connection with covering up the collusive litigation, and David F. Alexander, LADWP’s former Chief Information Security Officer, who pleaded guilty to lying to the FBI about bribery-related conversations with Paradis. In court papers and at today’s hearing, federal prosecutors recommended a sentence of 18 months’ imprisonment based on Paradis’ cooperation with the federal and State Bar of California investigations. Judge Blumenfeld acknowledged the basis for the government’s recommendation but stated a higher sentence was necessary to account for Paradis’ conduct, which Judge Blumenfeld said, “shattered public confidence in the government and legal profession.” Wright and Alexander are serving federal prison sentences of six years and four years, respectively, after pleading guilty to felony offenses in this case. Peters was sentenced to probation. The FBI investigated this matter. Assistant United States Attorneys J. Jamari Buxton and Susan S. Har of the Public Corruption and Civil Rights Section prosecuted this case.

Lawyer Involved in $2.2 Million Kickback Litigation Scheme Jailed

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