LA County Ordered to Halt $4 Billion Abuse Settlements Amid DA Investigation into Fraud Allegations
Los Angeles County District Attorney Nathan Hochman has requested that the county delay initial payments related to a significant $4 billion sexual abuse settlement. This pause is necessary while his office conducts a criminal investigation into potentially fraudulent claims.
In a letter addressed to county officials, Hochman emphasized the importance of waiting at least six months before any financial disbursements are made. He expressed concern over the risk of “irreparable loss of public funds and further harm to legitimate survivors.”
In response to Hochman’s request, the county announced on Wednesday through a court filing that it has reached an agreement with plaintiffs’ lawyers to deposit approximately $396.4 million into a settlement trust. However, payments to victims will be postponed until claims undergo additional scrutiny.
The county reached this landmark agreement with thousands of claimants last April, following the enactment of a 2019 California law, known as AB 218. This legislation lifted the statute of limitations on filing abuse lawsuits against government agencies in the state, resulting in the largest settlement of its kind by a public agency. Later in the year, the county also finalized an additional $828 million settlement with thousands more victims.
In November, Hochman announced the initiation of a comprehensive investigation into fraudulent abuse claims, focusing on whether certain individuals were compensated to file false lawsuits.
“The investigation is active and ongoing and encompasses potential misconduct by claimants as well as third parties including but not limited to attorneys, recruiters, and medical professionals,” Hochman stated in his letter to the county, dated January 9 and included in a recent court filing.
While Hochman’s office declined to comment further on the letter, Dawyn Harrison, the Los Angeles County Counsel, remarked that “AB 218 unfortunately opened the door to fraudulent claims and exploitation at unprecedented dollar amounts.”
Harrison added, “This agreement today protects victims with valid claims, while ensuring that County taxpayer dollars are protected against fraud.”
The ongoing investigation could have significant financial implications for the county and other agencies across the state, as numerous abuse lawsuits remain pending. LA County is currently facing 2,500 cases in addition to those already settled. Many of these lawsuits arise from physical and sexual abuse within the county’s juvenile detention and foster care programs, including incidents at the MacLaren Children’s Center, which was closed in 2001 after officials ignored abuse reports for decades.
Hochman clarified in his letter that his request for a delay is “not intended to cast doubt on the legitimacy of the claims, nor to delay justice for survivors.”
To finance the settlement, the county was authorized to borrow $500 million from the municipal bond market and approved widespread budget cuts, attributing these measures to the settlement and the costs incurred from last year’s wildfires.
California’s Fiscal Crisis and Management Assistance Team warned in a January report that the law facilitating more abuse cases would have a “substantial and ongoing financial impact” on public agencies statewide, likely resulting in further service cuts.
Top photo: Los Angeles County District Attorney Nathan Hochman. Bloomberg.
Copyright 2026 Bloomberg.
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Los Angeles County District Attorney Nathan Hochman has requested that the county delay initial payments related to a significant $4 billion sexual abuse settlement. This pause is necessary while his office conducts a criminal investigation into potentially fraudulent claims.
In a letter addressed to county officials, Hochman emphasized the importance of waiting at least six months before any financial disbursements are made. He expressed concern over the risk of “irreparable loss of public funds and further harm to legitimate survivors.”
In response to Hochman’s request, the county announced on Wednesday through a court filing that it has reached an agreement with plaintiffs’ lawyers to deposit approximately $396.4 million into a settlement trust. However, payments to victims will be postponed until claims undergo additional scrutiny.
The county reached this landmark agreement with thousands of claimants last April, following the enactment of a 2019 California law, known as AB 218. This legislation lifted the statute of limitations on filing abuse lawsuits against government agencies in the state, resulting in the largest settlement of its kind by a public agency. Later in the year, the county also finalized an additional $828 million settlement with thousands more victims.
In November, Hochman announced the initiation of a comprehensive investigation into fraudulent abuse claims, focusing on whether certain individuals were compensated to file false lawsuits.
“The investigation is active and ongoing and encompasses potential misconduct by claimants as well as third parties including but not limited to attorneys, recruiters, and medical professionals,” Hochman stated in his letter to the county, dated January 9 and included in a recent court filing.
While Hochman’s office declined to comment further on the letter, Dawyn Harrison, the Los Angeles County Counsel, remarked that “AB 218 unfortunately opened the door to fraudulent claims and exploitation at unprecedented dollar amounts.”
Harrison added, “This agreement today protects victims with valid claims, while ensuring that County taxpayer dollars are protected against fraud.”
The ongoing investigation could have significant financial implications for the county and other agencies across the state, as numerous abuse lawsuits remain pending. LA County is currently facing 2,500 cases in addition to those already settled. Many of these lawsuits arise from physical and sexual abuse within the county’s juvenile detention and foster care programs, including incidents at the MacLaren Children’s Center, which was closed in 2001 after officials ignored abuse reports for decades.
Hochman clarified in his letter that his request for a delay is “not intended to cast doubt on the legitimacy of the claims, nor to delay justice for survivors.”
To finance the settlement, the county was authorized to borrow $500 million from the municipal bond market and approved widespread budget cuts, attributing these measures to the settlement and the costs incurred from last year’s wildfires.
California’s Fiscal Crisis and Management Assistance Team warned in a January report that the law facilitating more abuse cases would have a “substantial and ongoing financial impact” on public agencies statewide, likely resulting in further service cuts.
Top photo: Los Angeles County District Attorney Nathan Hochman. Bloomberg.
Copyright 2026 Bloomberg.
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