Insurers and adjusters who handled Hurricane Katrina damage claims in Louisiana defrauded the National Flood Insurance Program of an estimated $8 billion, according to an attorney who filed a federal suit for a whistleblowers group.
The action filed in U.S. District Court in New Orleans naming eight insurers and five adjusting firms had been under seal until last week, while the government decided whether it wished to pursue its own action against the defendants. It was filed in August.
Should the government step in, the amount the group bringing the action would receive would be reduced from up to 30 percent to 15-to-25 percent of the proceeds.
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