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Crime Nov 08, 2023
The Department of Water and Power building in downtown Los Angeles. | Photo courtesy of Neon Tommy/Flickr (CC BY-SA 2.0)
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By Fred Shuster
A now-disbarred lawyer who simultaneously represented the Los Angeles Department of Water and Power and a ratepayer suing the city in the wake of a DWP billing debacle was sentenced Tuesday to almost three years behind bars for accepting a kickback of nearly $2.2 million.
Paul Paradis, 60, of Scottsdale, Arizona, who once ran the New York-based Paradis Law Group, was sentenced by U.S. District Judge Stanley Blumenfeld Jr., who ordered Paradis to surrender on Jan. 8 to begin serving his 33-month sentence.
Paradis will also serve three years of supervised release following his federal prison term and undergo court-ordered mental health counseling, the judge said.
Blumenfeld said Paradis intentionally placed himself “at the center of sophisticated and greedy schemes of corruption that wreaked havoc on individuals and institutions alike.” The judge 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 in Los Angeles federal court to one count of bribery.
The case stems from 2013, when the DWP implemented a new billing system it had procured from outside vendor PricewaterhouseCoopers. After the utility rolled out the new system, hundreds of thousands of ratepayers received massively inflated and otherwise inaccurate bills. Soon afterward, the city and DWP faced multiple class-action lawsuits filed by ratepayers alleging harm resulting from the faulty 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 in that litigation, the City Attorney’s Office was aware that he was simultaneously representing Antwon Jones, a ratepayer who had a claim against the DWP arising from billing overcharges. Jones was unaware that his lawyer, Paradis — who was playing both sides of the fence — also represented his intended adversary.
Shortly afterward, Paradis recruited an Ohio lawyer to nominally represent Jones in the collusive lawsuit with the understanding that Paradis would do virtually all the work. In exchange, and unknown 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 roughly $19 million in plaintiffs’ attorney fees, of which the Ohio lawyer and his law firm obtained $10.3 million. The Ohio lawyer then secretly paid $2.17 million 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.
Blumenfeld said Paradis was at the center of at least three other related bribery schemes and his cooperation resulted in a trio of convictions.
David Wright, the former general manager of the DWP, was sentenced in 2022 to six years in federal prison for bribery. Thomas Peters, a former senior official at the City Attorney’s Office, was sentenced in May to nine months of home detention for taking part in an extortion scheme tied to the billing debacle. David Alexander, the utility’s former chief information security officer and its former chief cyber risk officer, was sentenced last year to 48 months in federal prison for lying to the FBI about a secret business relationship with Paradis.
“I have not yet seen a level of cooperation more than I have seen in this case,” the judge said, adding that Paradis had shown “an extraordinary acceptance of responsibility.”
Paradis was the first defendant charged in the federal investigation into the city’s handling of the flawed DWP system and resulting litigation.
In a statement to the court, Paradis asked for “mercy” and accused former City Attorney Mike Feuer of lying to both the grand jury and investigators. Feuer has previously denied any wrongdoing in the case.
“I ruined my life and there is no excuse,” Paradis told the court. ” What I did was wrong and I accept the consequences. I’m a changed man, a broken man.”
In sentencing the defendant to two years and nine months in prison, the judge rejected the prosecution’s recommendation of 18 months and the defense request for a probationary term.
Blumenfeld said a multiyear prison sentence was necessary to account for Paradis’ conduct, which the judge said, “shattered public confidence in the government and legal profession.”
He added, “In this court’s view, too few people have been held accountable.”
Paradis is cooperating with the State Bar of California’s ongoing investigation related to the collusive litigation, according to court papers.
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