A $4 billion sexual-abuse settlement between Los Angeles County and thousands of former youth detainees is under review after a Los Angeles Times report found that recruiters working on behalf of Downtown LA Law Group allegedly paid individuals to file claims, some even providing scripts or encouraging people to invent allegations while they waited in line at a County social services office.
The settlement, reached in April, has led lead counsel to bring in retired Los Angeles Superior Court Supervising Judge Daniel Buckley, now a mediator with Signature Resolution, to review roughly 2,500 claims tied to Downtown LA Law Group after the allegations surfaced publicly.
“Nobody told me they were doing that,” said attorney Patrick McNicholas, who helped negotiate the settlement. He said some individuals who were paid “might have legitimate claims,” while others “could warrant ethical or criminal violations.” He described the case’s “review process,” “screening,” and “guardrails” as “really, really significant,” and said the reported conduct made the firm “the bad actor.”
The reports have triggered formal complaints. Los Angeles County Counsel Dawyn Harrison and the Consumer Attorneys of California both sent letters to the State Bar of California urging an investigation into potential fraud. Harrison called the allegations “absolutely outrageous,” saying the conduct “undermines our justice system” and “deprives legitimate claimants of just compensation.”
Harrison also warned about attorney advertising practices, noting that billboards once used to solicit AB 218 claims are now appearing in connection with lawsuits from the January 2025 wildfires. “We cannot allow fraud and attorney misconduct to further victimize the county and its taxpayers,” she wrote.
Attorney John Manly of Manly, Stewart & Finaldi, whose clients opted out of the $4 billion settlement, has been critical of how the County handled the process. “I find that troubling on a whole bunch of different levels,” he said. “A lot of people smell corruption. Without saying there is corruption, it certainly smells like it.” Manly and two other firms recently secured a separate $828 million agreement with the County resolving more than 400 sex-abuse claims.
Manly said he warned lead counsel a year earlier that filing a false claim against a public entity is a felony and expressed concern about the volume of filings. “Many [filings were] procured by mass advertising by law firms, looking at these cases as a way to make money,” he said. “And there’s nothing wrong with getting your fee. What is wrong is treating this like it’s a car crash case or Hertz overcharged you a fee and filing a class action.”
He also condemned the alleged recruitment practices described in the Times report. “When you or your representatives are at a welfare office signing up people, it’s not only despicable and unethical, but it tells everybody in the public that you’re a dirty, low-down ambulance chaser,” he said. He criticized private-equity-backed firms for settling “incredibly valuable sex abuse cases, where children were raped,” for “pennies on the dollar.”
County officials said both mass settlements require plaintiffs to provide factual summaries of alleged abuse and that attorneys known to offer payments to solicit clients may be referred to the State Bar. It remains unclear how many of the claims tied to Downtown LA Law Group will withstand the review.
McNicholas said the added oversight will not delay legitimate compensation. “This is not going to slow down the distribution process for those who are truly harmed by the county’s conduct,” he said. “Is it unusual, when you have this many mass tort claimants, that outliers submit fraudulent claims? No.” He added that safeguards are standard, noting that the Times report was “very helpful” in identifying conduct that can now be investigated more directly.
Manly, Stewart & Finaldi is the nation’s leading firm representing victims of sexual abuse by government agencies, physicians, Universities, school districts, churches, and sports organizations. They are the lead attorneys representing victims of former Olympic Team doctor Larry Nassar and secured $880 million in settlements. They were the lead attorneys representing victims of former USC gynecologist George Tyndall resulting in an historic $852 million settlement. They represented victims in the $660 million settlement with the Los Angeles Archdioceses in 2007 and more than $700 million in settlement against Catholic entities throughout the United States. They were the lead attorneys in a $140 million settlement with LA Unified School District in the Miramonte cases. The firm has successfully recovered more than 3 billion dollars for its clients through jury verdicts and settlements.
