Shows files motion for amended RICO complaint – Part 1 Overview

Anyone doubting that Provost Umphrey had the capacity to keep the Katrina RICO case on track won’t give it a second thought after reading the firm’s Motion to file the second amended complaint and exhibits such as as Exhibit 1, the complaint quoted in this post. With Judge Barbour’s July 2 ruling the case is moving forward.

The stay entered by this Court on April 18, 2008, is hereby vacated. Guy Gladstone Fisher shall contact the Chambers of United States Magistrate Judge Linda R. Anderson within seven days of the date on which this Order is entered and request that a new Case Management Conference be scheduled in this case. Counsel for Plaintiffs shall be prepared to discuss filing an Amended Complaint during the Case Management Conference.

On July 3, Magistrate Judge Linda R. Anderson set the Telephonic Scheduling Conference set for 7/22/2008 at 09:30 AM and a text only order admitting the motions to appear Pro Hac Vice of Thomas Walter Umphrey, Bryan O. Blevins, Gene M. “Zona” Jones, and John Andrew Cowan were granted.

The proposed Amended Complaint for Violation of Racketeer Influence Corrupt Organization Act (“RICO”) and Other Relief, attached hereto generally makes the types of changes Plaintiffs’ former counsel outlined in their Motion to Amend the Complaint [64] which the Court conditionally granted. In particular, it incorporates the new information and clarifications of the allegations and adds State Farm Bank, F.S.B., as an additional defendant. However, no new Plaintiffs are added because Provost Umphrey does not represent the proposed new Plaintiffs that Plaintiffs’ former counsel sought to add.

The rest of this post is taken directly from the 80-page amended complaint (Exhibit 1) linked above.

Prior to Hurricane Katrina, Defendant STATE FARM applied for and obtained regulatory approval to add an endorsement modifying the FP-7955 policy marketed on the Mississippi Gulf Coast. The endorsement, a so-called “Hurricane Deductible Endorsement,” shifted to policyholders an increased share ofthe actual dollar loss in the event a hurricane struck and damaged the insured property. As approved, in the event an insured homeowner rejected the Hurricane Deductible Endorsement, SF was alternatively permitted to charge coastal homeowners a commensurate amount in increased premium. To obtain regulatory approval, SF used hurricane-specific experience ratings and computer model projections of hurricane losses. (#37 page 8 )

Description of the Enterprise

In the wake of Katrina, SF catalyzed the formation of a racketeering enterprise (the”Enterprise”), consisting of multiple individuals and companies. SF consists of multiple related companies. Relevant to this case are SF Fire, SF Mutual, and SF Bank. Those three entities had distinct, but overlapping,roles with respect to these named Plaintiffs and other policyholders. Each of them took specific actions in forming the Enterprise and in participating in the ongoing pattern of racketeering that the Enterprise committed.

The Enterprise consists of SF, along with Renfroe, the Renfroes, Bob Kochan and Forensic, inter alia, along with logistical and technological tools (including but not limited to mobile offices, laptop computers, specialized data/computer servers, physical files and email accounts). SF was/is positioned at the top of the Enterprise’s hierarchy. While other companies and individuals participated and assisted the Enterprise along the way (as discussed below and in the RICO Case Statement), SF, Renfroe, and Forensic served as the hub or central core of the racketeering Enterprise.

The proposed Amended Complaint for Violation of Racketeer Influence Corrupt Organization Act (“RICO”) and Other Relief, attached hereto generally makes the types of changes Plaintiffs’ former counsel outlined in their Motion to Amend the Complaint [64] which the Court conditionally granted. In particular, it incorporates the new information and clarifications of the allegations and adds State Farm Bank, F.S.B., as an additional defendant. However, no new Plaintiffs are added because Provost Umphrey does not represent the proposed new Plaintiffs that Plaintiffs’ former counsel sought to add.

From its inception, the Enterprise had a clear decision-making hierarchy or structure, with SF positioned at the top. SF issued orders, directives and suggestions to Forensic and Renfroe, who providedfeedback and information to SF, allowing for collective decision-making aimed at pursuing the ultimate goal of denying valid insurance claims and making money. SF also paid both Renfroe and Forensic, but not simply as “independent contractors” – rather as co-conspirators intent on helping SF and the Enterprise make as much money as possible.

Though SF exercised and continues to exercise maximal control of the Enterprise, all of the Enterprise’s Members are distinct from the Enterprise and its activity and each exercised and continues to exercise control over various functions of the Enterprise. The Defendants comprising the Enterprise associate together for the common purpose of defrauding Plaintiffs and other policyholders out of millions of dollars in insurance benefits.

SF, Renfroe and Forensic were and are distinct actors within the Enterprise. SF’s contract with Renfroe for adjusting services evidences that SF and Renfroe did not intend to establish a principal-agent relationship and do not have a principal-agent relationship. To the contrary, said contract states explicitly that Renfroe is an independent contractor whose employees are not State Farm employees. Further, State Farm has denied numerous times in various settings that Renfroe employees were or are its employees and/or agents. Likewise, Forensic served State Farm as an independent contractor whose employees were not acting as State Farm employees or agents.

The Enterprise and RICO persons are distinct from the series of predicate acts alleged with particularity herein and within the Amended RICO Case Statement (incorporated by reference), and the Enterprise is ongoing and functions as a continuing unit. The Enterprise procures corrupt property inspections and falsely contrived inspection reports for the common purpose of divesting coverage benefits. Policyholders’ claims continue to be adjusted by the Enterprise and the Enterprise continues to use the false “factual” data, reports, and weather information against new claimants, just as they have used and continue to use it against the named Plaintiffs.

The Enterprise’s conduct involves the knowing creation of false reports, double-reporting, document destruction, spoliation of evidence, perjury, obstruction of justice, deception and fraud – all utilized to illegally obtain profits. SF and its RICO cohorts developed an elaborate racketeering plan that was put into action in the late summer of 2005 and continues to this day. (emphasis added)

Stay tuned, more to follow.

2 thoughts on “Shows files motion for amended RICO complaint – Part 1 Overview”

  1. Good job nowdoucit and good job Provost. Renfroe should have gotten thier name off of RICO while they had a chance. Looks like they may be in it til the end.

  2. Surely does, you’ll see more on the allegations re: Renfroe in Part 3 that’s scheduled to post later. Provost reads like a novel, duesouth, and that makes it easy to put a post together.

    One thing that’s clear is that the amended complaint incorporates the Order that they personally and the company have liability (I believe that was Senter’s order btw. I read it again yesterday but when I tried to find it last night, I couldn’t pull it back up under Senter or Barbour)

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