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Insiders Continue to Abandon Fraud Scheme Against Chevron

Date: Feb 26, 2015

Fraud-by-the-numbers-17-insidersChevron’s settlement agreement with James Russell DeLeon, the principal financial backer of the fraudulent case against Chevron in Ecuador, marks the 19th ally of Steven Donziger, the lawyer behind the lawsuit against the company, to abandon his scheme.

DeLeon, a law school friend of Donziger’s, withdrew from the litigation after investing $23 million, agreeing to turn over to Chevron his 7 percent stake in the $9.5 billion Ecuadorian judgment. He’s just the latest defector.

Since 2010, a variety of former investors, lawyers, scientific consultants, Ecuadorian court officials and other allies have disassociated themselves from what the Wall Street Journal has called “the greatest legal fraud in history.”

Among those with stakes in the judgment who preceded DeLeon in abandoning Donziger’s scheme are:

  • Patton Boggs LLP — In May, 2014, Chevron announced its settlement with the Washington D.C. lobbying and law firm, which withdrew from the litigation, issued a statement of regret and assigned its interest in the litigation to Chevron. It also agreed to pay Chevron $15 million.
  • Burford Capital Ltd. – In April, 2013, Burford announced it had terminated its litigation financing agreement in connection with the Ecuador case on the basis that it had been “fraudulently misled.” It renounced any interest in the litigation.

Many of the desertions came over the course of Chevron’s fraud and racketeering lawsuit against Donziger and his team, where the company uncovered a trove of evidence that the Ecuadorian case had been corrupted – including hundreds of hours of video outtakes, thousands of emails, draft reports and sworn depositions. During the RICO trial against Donziger in late 2013, 17 former associates and insiders testified against him, including former co-counsel, scientific consultants and even a former judge. Some of those to testify included:

  • David Russell – The former head of Donziger’s technical team said he was misled and pressured by Donziger to provide vastly exaggerated environmental damage assessment – a “scientific wild-ass guess,” or SWAG, he called it – to wield as a public relations weapon to force the company into a settlement.
  • Jeffrey Shinder – The New York-based lawyer quit Donziger’s team after learning the extent of the fraud perpetrated in the Ecuadorian case. “It made me sick,” he said. “I wanted no part of it.”
  • Alberto Guerra – A former Ecuadorian judge, Guerra testified he was paid by Donziger and his Ecuadorian associates to ghostwrite court orders steering the case in their favor, then arranged a $500,000 bribe of the presiding judge and helped ghostwrite the $9.5 billion judgment
  • Stratus Consulting – Stratus Consulting of Colorado admitted that two of its environmental consultants, Doug Beltman and Anne Maest, led a team of technical experts in ghostwriting a court report on behalf of a court appointee. The report, which alleged Chevron was responsible for $27 billion in damages, was used as the basis for the fraudulent Ecuadorian judgment against the company. Both Beltman and Maest admitted under oath that the report had no scientific or technical basis.

On March 4, 2014, Judge Lewis Kaplan of the U.S. District Court for the Southern District of New York ruled that the Ecuadorian judgment against Chevron was the product of fraud and racketeering activity, finding that the Ecuadorian judgment against Chevron is unenforceable in the United States.

While many have already severed ties to Donziger, Chevron has vowed to continue efforts to hold accountable those who further this fraudulent scheme.

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