[StBernard] Why isn't the parish particularly involved in this....

[Westley Annis]

I know many are going to ask how this affects them, but this could also
affect people's ALE, content payouts, etc.

Wendy
 


 


Justice Department ordered to explain its lack of involvement in insurance
case


Posted by <http://blog.nola.com/times-picayune/about.html> Money section
<http://blog.nola.com/times-picayune/about.html>  June 07, 2007 9:34PM


By Rebecca Mowbray
Business writer

The federal judge who unsealed a whistle-blower case last month about
insurance companies allegedly overbilling the National Flood Insurance
Program is demanding that the U.S. Department of Justice get involved in the
case or explain itself. 

The unusual move comes from U.S. District Judge Peter Beer, who unsealed a
case in which a group of former insurance adjusters say that they have
collected evidence that insurance companies have defrauded taxpayers by
overbilling the federal flood program while underpaying claims for Hurricane
Katrina wind damage to save the companies money. 

Beer filed this one-sentence motion in court this week: 

"The Court, on its own motion, respectfully requests the United States
Department of Justice enter this case by July 9, 2007, or show cause on July
11, 2007, at 9:30 a.m., why they are not intervening in this civil action." 


Beer said he was surprised to learn that the U.S. attorney's office in Baton
Rouge only planned to monitor the case, which now is being prosecuted on
behalf of the U.S. government by a private attorney in New Orleans
representing the whistle-blowers, rather than take it over. 

"What about the good old general public? Who better to look after the
interests of the public, than the U.S. attorneys," Beer said. "This is a
case the government should be involved with. The United States should be
right in there, and not just monitoring it, given as far reaching and
serious as this case is." 

The whistle-blowers say that they've analyzed the insurance company
appraisals of damage and readjusted claims at 150 properties in the New
Orleans area, and they've documented that in each case, the flood claim was
overpaid while the wind claim was underpaid. So far they have found that
flood claims were overpaid by an average of 66 percent, meaning that the
overcharging could reach into the billions of dollars, given that the flood
program paid $14 billion after Hurricanes Katrina and Rita in Louisiana. 


Because private insurance carriers administer federal flood insurance
policies and adjust both flood and wind claims, the theory is that companies
may be dumping the bills for wind damage onto the taxpayer-financed flood
program to save themselves money. 


Insurance companies have said they stand by their claims-handling practices.


Beer's motion was copied to U.S. Attorney General Alberto Gonzales or his
deputy; Jim Letten, the U.S. Attorney in New Orleans; and David Dugas, the
U.S. Attorney in Baton Rouge. 

Although the whistle-blower suit was filed in federal court in New Orleans,
Dugas' office in Baton Rouge fielded the complaint with the Civil Division
of the Department of Justice in Washington. The U.S. attorney's office in
New Orleans has said it can't say why the complaint isn't being handled
locally. 

Dugas was unable to be reached for comment. A spokesman in Washington said
the Justice Department would have no comment at this time. 

Rebecca Mowbray can be reached at rmowbray at timespicayune.com or (504)
826-3417.