Freeman and Freeman Files Lawsuit on Behalf of NFIP Insurance Victims
Today a multi-plaintiff lawsuit against Homeland Security Undersecretary Michael Brown, FEMA Acting Director David Maurstad, Computer Sciences Corporation President Paul Cofoni, seventeen insurance companies, their vendors and adjusting firms and others was filed in United States District Court, Greenbelt, Maryland alleging that the group conspired to defraud thousands of catastrophe victims who had purchased flood insurance through the National Flood Insurance Program (NFIP).
Washington, DC (PRWEB) June 9, 2005 -- A multi-plaintiff lawsuit against
Homeland Security Undersecretary Michael Brown, FEMA Acting Director David
Maurstad, Computer Sciences Corporation President Paul Cofoni, seventeen
insurance companies, their vendors and adjusting firms and others was filed
Wednesday in United States District Court, Greenbelt, Maryland, alleging that
the group conspired to defraud thousands of catastrophe victims who had
purchased flood insurance through the National Flood Insurance Program
(NFIP).
As a result, many family units were destroyed – left to live in
campers without indoor plumbing when temperatures dropped below freezing, with
no place for children to study or play.
In February 2004, pattern
recognition and fraud detection expert Mr. Steven Kanstoroom found that many
insurance adjusters were using software programs that relied upon new
construction pricing rather than far costlier repair and renovation pricing. The
following month the Senate Banking Committee directed FEMA to reevaluate 24,000
victims’ claims – the largest such event in FEMA’s history. Rather than conduct
an independent review, FEMA and CSC assembled a Task Force comprised of the
identical management and many of the same adjusters or adjusting firms that
low-balled the victims in the first place.
Recent Congressional
testimony revealed that CSC was training sales agents to tell policyholders they
would be restored to their pre-flood condition, while simultaneously training
flood loss adjusters to allow for only narrowly defined coverage in limited
amounts. CSC transacts billions of dollars of business with its insurance
company clients.
Government and insurance industry whistleblowers leaked
the rational for the low-balling. The insurance industry was concerned that if
they fairly paid the flood claims it would set a precedent for their non-flood
claims. Former federal insurance administrator J. Robert Hunter wrote to Mr.
Kanstoroom “History seems to be repeating itself. Similar to your findings, in
the early 1970s I found private insurance carriers refusing to pay legitimate
claims out of concern for setting precedent related to similar language in their
homeowners insurance policies. In fact, they told me so point
blank.”
Wednesday’s lawsuit alleges wrongful conduct, including:
-
Officials of FEMA, CSC, Seventeen Insurance carriers and their vendors acted in
concert to defraud thousands of flood loss victims.
- FEMA Acting Director
Maurstad, a licensed representative of some of the same carriers that he
regulates, has attempted to mischaracterize the NFIP as “a form of assistance”
rather than the wholly premium funded insurance program that it
is.
Senior officials of CSC have knowingly permitted its employees to
tell flood victims, and train flood adjusters, that fuel oil contamination can
be remediated with what amounts to perfume. Fuel oil is a known toxin, irritant
and suspected carcinogen. The conspiracy included a number of low-balling, high
pressure tactics designed to force flood victims to settle for pennies on the
dollar.
Martin Freeman said that similar actions for victims from a
number of states will likely be filed.
The Complaint seeks relief
requiring defendants to pay the shortfall, disgorgement of profits, damages for
the devastating impact the defendants’ actions have had on the flood victims,
and punitive damages to deter the defendants from continuing the unauthorized
conduct.
The case number is AW-05-CV-1547.
For related
information, go to www.femainfo.us.
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Source : http://www.prweb.com/releases/2005/6/prweb249529.htm