Lawyer accused of fraud by U.S. in BP oil spill case is acquitted

By Jonathan Stempel

(Reuters) - A prominent Texas lawyer was acquitted on Thursday of charges he made up thousands of fake clients to sue BP Plc for damages that the oil company caused in the 2010 Gulf of Mexico spill, court records show.

Mikal Watts was among five defendants found not guilty by a Mississippi federal jury of charges related to an alleged scheme to defraud a program set up by BP to compensate people who suffered economic losses from the spill. Two other defendants were found guilty.

The U.S. Department of Justice had accused the defendants of submitting claims on behalf of more than 40,000 people who had not agreed to be represented by Watts' firm, or else were identified with stolen or bogus Social Security numbers and other personal information.

According to the indictment, one alleged victim, named Lucy Lu, who supposedly was a deckhand on a commercial seafood vessel, was actually a dog.

The convicted defendants were Gregory Warren and Thi Houng "Kristy" Le, who prosecutors said helped collect names and information.

Also acquitted were Watts' brother David Watts and Wynter Lee, who both worked for Mikal Watts' San Antonio law firm, and field representatives Hector Eloy Guerra and Thi Hoang "Abbie" Nguyen, who was Le's sister-in-law.

The Justice Department did not immediately respond to requests for comment. Mikal Watts, who represented himself at trial, and lawyers for Warren and Le did not immediately respond to a request for comment.

BP last month estimated it would incur $61.6 billion of overall liabilities for the April 20, 2010 spill, including for cleanup costs, damages claims and regulatory penalties.

The case is U.S. v. Watts et al, U.S. District Court, Southern District of Mississippi, No. 15-cr-00065.

(Reporting by Jonathan Stempel in New York)