Nov 16 (Reuters) – The Louisiana State Police has opened a criminal investigation into a Texas law firm that faced discipline in both federal and state court after it mishandled hundreds of lawsuits filed over hurricane property damage, according to police records.
An initial complaint from the Louisiana State Police, dated Oct. 17 and obtained through a public records request this week, said the department’s insurance fraud/auto theft unit in New Orleans is investigating McClenny Moseley & Associates, now known as MMA, for fraud, forgery, improper solicitation of clients and other potential charges. A Louisiana State Police spokesperson did not respond to questions about the investigation.
The investigation, which was first reported by local Louisiana media, originated with the Louisiana Department of Insurance, which found more than 20 insurance claim lawsuits were filed on behalf of people who said they had never hired MMA to represent them. Many of those people had never received the settlement funds from their cases, according to the complaint.
Representatives for MMA and the attorneys involved in the Louisiana cases, John Zachary Moseley and William Huye, did not immediately respond to requests for comment. Former name partner James McClenny directed questions to his attorney, who did not respond.
McClenny Moseley, which is based in Houston, filed hundreds of lawsuits in Louisiana state and federal courts last year against insurers on behalf of homeowners who suffered property damage from hurricanes Laura, Delta and Ida. In January, the firm attracted the scrutiny of judges over allegations that the attorneys improperly solicited or paid for clients through a marketing company and a roofer, brought claims against the wrong insurers, filed duplicate lawsuits or sued insurers that had already settled with their clients.
Attorneys from the firm have faced disciplinary proceedings in both state and federal court, court records show. A Louisiana federal judge has blocked the firmand its attorneys from collecting any fees in about 200 cases.
The law firm and its attorneys are also facing multiple malpractice lawsuits in state and federal court from former clients who say they lost out on their chance to pursue their insurer for compensation due to McClenny Moseley’s mishandling of their case.
In May, the Louisiana Department of Insurance hit the firm with $2 million in fines, accusing the lawyers of engaging in fraud and unfair trade practices with about 850 homeowners.
The department, which was originally tipped off by insurance defense attorney Matthew Monson, took its findings to the Louisiana State Police in October, according to the complaint.
In a statement, a department spokesperson said the police opened its investigation in “a relatively short period of time considering the enormity of the actions.”
Monson told Reuters that “there is a healthy basis” for the investigation.