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6/08/05 FEMA, CSC, Insurers and others named in $2 Billion Fraud Suit


Bankrupt and homeless victims speak out on low-ball claims.

Click on a picture to view video.

On June 8, 2005, a multi-plaintiff action was filed in United States District Court on behalf of more than 140 victims and alleges a conspiracy between high ranking FEMA officials, Computer Sciences Corporation (CSC), seventeen insurance carriers, third-party administrators, third-party adjusting firms and others.


In March 2004, after learning of widespread problems of low-balling within the National Flood Insurance Program (NFIP), the Senate Banking Committee directed FEMA to conduct an independent evaluation of more than 24,000 Isabel claims. Despite the directive, rather than conduct an independent review of the low-balled claims, FEMA assembled a Task Force comprised of many of the same adjusters and adjusting firms, and all of the same management, that originally low-balled the claims in the first place.


Ultimately, Homeland Security Under Secretary Michael Brown and FEMA’s acting Federal Insurance Administrator David Maurstad suggested that the victims, many of which remain homeless nearly two years after their loss, should file suit.


The suit refers to a training disparity whereby CSC trains sales agents to tell policy holders they will be restored to their pre-flood condition, while CSC simultaneously trains flood claims adjusters to allow for only narrowly defined coverage in limited amounts.


Victims from Tropical Storm and Hurricane Isabel banded together through FEMAinfo.us such that they were able to share information regarding their wrongful denial of flood claims.



Click here for Washington Post article

Click here for Baltimore Sun article

Click here for Virginia-Pilot article

Click here for Daily Press article

Click here for Star Democrat article

Click here for Insurance Journal article

Click here for Freeman and Freeman, P.C. press release

Click here for Washington DC CBS affiliate WUSA TV Report

Click here for PDF version of lawsuit

Click here for HTML version of lawsuit



Last Modified: 060905 1101

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