Greenberg Traurig should not be allowed to collect tens of millions of dollars from former Jack Abramoff business associate Michael Scanlon, who pleaded guilty to participating in a scheme that defrauded a group of Native American tribes, a lawyer for Scanlon said today.
Scanlon's defense attorneys last month first raised a potential objection to Greenberg’s demand that Scanlon, a former public relations specialist in Washington, pay more than $17 million to cover the firm’s losses in compensating victims of the scheme.
Today, the defense lawyers urged a judge to determine that Scanlon can pursue his objection. If the judge agrees, Scanlon still has to show that Greenberg is liable and therefore blocked from receiving restitution.
Greenberg, represented by Williams & Connolly, has settled actual and threatened litigation stemming from a lucrative kickback scheme in which Scanlon and Abramoff participated. Judge Ellen Segal Huvelle of Washington’s federal trial court last month sentenced Scanlon to 20 months in prison.
In sentencing Scanlon, Huvelle also ordered him to pay Greenberg for its losses unless he can establish that Greenberg is not entitled to compensation because of the firm’s liability in the conduct for which Scanlon pleaded guilty.
The Justice Department has not taken a position on whether Greenberg is entitled to compensation from Scanlon.
Greenberg’s lawyers said in court papers last month that Greenberg did not condone or support Scanlon’s “reprehensible misconduct.” No federal law allows Scanlon to keep money derived from his crimes, the firm’s attorneys said.
Scanlon’s defense attorneys, including Ropes & Gray partner Stephen Braga, said in court papers (PDF) filed today that Greenberg, a third-party that is potentially liable in the fraud scheme, is not entitled to reimbursement. Braga said the issue is a novel one in District of Columbia courts.
Last month, Huvelle, a former Williams & Connolly partner, said another judge will be assigned to hear the dispute because of her prior employment at the firm representing Greenberg. A new judge was not immediately assigned today.