Jefferson Parish authorities have settled a wrongful-conviction lawsuit filed by Michael Williams Sr., a man who won his release from prison in 2011 after serving 16 years of a life sentence for the murder of a Waggaman woman.

Terms of the settlement, filed last month in U.S. District Court, have not been disclosed.

But in an intriguing twist, the Jefferson Parish Sheriff’s Office has reopened its investigation of the 1996 fatal stabbing of Michelle Gallagher and named Williams as a suspect, even though newly tested DNA evidence matches another man.

The action by the Sheriff’s Office raises a question at a time when various Louisiana exonerees have struggled to win compensation for the years they spent unjustly behind bars: Why would the authorities agree to settle a so-called malicious prosecution lawsuit brought by a man they say may face new charges in the same death?

Joseph Lopinto, the Metairie attorney — and state representative — who represents Sheriff Newell Normand, said the Sheriff’s Office must consider the interests of taxpayers in deciding whether to settle a claim or take it to trial, weighing the costs of litigation and potential liability.

“This wasn’t an auto accident that may be worth $20,000,” Lopinto said of Williams’ case, which had been set for trial in October. “This was a person that was in jail for 16 years.”

The settlement, Lopinto added, “does not change the fact that there is an ongoing investigation.”

Williams, in his 2012 lawsuit, accused the Sheriff’s Office of conspiring with prosecutors to conceal conflicting statements made by the only witness to link Williams with the crime. That witness has since recanted, claiming he concocted his testimony under pressure from law enforcement.

The terms of the settlement don’t appear to be confidential, but attorneys on both sides of the case said they couldn’t discuss the dollar amount because the final paperwork hasn’t been signed. The authorities also declined to elaborate on the reasons Williams remains under suspicion.

“The investigation into Michelle Gallagher’s death has now been reopened,” said Col. John Fortunato, a Sheriff’s Office spokesman. “We’re not going to comment beyond that.”

Lopinto, however, said newly tested DNA evidence — semen found on the jeans of the victim, who had a history of exchanging sex for drugs — led investigators to a third party “who has given additional information.”

The Sheriff’s Office, at the behest of Williams’ attorneys last year, checked the forensic evidence against the FBI’s Combined DNA Index System, the national criminal database, and received a match.

The Sheriff’s Office offered no timetable for the investigation, which Sgt. Eddie Klein described in a recent court papers as “very much ongoing.”

Williams’ attorneys, for their part, said they learned only last month their client remains a suspect.

“In the past, witnesses have maintained that Mr. Williams is guilty,” Michael Maya, an attorney from Washington, D.C., said during a recent court hearing. “It sounds like they are going to continue to say that.”

The case isn’t the first in which the Sheriff’s Office has continued to suspect a defendant absolved of murder even after prosecutors abandoned the charges. Investigators in the widely publicized case of Damon Thibodeaux, a man exonerated by DNA testing in the 1996 murder of a 14-year-old girl, were said to be furious at District Attorney Paul Connick’s decision to drop the charges.

Emily Maw, director of the Innocence Project New Orleans, said “there is absolutely no evidence against Michael Williams.”

“It serves no legitimate law enforcement purpose to keep sullying his name by suggesting there is some unspecified basis to suspect him of a crime that he has already once been wrongly convicted of, as determined by a court of law,” Maw said.

“The DNA matches someone else,” she added. “The JPSO should focus on that person and let Michael Williams move on with his life.”

Gallagher’s mother, Tracy Garland, said she was heartened the authorities had not given up trying to figure out who killed her daughter.

“She was doing dope,” she said. “But that ain’t no reason to die.”

Eyewitness recants

Williams, 49, of Avondale, served nearly 16 years in prison and fought a lengthy legal battle before winning his release in 2011. The Innocence Project, which took on Williams’ case, presented its findings to the District Attorney’s Office, prompting prosecutors to file a one-page motion acknowledging that “post-conviction relief is warranted.” That motion paved the way for Williams’ immediate release.

The state’s case began to unravel in 2009 after the lone witness to implicate Williams, Christopher Landry, a crack addict and criminal, recanted. Landry has numerous convictions and remains on parole today for a burglary in St. Charles Parish, according to state officials.

Landry served as the state’s star witness at Williams’ 1997 trial, testifying that he had seen Williams smoking crack with Gallagher in his vehicle minutes before her death. Landry claimed he had followed the two to a secluded area on his bicycle, expecting the two to have sex. He said Gallagher, 25, refused Williams’ request for sex, adding that he later watched as Williams dumped the mortally wounded woman in the middle of the road “like a sack of potatoes” at River Road and George Street.

According to Williams’ attorneys, Landry had been considered a suspect himself before agreeing to testify under the threat of prosecution. Prosecutors disputed that at the trial, saying Landry had not been a suspect and had “no motive” to lie.

In 2009, Landry signed affidavits saying he actually knew nothing about Gallagher’s murder and that he had been intimidated by the authorities. “I made up all of this,” he wrote, adding he’d been high on crack when investigators came to his home to interview him.

On the night of the murder, the affidavit said, Landry had been stripping a stolen car.

“The police told me that if I did not give a statement saying that Michael Williams murdered Michelle Gallagher, they would charge me with the murder,” the affidavit said. “I was scared, so I told the police what they wanted to hear.”

Williams’ attorneys contend that Gallagher likely was killed by someone who picked her up as a hitchhiker on River Road. A newspaper deliveryman said he had seen Gallagher “staggering” outside Waggaman shortly before her death, leaning into a vehicle and speaking with someone.

Williams claims he didn’t receive a fair trial because the authorities failed to turn over to his attorney several conflicting statements Landry made before taking the witness stand — contradictions that could have weakened his credibility. Lopinto, the sheriff’s attorney, acknowledged a “mistake” was made when a secretary failed to transcribe part of Landry’s statements to detectives.

But, Lopinto added, it’s not clear that transcript would have made it to Williams’ attorney before the trial because the District Attorney’s Office didn’t turn over any statements.

“Was a mistake made when he was first convicted? Yeah,” Lopinto said. “That doesn’t take anything away from the case that’s happening now.”

‘Ups and downs’

The case against Williams was strikingly devoid of physical evidence. Despite prosecutors’ claim that Gallagher was fatally stabbed in Williams’ car, investigators couldn’t find a single drop of blood or fingerprint belonging to the victim — even though she had been cut on her neck and stomach and stabbed through the navel.

Judge Susan Chehardy, who presided over the nonjury trial and now sits on the state 5th Circuit Court of Appeal, convicted Williams nevertheless, attributing the murder and Williams’ life sentence to the scourge of crack cocaine, considered at the time to be an epidemic.

Williams, in a brief interview, said he’s seen “ups and downs” since leaving prison. He said he’s had trouble finding a job he’d like, due in large part to the years-long gap in his employment history.

“People draw conclusions based on zero information,” he said. “Regardless of the fact you’ve been exonerated, you’ve been to prison and served X amount of years. They have this picture in the back of their mind that, if you did the time, you must have had some part to play in the crime, and that’s further from the truth than the man on the moon.”

Follow Jim Mustian on Twitter, @JimMustian.