State Farm Defrauded Flood Program After Katrina, Jury Finds

By Bibeka Shrestha (April 9, 2013, 8:59 PM EDT) -- A Mississippi federal jury found Monday that State Farm Fire & Casualty Co. defrauded the U.S. government's flood insurance program into paying a $250,000 claim from Hurricane Katrina, allowing two whistleblowers to expand their False Claims Act suit to touch thousands of other Katrina claims.

After about 2 1/2 hours of deliberation, the jury sided with relators Cori and Kerri Rigsby, finding that State Farm submitted a false claim to the National Flood Insurance Program and created a false record to support that claim, according to Derek Sugimura, a Weisbrod Matteis & Copley PLLC attorney representing the Rigsbys.

The verdict comes...

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