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Roy Olofson, the whistleblowing former vice president of finance for Global Crossing Ltd., has reportedly been assisting investigators from the Securities Exchange Commission in the last several weeks and hasn’t been available for interviews with the press. Nor are his attorneys at O’Neill, Lysaght & Sun talking about their newest potentially multimillion-dollar client, except in a lengthy press release. But it’s not hard to guess why Olofson was drawn to the 19-lawyer, Santa Monica, Calif.-based litigation boutique when he recently sought new legal counsel to help him win redress against Bermuda-incorporated and Beverly Hills, Calif.-based telecommunications company Global Crossing, which fired him, he claims, because he raised alarms about accounting irregularities. Since its founding in 1985, lawyers at O’Neill Lysaght have won numerous seven- and eight-figure awards in cases involving complex accounting issues. Brian Lysaght, the lead attorney on Olofson’s case, has won multimillion-dollar jury verdicts against real estate developers, insurers, entertainment companies and the state of California. Last year, he extracted a confidential settlement from 20th Century Fox on behalf of “NYPD Blue” producer Steven Bochco in a landmark dispute over back-end profits, and he has also successfully defended executives of failed banks. John Moscarino, now the firm’s managing partner, has won a multimillion-dollar malpractice verdict against a Big Six accounting firm. O’Neill Lysaght has also made a name for itself by representing “little guys” caught up in massive, high-profile criminal cases. Lawyers with the firm defended Johnny Chung, the fund-raiser implicated in the Hsi Lai Temple campaign finance scandal; Steve Lewis, the county auditor-controller accused of misconduct in the 1994 Orange County, Calif., bankruptcy; and Wen Ho Lee, the nuclear scientist accused of spying for China. All three were eventually exonerated of all but minor charges. In addition to touting those victories, O’Neill Lysaght makes another boast about its legal acumen that might have caught Olofson’s eye. Litigants and other lawyers regularly show their confidence in the firm by “calling upon us to try a case at the 11th hour,” the O’Neill Lysaght Web site exclaims. Olofson’s case won’t be going to trial any time soon. But when he turned to Lysaght to replace his previous counsel, apparently within the last couple of months, it must have been clear to Olofson that the opportunity to win a big settlement from Global Crossing was fading fast. As the company told it in a Feb. 4 press release, Olofson tried repeatedly last year to extract an outlandish sum from Global Crossing. Last August, he had raised questions internally about accounting practices, but the company insisted its financial statements were beyond reproach. So Olofson retained an attorney and, according to Global Crossing, he stopped coming to work, claiming he had been “constructively terminated.” A short while later, the unnamed attorney warned in a letter that if Olofson didn’t get “an up-front multi-million dollar payment and a minimum seven figure annual cash compensation package for a five year period,” he would tell all in a wrongful termination suit. The company placed Olofson on paid administrative leave, and, Global Crossing says, his settlement demand dwindled over the next several months to less than one-tenth of the original amount. But the company never buckled. Olofson was eventually terminated, “in connection with a substantial reduction in its workforce,” on Nov. 30. Some time between then and mid-January, Lysaght entered the picture, and Olofson’s settlement demand immediately shot back up. The company said it received a letter from Olofson’s new attorney on Jan. 18 renewing the threat to sue for wrongful termination “unless a multi-million dollar payment was made” by Feb. 1. Before that deadline arrived, the company’s fortunes took a dramatic turn. Amidst a cascade of revelations that its balance sheet isn’t nearly as healthy as it has looked, Global Crossing filed for bankruptcy protection Jan. 28, weighing in as the nation’s fourth-largest insolvency. Olofson’s name has been in the news practically every day since. His critique of Global Crossing’s accounting practices were laid out in a detailed press release issued by O’Neill Lysaght on Feb. 4, hours after Global Crossing issued its own statement about its former employee and his “questionable” demands for large sums of cash. Company officials concede that, using a practice called “round-tripping,” Global Crossing recorded hundreds of millions of dollars of revenue from sales of capacity on its worldwide fiber optic network even though payment was in the form of a similar amount of capacity on the purchasers’ own telecom networks. But Olofson alleges that while it is technically legal, Global Crossing used the accounting gimmick for the illegal purpose of keeping investors on the hook so executives could cash out their holdings before the stock crashed. Lysaght did not return calls for comment on the status of the case by press time. But in a Feb. 4 press release, Lysaght said Olofson has now withdrawn his offer to settle. He is precluded, for now, from filing suit against the bankrupt company itself, but not against the officers, Lysaght said. Litigation will commence in the “near future,” he vowed in the press release, adding, “When a jury hears of Global Crossing’s conduct, we believe our settlement proposals will seem small.” Lysaght went on to reject the company’s assertions that Olofson’s claims amount to “opportunism” and “extortion.” Such accusations are routinely leveled against whistleblowers, he said. As for the settlement demand that he conveyed to Global Crossing in January, there was nothing untoward about that. “In virtually every litigation our firm commences, we always notify the other side in advance as a matter of courtesy and include a copy of the complaint. We encourage the other side to engage in settlement discussions. This is simply responsible litigation practice,” he said. Charges of “extortion” come with the territory where Lysaght has won fame and fortune since starting his business litigation firm, after working as an associate at O’Melveny & Myers for two years in the 1970s and then in the antitrust division of the U.S. Department of Justice. In the summer of 2000, it was Los Angeles Police Chief Bernard Parks who was accusing him of money-grubbing. Lysaght had teamed up with controversial police-misconduct attorney Stephen Yagman to file a suit accusing the LAPD’s Rampart Division of racketeering in violation of the federal RICO statute. The attorneys were unapologetic about the tactic, insisting it was the only way to root out systemic problems in the police department. More than 100 convictions have been overturned based on indications that several officers routinely planted weapons and falsified reports. The city has incurred more than $30 million in damages in Rampart litigation. In a RICO suit, plaintiffs would be entitled to treble damages. But the litigation suffered a major blow last year when U.S. District Judge Gary Feess of the Central District of California ruled that the plaintiffs lacked standing to sue under RICO. Yagman insisted at the time that he would fight on, but neither he nor Lysaght was available to comment on where the litigation stands now. Half a dozen attorneys who have either worked with or against Lysaght, or have been his client, declined to comment about the litigator and his latest fight. Mark Holscher, for one, a partner at O’Melveny & Myers who teamed up with lawyers from O’Neill Lysaght to defend Wen Ho Lee, declined to comment because, as he said through a secretary, his firm might have a role in Global Crossing litigation that is likely to pop up all over the place in the months to come. Gerald Chaleff, a veteran criminal defense attorney recently hired to work as a special adviser in the Los Angeles City attorney’s office, declined to comment about Lysaght’s RICO suit because, Chaleff noted, as a former member of the city Police Commission, he might end up as a defendant in the case. But Chaleff had nothing but praise for Lysaght’s skills as a hard-nosed litigator. “I’ve known him for more than 20 years. He’s an excellent lawyer,” Chaleff said. “He’s a lawyer you want on your side, not against you.” Mark Thompson is a free-lancer based in Los Angeles.

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