Federal Judge Orders Dept of Justice to Enter in Insurance Companies Katrtina Fraud Case or Show Cause

One would think this should be a DoJ case given it involves alleged widespread fradulent practices by the insurance industry in response to Katrina claims which resulted in taxpayers, via the National Flood Insurance Program, picking up a chunk of the industry’s tab. Also note the NFIP went bankrupt and insurance companies posted record revenues and profits post Katrina.

From The Times Picayune

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.”


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. (my emphasis)

More details on insurance claim practices Here.

But hey the DoJ’s US Attorney for the Eastern District of Virginia has entered into the Michael Vick dogfighting case leading one county attorney to remark…

“I’m sort of amazed, to be quite honest. I’m almost looking for President George W. Bush to come in on a helicopter.”

Hmmmm they’ve entered a quarterback’s dogfighting case but not a case of Multi BILLION dollar fraud at the taxpayers’ expense. Someone shoot me

4 thoughts on “Federal Judge Orders Dept of Justice to Enter in Insurance Companies Katrtina Fraud Case or Show Cause

  1. And THIS, folks, is why it’s a bad idea to turn the Department of Justice into a political shop. Because they will pick and choose their cases depending on what best serves their President and their party, and not on what best serves justice, or the nation.

  2. Insurance Industry = White
    Michael Vick = Black
    This ends the session of simple answers to simple questions…

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