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Attorney Scruggs files RICO suit against State Farm.

Will the State Farm/Hurricane Katrina debacle ever end? On June 20th, Attorney Scruggs sued State Farm in federal court in Mississippi, accusing the company of engaging in a “pattern of racketeering” by manipulating engineering reports on Hurricane Katrina damage so the company could deny policyholder claims. Scruggs is already pursuing litigation against the company, but this is the first lawsuit alleging violations of the civil Racketeer Influenced Corrupt Organization Act, or RICO. Here’s the 101-page complaint.

This latest lawsuit comes on the heels of allegations released earlier this year that State Farm employees encourages certain property adjusters to alter their property damage estimates to allow State Farm to deny claims. This is just one example of the horrors State Farm’s insureds have endured in the wake of Hurricane Katrina. Is anyone listening?

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