A Massachusetts court awarded MetLife Auto & Home $2,989,270 in damages for fraud against the owners and operators of numerous auto body repair shops, several former policyholders and one of its former appraisers.
The ruling represents a victory in the fight against insurance fraud, which John Sargent, who heads MetLife’s Special Investigations Unit, estimates costs U.S. consumers $25 billion a year and can add between $200 and $400 to a family’s insurance costs.
MetLife’s action was brought under the Federal Racketeer Influenced Corrupt Organizations (RICO) Statutes, which permitted the company to pursue any individuals who were involved in a conspiracy to commit fraudulent acts. The original action named the owners and operators of five auto body repair shops, who were alleged to have conspired with an appraiser formerly employed by the company.
In exchange for bribes and kickbacks the appraiser had allegedly inflated automobile appraisals or wrote appraisals for non-existent damage. Four of the original defendants defaulted or settled the lawsuits, which went to trial against the owners and operators of L&L Collisions.
MetLife is an industry leader in recouping millions of dollars from fraudulent insurance claims. The company, a division of MetLife, has over 3 million p/c policies in force and is the fourth largest writer of auto insurance in Massachusetts.
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