DOJ "Turning Up the Heat" in Asbestos Bankruptcy Trust System

  • Home >
  • Resources >
  • DOJ "Turning Up the Heat" in Asbestos Bankruptcy Trust System
October 09, 2018

Recent developments at the U.S. Department of Justice (DOJ) suggest the agency is “turning up the heat to ferret out abuses and potential cases of fraud,” according to an article in Law360.

Over the past few weeks the DOJ has intervened in an asbestos bankruptcy trust case and sent requests for information to several others in a probe on potential False Claims Act violations. These steps came one month after Associate Attorney General Jesse Panuccio publicly announced that the DOJ would “increase the transparency and accountability of asbestos trusts” because “alarming evidence has emerged of fraud and mismanagement.” DOJ says the investigations stem from a 2014 court decision in In Re: Garlock Sealing Technologies LLC, in which the plaintiffs were found to have "withheld exposure of evidence [that] would have mitigated Garlock's own liability in each and every one of the 15 sample civil asbestos cases."

In a statement, U.S. Chamber Institute for Legal Reform President Lisa A. Rickard said “victims, companies and taxpayers are all hurt when the tens of billions of dollars set aside to compensate victims are not distributed in an honest manner.”