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.
He accepted 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.
U.S. District Judge Stanley Blumenfeld Jr. sentenced Paul O. Paradis, 60, of Scottsdale, Arizona, who once ran the Manhattan-based Paradis Law Group.
At Tuesday’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.
(News Report a Year Ago)
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 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 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 to conceal 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 the secret deal, Paradis promised to make Wright Aventador’s future CEO and give him a $1 million annual salary and a luxury car.
When 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 was also unaware that Wright was advocating for awarding the $30 million no-bid contract to Paradis’s company because he had been bribed.
Paradis plead guilty to a cooperation plea agreement that requires Paradis to provide information to federal investigators and the State Bar of California, which is conducting its disciplinary investigation related to the collusive litigation scheme, in exchange for potential sentencing consideration.
Federal prosecutors said Paradis’ cooperation helped secure the guilty pleas of the following defendants:
- Wright, who also pleaded guilty to bribery
- Thomas H. Peters, the former litigation chief of the City Attorney’s Office, pleaded guilty to extortion in connection with covering up the collusive litigation
- David F. Alexander, LADWP’s former Chief Information Security Officer, pleaded guilty to lying to the FBI about bribery-related conversations with Paradis.
In court papers and at Tuesday’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.
(News Report Four Years Ago)
Assistant U.S. Attorneys J. Jamari Buxton and Susan S. Har of the Public Corruption and Civil Rights Section prosecuted this case.