Longtime followers of this blog and its predecessor may remember the qui tam suit the Scruggs Katrina Group filed on behalf of the Rigsby Sisters, who were adjustors for State Farm after Katrina. They alleged that State Farm was fraudulently moving claims from wind damage, which they covered, to water damage, which was covered by federal flood insurance but that State Farm administered.
I’ve glanced at the docket occasionally; it would be a full-time job to attempt to follow it. The case was narrowed from a broad charge of fraud to a charge involving the one case involving Thomas and Pamela McIntosh’s house.
Anita Lee reports that a jury has returned a verdict for the Rigsby’s on the fraud claim:
A federal jury has found State Farm Fire and Casualty Co. committed fraud against the federal government and submitted a false record to support fraud after Hurricane Katrina.
The verdict came after the eight-member jury deliberated for three hours Monday afternoon in a whistle-blower lawsuit, Rigsby vs. State Farm. The decision potentially opens for examination thousands of post-Katrina flood claims State Farm adjusted and paid before reimbursement by the National Flood Insurance Program.
Before opening their case to other claims, former insurance adjusters Kerri and Cori Rigsby first had to prove State Farm committed fraud involving one property: the North Biloxi home of Thomas and Pamela McIntosh.
The Rigsbys presented evidence that State Farm paid policy limits of $250,000 for flood damage to the house, even though wind covered under the insurance company’s policy was responsible for the loss. The jury decided State Farm overcharged NFIP the full $250,000.