Farmers Insurance Exchange has sued a so-called catastrophe chaser and two attorneys, accusing them of submitting false insurance claims relating to a series of California wildfires over the past seven years.
The lawsuit unsealed October 19 claims Glenn Sims, 56, orchestrated a scam in which he and the lawyers filed either sham or inflated claims for supposed smoke and ash damage suffered by homeowners in several fires dating back to 2003.
The lawsuit filed in September 2010 estimates there were more than 270 false claims made to Farmers totaling about $7 million, some of which were paid out. The filings seeks to recover three times that amount as well as civil penalties.
“These people are taking advantage of the system that is designed to compensate people whose homes have been damaged in wildfires,” said Dennis Kass, an attorney representing Farmers. “It’s unfair to those who suffered real damages to have these false claims gumming up the system.”
Sims’ attorney, Michael Chaney, said he couldn’t comment on the lawsuit because he hadn’t seen it.
Sims faces insurance fraud charges in Ventura stemming from a similar alleged scam following the 1994 Northridge earthquake.
Also named in the lawsuit are Southern California attorneys Neil Anapol and Robert Amidon. Both lawyers knew about the scheme, according to the lawsuit. Phone messages left for Anapol and Amidon were not immediately returned.
Kass said Sims portrayed himself as an insurance damage consultant and was aggressively seeking Farmers policyholders to file damage claims. Homeowners would typically get about two-thirds of the proceeds and the rest was divvied up between Sims and the lawyers, Kass said.
“He represented to these folks that they could send their kids to college or go on vacation with the claim money,” Kass said.
The claims averaged between $20,000 and $70,000. Some homeowners participated in the scam, taking ashes from their barbecues or fireplaces in order to file a false claim, Kass said.
Farmers launched its own investigation 21/2 years ago and has received cooperation from several people who worked with Sims. The allegations have been forwarded to the California Department of Insurance and the Los Angeles County district attorney’s office.
The state insurance department declined to comment about any pending investigation. The district attorney’s office had no immediate response.
Farmers Group Inc. was sued by more than 1,000 homeowners in August, accused of refusing to pay claims for smoke and ash damages suffered during last summer’s massive Station Fire near Los Angeles. The firm that filed that lawsuit is not named as a defendant in the suit unsealed on October 19.
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