The birds and bees of the qui tam case were fluttering over two new State Farm entries on the docket when I checked early evening. State Farm called the first a Bench Memorandum Re: “Knowingly False” Claims; but, regardless of what they called it, there is no mistaking what it is – an admission the Company committed fraud against the government when they submitted the McIntosh claim for payment.
Retitled, it’s the story of their little-bit-pregnant fraud – which they claim is not a crime because the fraudulent claim they submitted in McIntosh was “unknowingly false”.
This is what they expect Judge Senter to believe:
State Farm did not “knowingly” present to the government a “false or fraudulent claim for payment or approval” with respect to the McIntosh property, as expressly required to establish liability under the False Claims Act.
GFL, what is it they think people have been talking about for almost four years? As their defense they show how their adjusters are trained to commit fraud and provide evidence suggesting they’ve been commiting fraud against the government and have been doing it for years to NFIP policyholders and their own.
You’d think this one admission would have been enough; but, as reinsurance, they filed a second. This one a Bench Memorandum Re: Judicial Notice – a reminder theMcIntosh claimed settled. Duh!
Here, this Court’s own records, whose accuracy cannot reasonably be questioned, indicate that the McIntoshes made their well-informed representations to this Court…
Well, that resolves any mystery about the motivation for the Motion to exclude all testimony of David Favre:
State Farm criticizes changes Favre made to a prior report he submitted in McIntosh v.State Farm. According to State Farm, Favre used a different Xactimate price guide and altered some of the dimensions of rooms in the McIntosh property…Yet State Farm does not identify the source of the new data: State Farm’s own homeowner’s claim…
Why not send just Chip Merlin an invitation to sue them for settlement fraud? I doubt he believes State Farm “unknowingly” does anything – and, let’s not forget the Shows’ RICO Plaintiffs and their claims of “mediation fraud”.
I can’t image teaching a second grade science that a water line on a porus material indicates the depth of water reaching the material – much less training adjusters to use the line as a definitive indicator of depth.
“Unknowingly” my #*% – the scheme: the best place to hide a needle is in a haystack of needles.
Now, just who is it that didn’t know? Reams of evidence suggest it wasn’t anyone associated with State Farm.
6 thoughts on “State Farm’s little bit pregnant fraud”
I’m sorry but I don’t see in that pleading any admission that their payment under the flood party was fraudulent. To the contrary they say there was support for it and that even if the decision to make it was incorrect, it was not knowingly false. There may be disagreement about the evidence but where’s the admission?
How could they tender any payment without adjusting the claim Justme? Lecky Kings emails cleaarly show they were doing this weeks before Dave Maurstad approved expediated claims procedures.
State Farm had a fiduciary duty to the NFIP to properly adjust the claims and properly apportion damage and somehow I don’t think the automatic tendering of flood policies while blanket denying wind covereage claims fits that bill.
As sop said, they have a fiduciary responsibility to federal taxpayers. That means they should apply the same standards to the NFIP claims as they apply to their own claims. That is the definition of fiduciary – not putting your own interests ahead of your client’s interests.
If they did not perform a proper adjustment or make a reasonable attempt to determine how much damage had been caused by flooding, yet took all the benefit of the doubt (and then some) in their own favor at the expense of NFIP and homeowners, they committed fraud. It really is, or at least should be, that simple.
Even if it is reasonable to believe that there was some flood damage, they are not free to max out the flood policy without a proper adjustment, especially if their own wind policy gets an offsetting benefit for every dollar that is paid from the flood policy.
So you’re both saying that other evidence shows they didn’t do a proper adjustment, right? That appears to be a fact question balancing the evidence you are referencing to their version that the payment was based on evidence of flooding and testimony from the Rigsbys that the damages exceeded the policy limit.
My question is what is the admission of fraud in the referenced pleading?
Billing the government for $250,000 without documenting the claim is fraud. Try to do it in any other federal program and see what would happen to you.
If a doctor said “This patient has cancer, so pay me $50,000 to treat it” would Medicare pay or would Medicare say “Document the diagnosis and the treatment and we will pay the appropriate charges?”
They were government contractors on flood claims and have to be accountable to the taxpayers. Fiduciary responsibility, avoidance of conflict of interest, and due diligence are not complicated concepts. State Farm did not meet those responsibilities.
Lost my comment and the time I had available to write – short answer, justme, is you don’t submit a memo of excuses that doesn’t admit you got caught with your hand in the cookie jar.
More on this, if needed, when I can get back on line.
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