Lawsuit Accuses Insurers of Defrauding Government

posted on:
September 26, 2007


 In another Katrina-related matter, a federal judge in Gulfport, Mississippi, has ordered a 2006 lawsuit involving insurance companies unsealed, saying that the Department of Justice is considering whether to intervene in the case. 

The "whistleblower" lawsuit was filed in April 2006 on behalf of two sisters who worked for a company that helped State Farm Insurance adjust policyholder claims on the Mississippi Gulf Coast after the August 2005 storm. But the lawsuit was legally required to remain under seal so federal authorities could investigate and consider intervening in the case.

When the case was unsealed, U.S. Magistrate Judge Robert Walker confirmed that federal authorities were considering whether to intervene. The federal government had argued that its disclosure would compromise the federal government's ability to conduct an adequate civil investigation of this case.

Judge Walker wrote in his order that the government had given no explanation for how the investigation would be compromised by unsealing the case.

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