Insurance Dispute Lawyer Blog

While catching up on some hurricane news for the Gulf Coast region from June, we came across this story about relief fraud in the wake of Hurricane Katrina

A federal grand jury in Atlanta has accused four people of fraudulently obtaining tens of thousands of dollars in government assistance for victims of Hurricane Katrina.

Federal prosecutors said Wednesday that 37-year-old Kristine Clark and 24-year-old Michael Rouzan, both of Decatur, Ga., were charged in one indictment, and 26-year-old Markisha Burks of Dallas and 43-year-old Lucien Danthon of Atlanta were named in separate indictments accusing them of falsely claiming they resided in New Orleans at the time of the 2005 storm.

Charges include wire fraud, mail fraud and theft of government funds.

Prosecutors say Clark and Rouzan obtained $32,000 for housing assistance and purported property damage, and a trailer in Hammond, La., where they lived from May 2006 to March 2008.

It's extremely frustrating to hear of how people took advantage of the tragedy suffered by the city of New Orleans but even moreso to see how their claims may justify stricter action by the government that can injure those with real needs after the next tragedy. Punishment for such fraud should be handled swiftly and aggressively to send a message so that if such an event occurs, anywhere in the country, opportunists avoid taking assistance from the people who truly need it. In the event there is any debate over eligibility for such assistance, contact an attorney or government official immediately before assuming and opening yourself up for jail time and fines.

Per The Times-Picayune, FEMA has delayed the deadline to 2012 for collecting insurance money designated for the elevation and protection of homes in Louisiana:

Because of the slow flow of other federal money, such as Road Home grants, FEMA had already pushed back the deadline for home-raising work under the National Flood Insurance Program's Increased Cost of Compliance provision.

Typically, to collect up to $30,000 in so-called ICC money to cover the costs of protecting their property from future storms, rebuilding homeowners have two years from the date that their property is declared "substantially damaged" to complete the relevant work. FEMA had already extended that to four years.

For most people affected by Hurricane Katrina, that gave them until September 2009. But earlier this month, state officials argued that homeowners needed more time because of various impediments to rebuilding, such as a shortage of contractors, new damage from last year's Hurricanes Gustav and Ike and the late arrival of state-run storm-proofing incentive programs, namely the Road Home elevation grants from the FEMA-financed Hazard Mitigation Grant Program.

This is a good sign as it indicates the federal government is aware that there are extensive delays people in the Gulf Coast area are dealing with, be it federal funding such as this or insurance companies delaying payouts. More time gives a break for residents who are feeling the economic crunch or are simply unable to meet the deadlines as they are set. Either way everyone wins in this scenario as it gives the government time to make sure the process goes correctly and is not rush and allows residents the opportunity to breathe easier about the new federal requirements.

Insurers seek dismissal of state's Road Home suit

NEW ORLEANS -- Lawyers for some of the nation's largest insurance companies asked a federal judge on Friday to dismiss a lawsuit filed by a former Louisiana attorney general, calling it "a bald attempt" to force insurers to increase payouts for hurricanes Katrina and Rita.

U.S. District Judge Stanwood Duval Jr. heard arguments from lawyers on both sides of the case, but didn't immediately rule on the companies' request for him to dismiss the class action suit filed in 2007 by former Attorney General Charles Foti.

Lawyers for Allstate Insurance Co., State Farm Fire and Casualty Co. and other insurers claim the attorney general's office is trying to take over the rights to more than 155,000 policyholder claims, to recover money the state paid out through the federally funded Road Home homeowner grant program after the 2005 hurricanes.

But the companies say the state already had deducted insurance payments in calculating grant awards.

More can be read at the KATC website, the article being available here

The insurance companies will fight tooth and claw to keep from paying out on claims and often make the process unbearable for policy holders looking to make a claim, going so far as to fight the state when it tries to step in for citizens. It is important to remain on top of your claim at every step and retain adequate legal council if necessary.

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