Virginia attorneys plead guilty to $200 million extortion scheme
Two Virginia attorneys pleaded guilty in federal court on Friday to federal extortion charges over their roles in trying to extort a chemicals company in litigation against Monsanto Co. over health risks associated with Roundup weed killer.
According to the Department of Justice, 38-year-old Timothy Litzenburg, of Charlottesville, and 41-year-old Daniel Kincheloe, of Glen Allen, each pleaded guilty to one count of transmitting interstate communications with the intent to extort in the Western District of Virginia.
They both admitted their roles in the extortion scheme, which the Justice Department says threatened to inflict substantial financial and reputational harm on the company if their demands for a $200 million payment disguised as a purported “consulting agreement” were not met.
“This is a case where two attorneys blew well past the line of aggressive advocacy and crossed deep into the territory of illegal extortion, in a brazen attempt to enrich themselves by extracting millions of dollars from a multinational company,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division. “Today’s pleas underscore that when crimes are committed, members of the bar, like all members of the public, will be held accountable for their actions.”
They'll be sentenced on September 18.
“The consequences of extortion are far reaching, affecting not only individuals, but also the economy in the United States and the world’s financial markets,” said Inspector in Charge Delany De Leon-Colon of the U.S. Postal Inspection Service (USPIS). “Those who engage in this type of abuse of power while in positions of authority should know they cannot escape detection. They will be found and they will be held accountable for their actions.”
As part of their guilty pleas, Litzenburg and Kincheloe admitted that around October 2019, Litzenburg approached a company and threatened to make public statements alleging that the company had significant civil liability for manufacturing a purportedly harmful chemical used in a common household product used to kill weeds.
Litzenburg and Kincheloe also admitted that after describing the possibility of damaging lawsuits against the company, Litzenburg proposed that he and Kincheloe enter into a “consulting arrangement” with the company to create a conflict of interest that would stop them from representing their clients in litigation against the company.
From then on, Litzenburg and Kincheloe admitted that Litzenburg, with Kincheloe’s knowledge and agreement, demanded that the company pay them and others a total of $200 million in purported “consulting fees.”
Litzenburg and Kincheloe also admitted that after making their demand for $200 million from the company, they registered a Virginia corporation for the purpose of receiving money from the company, and that they agreed to split the funds among themselves and their associates, and to not distribute any of the money the company paid them as purported “consulting fees” to their existing clients. Litzenburg and Kincheloe admitted that after making their demand for $200 million, Litzenburg threatened that they and others would commence litigation that would become “an ongoing and exponentially growing problem for [Company 1], particularly when the media inevitably takes notice[,]” and that such litigation would cost Company 1 and its publicly-traded parent company “billions, setting aside the associated drop in stock price and reputation damage.”
Litzenburg and Kincheloe also admitted that in an email written by Litzenburg, they threatened Company 1 that unless they were paid $200 million, Company 1 would have “thousands of future plaintiffs against [Company 1,]” and that “in the absence of a so-called ‘global’ or final deal with me, this will certainly balloon into an existential threat to [Company 1].”
In addition, Litzenburg and Kincheloe admitted that they met in person with attorneys representing Company 1 at a conference center in Charlottesville, and during that meeting, Litzenburg again threatened to injure the property and reputation of Company 1 and its parent company unless they were paid $200 million pursuant to purported “consulting arrangements,” and that without such a deal there was no way Company 1 “gets out of it for less” than “[a] billion. Yeah. No, I mean, nuisance value, uh, defense lawyer fees, a hit in the stock when this gets filed and served, maybe the press conference, whatever.”
Later in the same meeting, Litzenburg and Kincheloe admitted that Litzenburg again stated that if they commenced litigation, it would have adverse effects on Company 1’s parent’s stock price, which Litzenburg described as “a 40 percent stock loss coming off the top.”
Litzenburg also admitted that, during other communications with Company 1, he told Company 1 that if he received the $200 million in “consulting fees” he would not discuss Company 1 or its parent company with his current clients, and that he was willing to “take a dive” during a deposition of a toxicology expert to deter potential future claims related to litigation against Company 1.
The USPIS investigated the case. Principal Assistant Chief Henry P. Van Dyck and Assistant Chief L. Rush Atkinson of the Criminal Division’s Fraud Section are prosecuting the case.
The Criminal Division’s Fraud Section plays a pivotal role in the Department of Justice’s fight against white collar crime around the country.
A Virginia attorney involved in litigation against Monsanto Co. over health risks associated with Roundup weed killer has been charged by federal prosecutors for allegedly trying to extort $200 million from an unnamed company.
Timothy Litzenburg, of Charlottesville, was arrested Tuesday on attempted extortion and interstate threat charges.
Prosecutors allege Litzenburg threatened to “inflict substantial financial and reputational harm" if the company did not meet his demand for a $200 million payment disguised as a consulting fee.
An affidavit filed in court to support a criminal complaint against Litzenburg says he contacted a chemical manufacturing company in September saying he was preparing a lawsuit against the company for its role in making compounds used by St. Louis-based Monsanto to make Roundup, which has been blamed in lawsuits for causing non-Hodgkin lymphoma and other cancers.
The affidavit said Litzenburg told an attorney for the company that he would settle the case for $5 million, but said he also wanted a separate $200 million consulting fee for himself and his associates.
“Litzenburg later described the $200 million ‘demand’ as ’a very reasonable price' compared to the ‘significant financial consequences to (the company) of a protracted and public ‘Roundup Two,’ ” Postal Inspector Kevin Towers wrote in the affidavit.
Litzenburg, who has been released on bail, did not immediately return a call seeking comment. His attorney, Thomas Bondurant Jr., did not immediately return a call made to his Richmond office Thursday.
Roundup has been blamed for causing cancer in users in thousands of lawsuits against Monsanto’s owner Bayer, which denies such allegations and says the product is safe.