Houston attorney on trial for using bribery to get big settlements for silica cases

Marilyn Tennissen Aug. 28, 2009, 3:18am

A Houston attorney is currently on trial for allegedly bribing insurance company employees to settle silica-related lawsuits.

Warren Todd Hoeffner, 44, a Houston plaintiffs' attorney, was indicted in June 2007 with two former Hartford Insurance Co. employees on 14 felony counts of conspiracy, fraud and money laundering.

Hoeffner's trial began Aug. 24 in the court of Senior U.S. District Judge David Hittner.

Prosecutors claim Hoeffner and Hartford employees Rachel Rossow and John Prestage forced The Hartford to pay a $34 million settlement to Hoeffner's clients. Hoeffner then allegedly gave a $3 million kickback to Rossow and Prestage.

Rossow and Prestage, both residents of Connecticut, will have separate trials.

Hoeffner represented clients who brought claims and civil actions against The Hartford and other insurance companies claiming damages for silica-related diseases.

According to court papers, Rossow, 41, was a supervisor in the Claims and Legal Management Services department of The Hartford, and Prestage, 38, was a subordinate.

They were assigned to handle claims and civil actions against companies insured by The Hartford. Their duties included managing and settling claims and recommending to The Hartford the appropriate amounts of the settlements.

A Houston grand jury charged that all three of the defendants induced The Hartford to pay more than $34 million in settlement funds knowing that more than $3 million of those funds would instead be funneled by Hoeffner to pay bribes and kickbacks to Rossow and Prestage.

From the settlements, Hoeffner allegedly received around $5.3 million in attorney's fees, while Rossow took in about $2.6 million and Prestage more than $750,000.

Prosecutors allege that Hoeffner, Rossow and Prestage conspired to meet in various places, including Laguna Beach, Calif.; New York; Palm Beach, Fla.; and Nashville, Tenn., while negotiating the settlement of the claims of Hoeffner's clients.

According to indictments, the conspiracy occurred between February 2002 and November 2004.

Rossow and Prestage were said to have received incentives including, luxury cars, spa treatments and entertainment at "gentlemen's clubs."

Among the allegations, the government claims Hoeffner transferred $97,000 by wire from a personal account to a bank in Hartford that went to a car dealership to fund the purchase of two BMW automobiles: a 2002 BMW 530ia valued at about $46,876 for Prestage and a 2003 BMW 530ia valued at about $50,124 for Rossow.

According to the Houston Chronicle, the first day's testimony included a Connecticut BMW salesman who said he thought Hoeffner was a trust lawyer who oversaw family money that was paying for the new cars for the two insurance workers, who claimed to be rich siblings.

He said Prestage found one on the lot and Rossow ordered hers custom made, asking the company to remove an electronic governor that would not allow the car to go more than 125 mph.

The trial is expected to last more than a month.

Hoeffner also faces civil lawsuits from clients and Hartford. He also filed a counterclaim against Hartford.

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