The ad Cook heard was from Sheldon Law Group, one of several law firms active in sex abuse litigation in California that receive backing from private investors, according to loan notices and SEC filings. The investors, which often operate through Delaware companies, expect to profit from the payouts to resolve the cases.<\/p>\n
Sheldon, based in Washington, D.C., has been one of the most prolific L.A. advertisers. The firm has already gathered roughly 2,500 potential clients, according to a list submitted to the county. The lawsuits started being filed this summer, raising the prospect of another costly settlement squeezed out of a government on the brink of a fiscal crisis.<\/p>\n
\u201cWe act in the best interests of our clients, who are victims in every sense of the word and have suffered real and quite dreadful injuries,\u201d a spokesperson for Sheldon Law Group said in a statement. \u201cWithout financial and legal support, these victims would be unable to hold the responsible parties, powerful corporate or governmental defendants, accountable.\u201d<\/p>\n
The financing deals have raised alarms among lawmakers, who say they want to know what portion of the billions poised to be diverted from government services to victims of horrific sex abuse will go to opaque private investors.<\/p>\n
<\/p>\n
Kathryn Barger, a member of the L.A. County Board of Supervisors, said she was contacted by a litigation investor who sought to gauge whether sex abuse litigation could be a smart venture. \u201cThis is so predatory,\u201d Barger told The Times. <\/p>\n
(Juliana Yamada\/Los Angeles Times)<\/p>\n
\u201cI\u2019m getting calls from the East Coast asking me if people should invest in bankrupting L.A. County,\u201d Supervisor Kathryn Barger said. \u201cI understand people want to make money, but I feel like this is so predatory.\u201d <\/p>\n
Barger said an old college friend who invests in lawsuits reached out this spring attempting to gauge whether L.A. County sex abuse litigation could be a smart venture. Barger said the caller referred to the lawsuits as an \u201cevergreen\u201d investment.<\/p>\n
\u201cThat means it keeps on giving,\u201d she said. \u201cThere\u2019s no end to it.\u201d<\/p>\n
The county has spent nearly $5 billion<\/a> this year on sex abuse litigation, with the bulk of that total coming from the $4-billion deal this spring \u2014 the largest sex abuse settlement in U.S. history. <\/p>\n The April settlement is under investigation by the L.A. County district attorney office following Times reporting<\/a> that found plaintiffs who said they were paid by recruiters to join the litigation, including some who said they filed fraudulent claims. All were represented by Downtown LA Law Group, which handled roughly 2,700 plaintiffs. <\/p>\n Downtown LA Law Group has denied all wrongdoing and said it \u201conly wants justice for real victims.\u201d The firm took out a bank loan in summer 2024, according to a financing statement, but a spokesperson said they had no investor financing.<\/p>\n Lawyers who take the private financing say it\u2019s a win-win. Investors make money on high-interest rate loans while smaller law firms have the capital they need to take on deep-pocketed corporations and governments. If people were victimized by predators on the county\u2019s payroll, they deserve to have a law firm that can afford to work for free until the case settles. Money for investors, they emphasize, comes out of their cut \u2014 not the clients\u2019.<\/p>\n But critics say the flow of outside money incentivizes law firms to amass as many plaintiffs as possible for the wrong reasons \u2014 not to spread access to justice, but rather ensure hefty profit for themselves and their financial backers. <\/p>\n \u201cThe amount of money being generated by private equity in these situations \u2014 that\u2019s absurd,\u201d said former state lawmaker Lorena Gonzalez, who wrote the 2019 bill<\/a> that opened the floodgate for older sex abuse claims to be filed. \u201cNobody should be getting wealthy off taxpayer dollars.\u201d<\/p>\n For residents of L.A.\u2019s poorest neighborhood, ads touting life-changing payouts have started to feel inescapable.<\/p>\n Waiting in line at a Skid Row food shelter, William Alexander, 27, said his YouTube streaming is punctuated by commercials featuring a robotic man he suspects is AI calling on him to sue the county over sex abuse.<\/p>\n Across the street, Shane Honey, 56, said nearly every commercial break on the news seems to feature someone asking if he was neglected at a juvenile hall.<\/p>\n In many of the ads, the same name pops up: Sheldon Law Group.<\/p>\n Austin Trapp, a case worker in Skid Row, was among several people in the neighborhood who said ads seeking people to join sex abuse litigation against L.A. County have become increasingly common.<\/p>\n (Gina Ferazzi\/Los Angeles Times)<\/p>\n Sheldon\u2019s website<\/a> lists no attorneys, but claims the firm is the \u201carchitect\u201d behind \u201csome of the largest litigations on Earth.\u201d They list their headquarters online at a D.C. virtual office space<\/a>, though the owners on their most recent business filing list their own addresses in New York. The firm\u2019s name appears on websites hunting for people suffering from video game addiction<\/a>, exposure to toxins from 9\/11<\/a>, and toe implant failure<\/a>.<\/p>\n Sheldon Law Group was started by the founder of Legal Recovery Associates, a New York litigation funding company that uses money from investors including hedge funds to recruit large numbers of plaintiffs for \u201cmass torts,\u201d cases where many people are suing over the same problem, according to interviews with former advisers, court records and business filings.<\/p>\n Those clients are gathered for one of their affiliated law firms, including Sheldon Law Group, according to two people involved in past transactions. <\/p>\n Ron Lasorsa, a former Wall Street investment banker who said he advised Legal Recovery Associates on setting up the affiliate law firms, told The Times it was built to make investors \u201cobscenely rich.\u201d<\/p>\n \u201cIt\u2019s extremely profitable for people who know what the hell they\u2019re doing,\u201d Lasorsa said.<\/p>\n The idea, he says, emerged from a pool cabana at a Las Vegas legal conference called Mass Torts Made Perfect in fall 2015.<\/p>\n A man visiting friends on Skid Row holds up his phone showing an ad recruiting clients for sex abuse case in Los Angeles County on December 11, 2025 in Los Angeles, California.<\/p>\n (Gina Ferazzi\/Los Angeles Times)<\/p>\n Lasorsa had just amassed 14,000 clients for personal injury lawsuits in one year using methods that, he now says, were legally dubious. A favorite at the time: using call centers in India that had access to Americans\u2019 hospital records and phoning the patients to see if they were feeling litigious.<\/p>\n Near the pool at a Vegas hotel, Lasorsa said Howard Berger, a former hedge fund manager barred by the SEC<\/a> from working as a broker, asked if he could turbocharge the caseload of Legal Recovery Associates, where he worked as a consultant.<\/p>\n Lasorsa said he soon teamed up with the founders of LRA \u2014 Gary Podell, a real estate developer, and Greg Goldberg, a former investment manager \u2014 to create \u201cshell\u201d law firms based in Washington. The nation\u2019s capital is one of the few places where non-lawyers can own a law firm, profiting directly from case proceeds.<\/p>\n Goldberg, who is not licensed to practice law in D.C., would become a partner in at least six D.C. law firms including Sheldon Law Group by 2017, according to a contract between Legal Recovery Associates and a hedge fund that financed the firms\u2019 cases. <\/p>\n Sheldon, which said it was responding on behalf of Podell, said in a statement that all their partners are lawyers, though declined to name them. Goldberg did not respond to a repeated request for comment. <\/p>\n The Sheldon spokesperson said Legal Recovery Associates is a separate entity that engages in its \u201cown business and legal activities.\u201d <\/p>\n Investors typically make money on litigation by providing law firms with loans, which experts say carry interest rates as high as 30%, representing the risk involved. If the case goes south, investors get nothing. If it settles, they make it all back \u2014 and then some.<\/p>\n Lasorsa said he helped the company gather 20,000 claims using the same Indian call centers before a bitter 2019 split. He later accused the owners of unethical behavior, which led to a half-million dollar settlement and a non-disparagement agreement that he said he decided to breach, leading to a roughly $600,000 penalty he has yet to pay, according to a court judgment. <\/p>\n Lasorsa was also ordered to delete any disparaging statements he\u2019d made, according to the judgment.<\/p>\n D.C. law firms with non-lawyers as partners must have the \u201csole purpose\u201d of providing \u201clegal services,\u201d according to the district\u2019s bar<\/a>. Some attorneys have argued no such service was provided by the firms associated with Legal Recovery Associates.<\/p>\n Troy Brenes, an Orange County attorney who co-counseled with one of the firms over flawed medical devices, accused the company of operating a \u201csham law firm\u201d as part of a 2022 court battle over fees.<\/p>\n \u201cThe sole purpose \u2026 appears to have been to allow non-lawyers to market for product liability cases and then refer those cases to legitimate law firms in exchange for a portion of the attorney fees without making any effort to comply with the D.C. ethics rules,\u201d Brenes wrote.<\/p>\n A spokesperson for Sheldon and LRA noted in a statement that \u201cno court or arbitration panel has ever concluded\u201d that its business structure violates the law. <\/p>\n In the medical device cases, the affiliate firm, which was responsible for funding the marketing campaign, took 55% of recoverable attorney fees, according to an agreement between the two firms. The profit divide mirrors the 55\/45 breakdown between Sheldon Law Group and James Harris Law, a two-person Seattle firm<\/a> they have partnered with on the L.A. County sex abuse cases, according to a retainer agreement reviewed by The Times.<\/p>\n A person on Skid Row in downtown L.A. shows an ad on their phone seeking plaintiffs to joint a lawsuit over sexual abuse in juvenile halls.<\/p>\n (Gina Ferazzi\/Los Angeles Times)<\/p>\n This summer, ads linking to a webpage with the name of James Harris appeared online, telling potential clients they could qualify in 30 seconds for up to $1 million. When a Times reporter entered a cell-phone number on one of the ads, a representative who said they worked for the firm\u2019s intake department called dozens of times.<\/p>\n After The Times described these marketing efforts in a story<\/a>, Harris emphasized in an email that he did not know about the ads or the persistent calls and said they were done by his \u201creferring firm.\u201d The landing page the ads led to was replaced<\/a> with the name of Sheldon Law Group.<\/p>\n Harris said his firm and Sheldon, which he described as \u201cfunctioning as a genuine and independent co counsel law firm,\u201d have \u201cbeen highly selective and have only prosecuted cases that we believe are legally and factually meritorious.\u201d<\/p>\n \u201cI continue to believe that lawyer advertising, when conducted ethically and without misleading claims, serves as a vital tool for raising public awareness about legal rights and available recourse, particularly for survivors of abuse seeking justice,\u201d he said.<\/p>\n Over the last five years, experts say, the practice of funding big mass tort cases has boomed in the U.S.<\/p>\n Of the five main firms in L.A. County\u2019s initial $4-billion sex abuse settlement, two took money from outside investors shortly before they began suing the county, according to public loan filings.<\/p>\n <\/p>\n
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