Indictment tells of alleged kickbacks

Six years ago, Brad Warner slipped into a coma after routine knee surgery for an old injury that the twice-decorated Orange County sheriff’s deputy suffered subduing a suspect. Sheriff Michael S. Carona joined the family at the hospital in a vigil that ended with Warner’s shocking death at age 46.

Even as Rosie Warner’s husband lay dying, and as tearful colleagues gathered at the deputy’s bedside, Carona urged her to hire Joseph Cavallo to file a malpractice lawsuit, according to people who were there.

During the week of the funeral, he introduced Cavallo to her as “the sheriff’s attorney,” deputies who witnessed the encounter said.

Two deputies said Rosie Warner was disappointed with the $340,000 settlement that Cavallo eventually obtained. They said the widow, an immigrant from the Philippines who has since died of cancer, was “naive” about the U.S. legal system and had felt compelled to take Carona’s advice.

“She asked me, ‘Why is Cavallo pushing me to try to settle this thing? I think it’s worth more,’ ” recalled one of the deputies, who requested anonymity because he feared retribution. “She was sick by then, and tired from the battle.”

Now, a federal indictment suggests that Carona had a darker motivation -- money -- in offering comfort and advice to Warner’s wife and two children.

The sheriff is accused of steering employees and their relatives to Cavallo. A portion of the $340,000, which some experts termed a relatively modest award, was funneled to Carona’s alleged co-conspirators, the indictment said. They include Debra Hoffman, an attorney identified in court documents as his mistress. She has been indicted along with the sheriff and his wife, Deborah Carona.

The kickback allegation is one of dozens detailed in the case against Carona, but it has sounded a particularly loud note of outrage among those who wore the badge with Warner.

“There’s just disgust,” said a 20-year department veteran, who asked not to be named because he feared retaliation. “I can’t imagine a cop making money off a dead cop. That’s the lowest.”

Prosecutors have not specified how the purported scheme came about, but sources with knowledge of the events told The Times that it was hammered out in a meeting at the sheriff’s office. Attending were Carona, Hoffman, Cavallo and then-assistant sheriffs Donald Haidl and George Jaramillo, the sources said.

Under what the indictment labeled a “referral agreement,” Carona and the others decided that Cavallo would kick back a share of any proceeds from cases the sheriff referred to him. The share was 25%, according to the sources. It was not immediately clear whether the percentage applied to Cavallo’s share of a settlement, or the entire award.

The indictment unsealed Tuesday accused Carona of engaging in a broad conspiracy to sell access to his office for tens of thousands of dollars and gifts such as a boat, ladies’ Cartier watches, World Series tickets and ringside seats to a Las Vegas boxing match.

Carona, once a rising Republican star who had been courted by former White House political strategist Karl Rove, is also charged with witness tampering. That allegation involves Haidl, who has turned against Carona and surreptitiously recorded at least one of their conversations for investigators. Haidl, an Orange County businessman, was the source of most of the illegal payments to Carona and Hoffman, the indictment said.

The sheriff and his wife have denied all of the allegations. Hoffman and her federal public defender have not commented. The defendants are free on bail and could not be reached for comment Thursday. Carona’s attorney did not return a phone call.

Haidl, Jaramillo and Cavallo are named as co-conspirators in the indictment. All have pleaded guilty to unrelated crimes -- Cavallo for paying bail agents to send clients his way.

Before Warner became a deputy, he served 14 years in the Marines. He joined the Sheriff’s Department in 1987 and spent much of his career patrolling the San Clemente area.

In 1995, he won the agency’s Medal of Courage for protecting a colleague during a gunfight with a suspect.

He earned the Medal of Life the same year for aiding a heart attack victim in a restaurant.

It was around then that a suspect assaulted him during an arrest, injuring Warner’s knee, friends said. He had previous surgeries before opting for a knee replacement at St. Joseph Hospital in Orange in May 2001.

The operation was on a Friday, and Warner died the following Monday.

At the time, Cavallo was not well-known in Orange County legal circles, although he had been practicing law since 1983. He is a 1981 graduate of the Western State University College of Law in Fullerton, a for-profit school that was then accredited by the state bar but not the American Bar Assn.

It now has a provisional ABA accreditation, according to the association’s website. The California bar website shows that Cavallo was disciplined in 1997 but does not say why.

Legal experts said they could only speculate how strong the Warner malpractice case might have been.

But they said such cases are routinely handled by law firms that have the money and expertise to take on hospitals and physicians, in hopes of winning the largest possible award.

“Typically a malpractice case of any magnitude gets kicked up the ladder to a firm that specializes in medical malpractice,” said Stephen Bundy, a professor at UC Berkeley’s Boalt Hall School of Law. “If he were a heavyweight lawyer, he wouldn’t have to scramble for business this way,” Bundy said of Cavallo and the referral allegation.

Diane Karpman, a Western State graduate who writes on legal ethics, said that kickbacks virtually guarantee that an attorney’s work will not be top-notch. “It divides the lawyer’s loyalty,” Karpman said. “The lawyer is supposed to have an undivided loyalty to the client.”

The 20-year sheriff’s veteran said friends of the Warners were flabbergasted at the size of the settlement. “It was such a good case,” said the deputy. “Nobody knew the back story. Now this makes total sense.”

The deputy described Warner as “kind of like a Bumper Morgan type of cop,” invoking the name of the aging Los Angeles beat cop depicted in Joseph Wambaugh’s police novels.

“He didn’t fit the stereotype: 6-foot-3 and chiseled,” the deputy said of Warner. “He was an older dude when he started. Salty hair, slightly overweight and grumpy. But when most guys got to know him, they loved him.”

paul.pringle@latimes.com

christine.hanely@latimes.com