It’s been quite a hurricane season for the U.S. this year, with Harvey hitting Houston, Irma passing through Florida all the way up to Bracker & Marcus HQ, and Jose and Maria on their way. We hope everyone is staying safe during this difficult time.
There’s no question that natural disasters bring out the best in Americans, as we all band together to support those in the path of destruction. But there are always a few bad apples who see opportunity in suffering. There are price gougers, con artists, and, of course, fraud against the government.
Over a decade later, the devastation of Hurricane Katrina in 2005 is still vivid in our memories. Yours truly was a graduate of Tulane University less than two years prior. While the rest of the nation was passing around collection plates to restore New Orleans, State Farm Insurance saw a chance to defraud those same taxpayers. In United States ex rel. Rigsby v. State Farm, the “Good Neighbor” company was found by a jury to have misclassified wind damage, which it should have paid for, as flood damage, which was paid by the federal government under the National Flood Insurance Program. The case went all the way up to the U.S. Supreme Court, which upheld the verdict.
That verdict spun additional litigation against State Farm, including a lawsuit filed by the state of Mississippi alleging that it had paid as much as $522 million to State Farm policyholders after it manipulated reports of adjusters and engineers to limit its own responsibility.