Commissioner issues maximum penalty against individuals and firm
Louisiana Insurance Commissioner Jim Donelon imposed a $2 million penalties on Texas law firm McLenny Moseley & Associates (MMA) and associated partners for hurricane-related insurance fraud involving at least 850 Louisiana homeowners and policyholders.
“The illegal insurance scheme perpetrated by McClenny Moseley & Associates is, quite frankly, one of the most egregious cases that has ever come through this department,” Donelon said. “The $2 million in fines should put all bad actors on notice that fraudulent behavior will not be tolerated in Louisiana.”
The maximum punishment allowed under current law was imposed on MMA, founding partners James McLenny and John Moseley, and Louisiana managing partner William Huye III.
According to an ongoing Louisiana Department of Insurance (LDI) inquiry, MMA has admitted to at least 856 fraudulent misrepresentations that it had been employed by Louisiana policyholders to settle claims when it did not represent the persons.
According to the LDI, the law firm engaged in fraudulent activities such as submitting payment requests, invoking policy appraisal clauses, and receiving and negotiating settlement funds without policyholder agreement.
“Based on the LDI’s investigation, these misrepresentations and unauthorized legal representations were made by MMA with the intent to injure, defraud, or deceive Louisiana policyholders and insurers for the purpose of diverting insurance claim proceeds to their benefit and collecting predatory professional service fees to which they were not entitled,” the LDI stated.
The LDI recommended policyholders who believe the firm “fraudulently represented” them to contact its insurance fraud division.
As Insurance Business noted in February, the LDI had already issued MMA with a cease-and-desist order. The LDI claimed at the time that it had filed over 1,500 storm claim lawsuits in Louisiana in just three months in 2022.
Insiders in the industry have already warned of “disturbing” claims methods at work in the state.
