Insurance Fraud Scheme Costs Law Firm, Partners $2M

Louisiana’s Insurance Commissioner has imposed a fine of $2 million on Texas law firm McLenny Moseley & Associates (MMA) and its associated partners for hurricane-related insurance fraud.

The fraud involved at least 850 Louisiana homeowners and policyholders, who were falsely represented by MMA as having retained the firm to settle claims. MMA’s founding partners were each fined $500,000 -- the maximum penalty permitted under current law.

According to the Louisiana Department of Insurance (LDI), an investigation into the law firm’s practices revealed that MMA admitted to at least 856 fraudulent misrepresentations. The fraudulent behavior included presenting payment demands, invoking policy appraisal provisions, and receiving and negotiating settlement checks without policyholder authorization.

All of this was done with the intent to defraud or deceive Louisiana policyholders and insurers, the LDI said.

The LDI had previously issued a cease-and-desist order to MMA after the firm had filed over 1,500 hurricane claim lawsuits in Louisiana within just three months in 2022.