BP Finds New Fraud in Oil Spill Payouts

on Aug 6, 2013
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iNVEZZ.com, Tuesday, August 6th: BP Plc (LON:BP, NYSE:BP) has found new evidence of fraud and conflict of interest in the programme administering BP’s settlement claims related to the Gulf of Mexico oil spill in 2010. BP’s share price was little changed in New York yesterday and was marginally down in early trading in London today.

Reuters yesterday quoted BP as saying in a filing with the US District Court in New Orleans that it had learned in the past week that two of the lawyers reviewing appeals of disputed claims were partners at law firms representing claimants prior to the settlement programme, implying conflict of interest.
The company noted in the filing that it had also learned via its fraud hotline that a person working at a spill claims centre in Mobile, Alabama, had helped people submit fraudulent claims in exchange for a share of the settlement amounts.

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“BP should not have to face the substantial risk of irreparable harm from improper payments,” the oil explorer said, as quoted by the newswire.

BP had previously tried to persuade a judge to temporarily halt payments, claiming that the agreement reached with victims’ lawyers in 2012 was being misinterpreted by the court-appointed claims administrator Patrick Juneau who was allowing businesses to receive payouts for economic losses not directly tied to the spill.
“As has been the case since day one, we have investigated all allegations brought to our attention, and until our investigation is complete, we will not and should not comment,” Reuters quoted Juneau as saying in an e-mail following BP’s latest filing.

!m[Company Cites Conflict of Interest](/uploads/story/4588/thumbs/pic1_inline.jpg)
In July, the District Court appointed Louis Freeh, a former director of the Federal Bureau of Investigation (FBI), to look into allegations by a lawyer who worked on Juneau’s staff. While BP had tried to halt payments until Freeh’s probe was completed, on July 19, US district judge Carl Barbier rejected BP’s request, saying that he had not seen any evidence of widespread fraud.

BP noted in the filing that temporarily halting the payments until Freeh finished his report would be a “modest relief” which would “slightly delay” payouts, now running at $93 million (£60.5 million) a week.
**Oil Spill Bill Swelling**
Last week BP said in its second-quarter statement that it had increased its overall provision for the Gulf of Mexico oil spill to $42.4 billion (£27.6 billion) at the end of the quarter, up from $42.2 billion (£27.5 billion), reflecting an increase in provision for litigation. Within the overall charge, the provision taken for the settlement agreement with plaintiffs was increased by $1.4 billion to $9.6 billion, with $900 million allocated for additional claims, and $500 million for additional administration costs.
**BP’s share price was 0.22 percent down at 454.75p in London as of 08:28 BST on 6 August 2013.**
**In New York, BP’s share price closed 0.10 percent higher at $41.97 on August 5 but declined 0.05 percent to $41.95 in after-hours trading.**

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