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Chip Drago
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Firing back: Ex-partner says law firm itself an ongoing criminal enterprise

By Chip Drago
Mobile Bay Times
An indicted Louisiana lawyer has counter-attacked against his ex-partners, claiming they engineered his indictment to shield their use of a prominent New Orleans-headquartered regional law firm as a base for an organized criminal enterprise.

James G. Perdigao filed the suit recently in federal court in New Orleans against Adams Reese and eight senior members under the federal RICO (Racketeering Influenced and Corrupt Organization) Act asserting that the band of lawyers' stock in trade was fraud, bribery, extortion, obstruction of justice, witness tampering and money laundering.

Managing partners dissuaded their younger colleagues from ethical and even lawful conduct if the loss of big foot clients and their lucrative business was at stake, charged Perdigao who himself faces gulp-inducing charges of criminal wrongdoing.

In 2004, a federal grand jury named the 47-year-old lawyer in a 59-count indictment for mail fraud, bank fraud, tax evasion, filing false tax returns, money laundering and transportation of stolen funds. The charges carry up to 1,023 years in prison and fines and forfeitures of $30 million. Perdigao has cooperated with federal authorities in the past, including the prosecution of former Louisiana Gov. Edwin Edwards who was found guilty in a bribery case largely on the testimony of Robert Guidry, a client of Adams Reese and a principal in Treasure Chest Casino among many other holdings.      

Perdigao's legal specialty was gambling law and the representation of casinos and their owners. During one week in October, 2004, Perdigao wired nearly $20 million to a Swiss bank account that he controlled in Zurich, Switzerland, according to the indictment.

There was, however, more than one bad apple in the Adams Reese barrel, to hear Perdigao tell it.

Among his allegations against the firm and the lawyers were:






Adams Reese dismissed Perdigao’s lawsuit in a statement that referred to his allegations as "... the latest episode in Perdigao’s continuing fantasy of blaming the government and our firm for his wrongdoing and lashing out at those who are holding him accountable for his actions. Adams and Reese denies Perdigao’s allegations of wrongdoing. We look forward to his upcoming criminal trial and we will continue to cooperate with the U.S. attorney and the FBI to ensure that justice is done."

Perdigao's witness list could hardly be more hostile, legal veterans agree.

Among the figures mentioned in Perdigao's 73-page complaint are Edwards, Guidry (and family members), Congressman Jefferson, his brother Mose Jefferson, U.S. Attorney Jim Letten, Cleo Fields, World Com's Ebbers, former New Orleans Mayor Marc Morial, ex-U.S. Attorney Jordan, former Attorney General Dick Thornburgh, Louisiana state officials and scores of others.

Defendants, in addition to the Adams Reese law firm, are Charles P. Adams, Jr., B. Jeffrey Brooks, Edwin C. Laizer, Paul Lassalle, Thomas G. O'Brien, Mark J. Spansel, Martin A. Stern and Robert A. Vosbein.

Although he claims to have protested Adams Reese's alleged disregard of ethics in its lust for fees, Perdigao nevertheless stayed with the firm for years despite his purported discomfort and implied threats, both financial and physical.

Perdigao's allegations date back more than 10 years when FBI agents searched the homes of Guidry, Edwards, the governor's son, Stephen Edwards, and their associates. Guidry was the the majority owner of the Treasure Chest Casino in Kenner and a confidante of Vosbein and  Louis Wilson, also of Adams Reese, according to Perdigao. A multi-millionaire, Guidry required a wide range of legal needs and generated big fees for Adams Reese, according to Perdigao.

Guidry was frantic to know the direction of the FBI investigation, according to Perdigao, and so concerned as to ask Perdiago to consult with Vosbein and others at Adams Reese on how best to hide his money and "get to" the U.S. attorney (Jordan). Vosbein shrugged off Perdigao's concerns, saying Guidry would rather go to prison than take a big financial whack but in any event Guidry was an old hand at emerging unscathed from such legal firefights, according to Perdigao. As for Guidry's request, the congressman (Jefferson) would be the best conduit for bribing Jordan, Vosbein noted, Perdigao contends. While Perdigao continued to counsel against bribing federal authorities, Wilson marveled at Guidry's "balls of steel" in the face of impending indictment, the suit alleges. "Estate planning" was deemed the best disguise for Guidry's money, the suit alleges. Perdigao was told to stifle his objections or, said Vosbein, "you'll be out of here in a heartbeat," the suit contends.

According to the suit, Guidry said he could outspend all "those m-----f-----s," including the governor, who were also federal targets so he planned to employ his ace in the hole, in this instance his "ace of spades," the congressman who would get the payoff to Jordan.

The federal grand jury was also looking at Guidry and his marine companies for income tax violations. Guidry had apparently been cashing checks totaling more than $1 million a year for several years. Guidry had maintained that he had extensive gambling losses and winnings through the years, but finally decided that funds from the cashed checks were actually extortion payments to Edwards.

Not long before this, Perdigao had been made a partner in the firm and appointed as the ethics advisor for the business division. Perdigao claimed that he routinely worked 14-16 hour days and far exceeded the firm's production goals. Because of his expertise in gambling law, Perdigao had developed relationships with federal lawyers and in fact had assisted the government with information about the licensing and regulation of riverboat gambling, a role that might lead him to the witness stand as an expert for the government. A furious Vosbein stormed that Perdigao worked for him and he and the firm would tell Perdigao if, when and how he could testify, the suit alleges.             

Meeting with Guidry in the spring of 1998 in the penthouse above the businessman's offices in Harvey, La., Perdigao learned that the bribing of Jordan through Jefferson was proceeding well, according to Perdigao. Guidry led him to a bathroom, lifted some tiles and filled a bag with some of the cash that had been hidden in the cavity, according to Perdigao. Guidry said he never put the money directly in Jefferson's hands, but instead slid it under the back steps at Jefferson's residence while the congressman watched from inside, the suit relates. According to Perdigao, Guidry told him of the first "drop" when he appeared behind Jefferson's house in New Orleans and discovered two sets of steps. Jefferson spotted Guidry's confusion and pointed him toward a planter at the correct set of stairs while both men "cracked up laughing," the suit claims.

These revelations made Perdigao nervous, he notes.

Instead of distancing themselves and the firm from Guidry, Vosbein advised Perdigao to accompany Guidry on his next "drop," according to Perdigao.

"If you do, take it from me, you will have a multi-million dollar client for life," Vosbein allegedly told Perdiago, according to paragraph 13 of the complaint. Furthermore, Vosbein said Perdigao would never practice law again if he ratted out Guidry, possibly because "down the bayou, they resolve disputes differently than we do," the suit alleges.

Perdigao piped down for a time and plugged away in "an atmosphere of hostile intimidation," the suit states.

In 1998, Guidry became concerned that Jefferson might "be playing him," according to Perdigao. Guidry said a "big push" was in order to solidify their position with Jefferson who planned to run for governor, the suit contends, and various contributions to Jefferson were arranged from many Guidry's, their relatives, lawyers and friends.

Guidry grew "supremely confidant" that his toil would bear favorable plea negotiations capping his financial exposure at great savings to him, according to Perdigao. Perdigao and others at Adams Reese thought Guidry guilty of  "sheer lunacy." To his lawyers' great surprise and to the consternation of the FBI and some federal prosecutors, Guidry did indeed obtain a plea bargain capping his financial exposure at $3.5 million. According to the suit, Guidry was more matter-of-fact, observing that he had simply gotten what he paid for.

Guidry continued to enjoy residual benefits from his dealings with the federal prosecutors, according to Perdigao's lawsuit, as federal authorities, in state litigation against Guidry for allegedly ill-gotten riverboat casino profits, testified that his plea bargain included civil immunity despite there being no reference to civil immunity in the written plea agreement. Ultimately, the state civil case was removed to federal court where it was dismissed and all claims against Guidry's profits died.

Further, as part of the firm's efforts to shield Guidry's assets from the government's grasping hands, Reese and Adams agreed to help Guidry move several million dollars offshore, Perdigao alleges. Vosbein asked Perdigao to tally up any potential federal criminal hits in connection with the plan, the suit charges. After a little research, Perdigao reported to Vosbein that tax crimes, money laundering, conspiracy, mail and wire fraud, RICO, etc. were among the frailties in their plan, according to the lawsuit. Perdiago went so far as to call the plan "a terrible idea and incredibly risky," he contends. Vosbein ordered the project forward, declaring the risk acceptable for a client who had been one of the firm's three biggest clients for at least 10 years, according to the lawsuit.

In a dither, Perdigao sought out the firm's chief ethics/claims counsel who sized up the situation as Vosbein's call, the suit alleges. Others at the firm told Perdigao he would be well served to whistle Dixie and move along, the suit charges.      

The firm also played a role in the demise of Bernie Ebbers and WorldCom whose failure represented the largest bankruptcy and arguably the the biggest corporate fraud in U.S. history as shareholders and creditors lost billions of dollars, the lawsuit relates.

Chuck Adams had brought Ebbers and WorldCom to Adams Reese. The representation of Ebbers also included his personal investments and large commercial transactions, such as the 500,000-acre Douglas Lake Ranch in Canada, a very large timber farm called Joshua Holdings, a sawmill, a shipyard and yacht sale business in Georgia. Adams and Reese made lots of money representing Ebbers and WorldCom, Perdigao notes.

As WorldCom tanked and Ebbers' holdings were collateralized with WorldCom stock, Ebbers' personal financial situation worsened. The firm continually propped up Ebbers at the expense of WorldCom and its shareholders without disclosing its possible conflict of interest, according to the lawsuit. The lawsuit further contends that Adams Reese falsely minimized its role in the WorldCom debacle by altering and structuring evidence to put the blame on WorldCom's accounting firm. Perdigao's objections led to a negative annual evaluation and the loss of revenue, he states.

Other Reese Adams' schemes involved the courting and hiring of ex-elected officials and government regulators, including Morial, Jefferson Parish President Tim Coulon, former Louisiana Insurance Commissioner Robert Wooley, their relatives, political associates and others, to unethically use their influence to win business for the firm, the suit alleges.

The allegations involving Wooley reflect the Adams Reese approach to developing government business in Perdiago's view.

Wooley joined the Louisiana Department of Insurance in 1999 as former Commissioner Jim Brown's chief deputy. Wooley took over as acting commissioner in the fall of 2000 when Brown was convicted of lying to an FBI agent.

Perdigao claims Adams Reese began recruiting Wooley in late 2001. In 2002, Wooley submitted a business plan listing a number of insurance companies that he believed he could bring to Adams Reese as clients, Perdigao alleges.

Adams Reese proposed posting a "low-key grinder" to front for Wooley during the two years when he would ostensibly be prohibited from representing insurance companies before the commission, Perdigao charges. Perdigao suggested that the firm get an ethics opinion on the firm's plan to use Wooley openly as a legislative lobbyist but the firm did not want to risk an adverse ruling, Perdigao alleged.

"Notably absent from Wooley's list of potential clients in his business plan was a 'big fish' that was not already a client of the firm," Perdigao states.

Adams Reese already represented State Farm, the largest homeowners' insurer in the state. According to the lawsuit, Wooley was directed to develop Allstate Insurance Company as a prospect. Allstate had about 220,000 customers or about 20 percent of the homeowners' market.

Wooley won election to a full term in 2003.

Consistent with the advice and directives of the firm, Wooley helped enact a measure that allowed the insurance companies to hike rates by up to 10 percent without first getting approval from the Louisiana Insurance Rating Commission, according to the lawsuit.

"This so-called 'flex-band' initiative promoted by Commissioner Wooley was a gift to insurers at the expense of Louisiana consumers," Perdigao charges.

Wooley was also the leading architect of the Louisiana Citizens Property Insurance Corporation which released insurance companies from liability as the state's insurer of last resort, the lawsuit contends. Before creation of LCPIC, certain losses were paid pro-rata by insurance companies based upon their percentage of business. Prior law didn't allow insurance companies to pass on their losses to policyholders, but allowed them to go before the Insurance Rating Commission for higher rates. According to Perdigao, the IRC rarely approved rate increases. The new procedure was a boon to insurance companies, according to Perdigao.

Perdigao said he again objected to the hiring of Wooley, much as he had the hirings of Morial, Coulon and others on the grounds that it was an unethical subterfuge.

Just before Wooley resigned from the commission in February, 2006, Allstate told him the company wanted to drop wind and hail coverage for its homeowners' insurance customers in coastal parishes across Louisiana unilaterally rather than through cancellation or non-renewal, the lawsuit states.

Just after leaving public service, with Wooley behind the scenes and firm lawyers up front, they advised LDOS that Allstate intended to cancel its wind and hail coverage on about 30,000 policyholders in 18 coastal parishes, the lawsuit relates. Almost simultaneously, Allstate announced record second quarter profits of $1.2 billion, the suit notes.

After the LDOS threatened to sue Allstate to prevent it from abandoning the 30,000 policyholders, Adams Reese defended the firm in connection with its "drive-by" inspection of properties in storm-prone areas. Allstate reputedly performed "drive-by" inspections of 40,000 homes in the New Orleans averaging less than one minute per home. LDOS forced Allstate to cease the "drive-by" inspections.

"Meanwhile Allstate reported a record $5 billion profit for 2006 and sponsored the Sugar Bowl, the area's premier sporting event, all while using Wooley and the firm to unlawfully dump its customers in the area," Perdigao charges.

Wooley continued to direct "an army of lawyers at the firm" in search of technicalities that would allow Allstate to dump longstanding customers in storm-prone areas, according to Perdigao. Earlier this year consumers in Louisiana complained that their wind and hail coverage was eliminated in an administrative switch from Allstate Insurance Co. to Allstate Indemnity Co. on a good credit discount that cost them their coverage against hurricanes, according to the lawsuit. LDOS fined Allstate $250,000, a negligible cost of business in an operation its size, the suit notes.

Perdigao's lawsuit also examines an alleged reinsurance wrinkle called ProtectingAmerica.Org. Certain storms can be so massive that claims can outstrip an insurance company's financial reserves. Generally, insurance companies buy reinsurance to cover claims above a certain level. However, in 2004, Allstate did not have reinsurance and it suffered heavy losses when four major storms struck Florida, according to Perdigao's suit. In 2005, when Hurricanes Katrina and Rita hit Louisiana, Allstate had bought private reinsurance in seven states, but Louisiana was not one of them.

That "misplaced bet" cost Allstate more than $3 billion in claims in Louisiana even though the company reported record profits. Still, in response to misjudging its reinsurance needs, Allstate "formed a fronting non-profit group called ProtectingAmerica.Org" to lobby for government-backed catastrophe funds and to promote the concept in catastrophe-prone areas, the lawsuit alleges.

Paragon Strategic Solutions updated a study that it had first drafted in 2003 for then-Insurance Commissioner Wooley, the suit states. The Louisiana Recovery Authority in March 2007 advanced the revised study which called for the state to take over some claims from a hurricane when they reached $1.25 billion in the event the state created a state-run catastrophe fund, according to Perdigao.

Wooley, as an employee of Adams Reese, was engaged by ProtectingAmerica.Org to lobby for the creation of a state-run catastrophe fund -- "a classic example of a regulator leaving government service to impermissibly lobby for one of the companies he previously regulated on the very issue he was working on when he left office," Perdigao charged.

"The catastrophe funds dupe people in buying coverage twice," Perdigao alleges. "Customers think they have bought insurance, but when a disaster strikes they discover that their policies did not really include the cost of reinsurance. They now have to worry about paying for reinsurance through surcharges for the rest of their lives."

The "cat fund" served to concentrate risk in one state and one program rather than dispersing it throughout the global financial markets, Perdigao points out. The assessments to replenish the fund would pound property at exactly the time they were trying to recover from a disaster.

Perdigao's contrary attitude to these and other acclivities of the firm continued to earn him the scorn of his partners, he claims.

His detractors within the firm orchestrated his resignation, according to Perdigao, by concocting a story that his entrepreneurial activities were not authorized. Having extorted his departure from the firm, the lawyers then sought to impeach him with federal authorities and the state bar, Perdigao claimed. They failed to convey to those outside the firm that "billing irregularities, such as the use of ghost hours, dummy or phantom invoices, value-billing, transferring billable time to non-billable files, etc. were permissible and pervasive throughout the firm," the lawsuit alleges.

According to Perdigao, Adams Reese attorneys held interests in riverboat casinos, slot machine distributorships, consulting firms, oil and gas working interests, drilling partnerships, professional baseball teams, professional hockey teams, professional soccer teams, film tax credit brokerages, waste disposal facilities in Angola (Africa) and numerous other ventures.

The defendants persisted in an unrelenting campaign to assassinate his character, according to Perdigao.

They were especially chagrined to learn that information and documents that Perdigao had provided to federal authorities survived Hurricane Katrina despite massive damage to the FBI's offices on the lakefront, according to Perdigao.

In 2006, Perdigao claims he became aware that "sensitive and confidential" information that he was supplying to the government was being leaked back to Adams Reese. On Dec. 8, 2006, a messenger advised Perdigao "to shut his mouth" or suffer the consequences, Perdigao claims.

Just before that threat, Perdigao says he encountered Vosbein in a parking lot and that Vosbein said he would withdraw the firm's position that Perdigao's entrepreneurial activities had not been approved and authorized if Perdigao would "stop ratting on Vosbein and the other defendants and stop cooperating with the government." When Perdigao declined, an angry Vosbein remarked, "the snitch usually ends up in the ditch," Perdigao claims.

According to the lawsuit, Vosbein told Perdigao that he was "too naive to see that the fix was already in," that the federal prosecutors would never jeopardize the Edwards' conviction.

Four days later, Perdigao was sprayed with gunfire in front of his residence, he claims. Shaken but unharmed, Perdigao called 911 and filed a police report, yet the U.S. Attorney took no steps to investigate the attempted murder despite his cooperation with them for more than two years, according to Perdigao.

Perdigao argues that federal prosecutors conspired with the Adams Reese defendants to discredit him in order to protect the Edwards' conviction and to give Adams Reese "a pass" in exchange for walking away from any claim to Perdigao's seized assets, a large forfeiture for the government.

Perdigao requests a trial by jury. His attorneys are Robert H. Matthews and Pauline M. Warriner, both of New Orleans.
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