(The story has been corrected to note that only one attorney has been sued by Southeastern).
The series of guilty pleas that have accompanied Louisiana’s staged accident scandal have now expanded into an anti-racketeering suit filed by Southeastern Motor Freight, one of the victims of the scheme.
Southeastern filed the Racketeer Influenced and Corrupt Organizations Act (RICO) suit Tuesday in the U.S. District Court for the Eastern District of Louisiana. Southeastern appears to be mostly a drayage carrier, describing itself as operating mostly out of the port of New Orleans and moving intermodal containers and some short-haul dry vans.
The lawsuit cites by name one of the attorneys described as one of the masterminds of the operations but only referred to as attorney A in earlier federal documents: Danny Patrick Keating Jr. Simone Nugent, who is a parnter with Keating in the Nugent Keating law firm of New Orleans, is described in the lawsuit as the attorney who is referred to as attorney B in earlier documents. However, she is not a defendant in the RICO case.
The other two defendants already have pleaded guilty to wire fraud charges in connection with the scheme: Damian K. Labeaud and Mario Solomon.
The lawsuit has the advantage of bringing together the facts in the pleas as well as other information to spell out for the trucking world just how the staged accidents were planned and carried out.
Douglas Williams, an attorney with Breazeala, Sachse & Wilson, who is representing Southeastern, said he believes the suit filed by his firm is the first in what he expects to be a lengthy list of lawsuits filed by trucking companies that were targeted in the staged accident scheme. “Based on what I know in talking to other lawyers, there are a lot of trucking companies that were victimized,” Williams said.
The only other trucking company identified in the RICO lawsuit by Southeastern is Chattanooga, Tennessee-based Covenant, which the suit says paid out funds to individuals participating in the staged accident operation. But Williams stressed that does not mean that Covenant was the only other company targeted.
A recent indictment of 11 individuals over staged accidents at one location was “just the tip of the iceberg,” Williams added.
The guilty plea of Labeaud provided much of the detail in the RICO lawsuit about how the scheme was carried out.
The lawsuits that arose out of the staged accidents did result in actual payments by Southeastern. For example, three of the individuals who submitted guilty pleas but who aren’t part of the RICO action by Southeastern were said in the lawsuit to have settled for $7,500 each.
But the RICO action also notes that settlements were paid out to other individuals involved in the staged accidents by companies other than Southeastern. For example, it notes a $20,000 payment from Covenant to one of the individuals. But the RICO lawsuit also cites settlement demands by Keating and Nugent far in excess of the actual payouts noted in the suit.
A recap of the June 12, 2017, accident — or “accident” as the lawsuit puts it — illustrated the modus operandi of the parties that have pleaded guilty. A Chevrolet Trailblazer was involved in the accident. A truck driven by Michael Smith, of Southeastern, collided with the Trailblazer driven by an individual who was among the plaintiffs in the subsequent lawsuit, referred to in the RICO filing as the “Larry Williams lawsuit,” since it was Williams who was driving. (Nugent, the partner of Keating, filed the Larry Williams lawsuit). Williams and the passengers in the car alleged injuries and sought damages of as much as $92,000.
But Southeastern had dashcam video. It also had surveillance video from a nearby tire store. “These videos show the moments before, during and after the accident at issue,” the lawsuit says. What they showed, according to the RICO suit, were two vehicles sitting on the shoulder of a highway bridge on the Chef Highway: a Chevy pickup and the Trailblazer. There was no obvious reason for the vehicles to be stopped, according to the suit and the occupants of the Trailblazer said after the accident that they had been driving down the road, denying they had been parked.
Keating’s law firm withdrew from the case after the video was revealed, according to local news reports.
The truck driven by Southeastern’s Smith went by the two Chevys and moved to the right as he neared an intersection, where he stopped due to a red light. “At that time, [the] Trailblazer came from behind, swerved to the right and rear ended the trailer and then continued contact with the passenger side of the trailer down the driver’s side of the Trailblazer, damaging the driver’s side fender well and side view mirror of the Trailblazer,” the lawsuit says.
Right after that, the Chevy pickup that was on the bridge pulled up, a driver got out and an argument ensued. According to the lawsuit, that driver was Solomon, who subsequently pleaded guilty to wire fraud charges. The suit also says Labeaud was on the scene of the accident.
The lawsuit also notes that LaBeaud has filed five lawsuits alleging injury from truck accidents in eight years, “all of which involve similar sideswipe automobile accidents at or near the location” cited in the litigation surrounding Southeastern.
The lawsuit then recounts a series of phone calls, not with what was said but with the numbers, among the various people involved in the accident of the reported planning of it.
The RICO lawsuit is able to draw on earlier indictments and guilty pleas to note also that when Labeaud drove the Trailblazer in accidents, he would flee the scene after the crash and Larry Williams would then “get behind the wheel to make it appear that he was operating the Trailblazer during the staged accident.” LaBeaud would then be picked up by Solomon.
Another part of the RICO lawsuit says Labeaud would at times return to the scene of the accident and say he witnessed it, blaming the truck driver for the incident.
The role of “attorneys A & B,” Keating and Nugent, is spelled out repeatedly throughout the RICO lawsuit as handling recruiting, planning and payment to the individuals involved in the staged accidents.
Williams said the monetary damages demanded in the lawsuit total $500,000. “I don’t know that we’ll get to that number and there’s a good chance we won’t get to that number,” Williams said. “But this suit is about more than just the dollars.”
Keating, in an email, referred FreightWaves to his attorney, Brian Capitelli, a criminal attorney. An email sent to Capitelli had not been responded to by publication time. Williams said he has not heard or seen any reaction from Keating or attorneys representing him, not just as a result of the lawsuit but of the industry buzz that was going on long before now that Keating and Nugent were the unidentified attorneys A & B specified in the earlier legal actions.