Greenberg Traurig is fighting former Jack Abramoff business partner Michael Scanlon's effort to block the firm from collecting tens of millions of dollars from him for his role in a fraud conspiracy that bilked a group of Native-American tribes.
Scanlon's lawyers this month filed court papers in Washington’s federal trial court saying Greenberg Traurig, which paid millions to the tribes that were victims in the kickback scheme, is not entitled to reimbursement from Scanlon. The firm’s payments settled threatened or pending litigation.
Scanlon’s lawyers, including Ropes & Gray partner Stephen Braga, allege Greenberg Traurig is a liable party and that it is barred from seeking restitution from Scanlon. In February, a federal judge in Washington sentenced Scanlon to 20 months in prison for his role in the scheme. The judge, Ellen Segal Huvelle, ordered Scanlon to pay Greenberg Traurig nearly $17.7 million in restitution.
Last night, the Williams & Connolly lawyers representing Greenberg Traurig said Scanlon should not be permitted to keep the proceeds from his crimes. The attorneys for the firm, including partner Kevin Downey and associate Carl Metz, said Scanlon’s “unspoken goal” is to keep his money “while leaving others to compensate his victims.”
Greenberg Traurig’s attorneys said Scanlon has failed to justify what would amount to an “extraordinary hearing” on the issue of the firm’s demand for compensation. Downey said in court papers (PDF) that Scanlon hasn’t shown how Greenberg Traurig is complicit in his crime. Scanlon, the firm’s lawyers said, “leaves to the imagination” how the firm may be liable.
“The motion is silent on that issue, leaving Mr. Scanlon in the position of asking the court to convene an unprecedented hearing for the purpose of proving a set of facts that he refuses to reveal,” Downey (above) said. “There is simply no reason to indulge Mr. Scanlon on these issues any longer.”
Attorneys for Greenberg Traurig said Scanlon is trying to “invent a new procedure unsanctioned by any statute, case or rule of procedure, and to do so for the illicit purpose of attacking a third party’s conduct in an effort to keep the substantial proceeds of his fraud.”
Huvelle, a former Williams & Connolly partner, has now recused herself from the restitution dispute. Chief Judge Royce Lamberth recently picked up the proceedings. Lamberth has not ruled on whether he will allow Scanlon’s reimbursement objection to go forward.