Ventura Allocates Funds for Defense in FBI Probe

Officials have set aside $100,000 to retain a top Los Angeles law firm for county leaders who are the subject of an ongoing FBI criminal investigation.

The probe seeks to determine whether they deliberately defrauded the government for nearly a decade by submitting improper Medicare claims.

The county already has incurred $25.5 million in legal fees, accounting costs and other penalties associated with improper Medicare billing and the failed 1998 merger of the county’s mental health and social services agency.

A spokeswoman at O’Melveny & Myers confirmed Wednesday that the firm has agreed to represent the county in the investigation being conducted by the FBI on behalf of the U.S. attorney’s office.

But the law firm has not signed a contract with the county and has yet to be paid for services, County Auditor-Controller Tom Mahon said.

The $100,000 “transfer went to county counsel’s budget unit, and no money has been expended against it yet,” Mahon said. “We have no record of a contract yet.”

David Nesbitt, FBI agent in charge of the Ventura office, said the county investigation is continuing. He declined to release the names of county officials targeted in the probe.

In an internal memo dated May 3, Chief Assistant County Counsel Frank Sieh asked Mahon to transfer the money from a $500,000 county legal fund to the county counsel’s budget.

The memo states that Hooper and Lundy, the firm that represented the county in the federal government’s civil lawsuit, “have been replaced by O’Melveny & Myers for the criminal matter.”

Sieh said the Board of Supervisors and the Health Care Agency asked to hire the new firm because “a different legal issue was being dealt with.”

O’Melveny & Myers is “well-respected. They’re well-known and they’re competent counsel,” Sieh said.

The criminal investigation began last fall after the county settled the civil lawsuit by agreeing to pay $15.3 million over five years to make up for a decade of overbilling Medicare.

Since general fund money is set aside each year by the board to pay attorneys’ fees, the recent expense doesn’t require board approval, officials said.

“The county is always being sued, or suing,” Mahon said. “So when these things come along that are not covered in departmental budgets, then these [funds] can be used.”