Ouch...guess the plaintiff attorney didn't hear the program ended. Now if only plaintiff brokers would stop dropping money and gifts on the trial lawyers and their associations we'd be fine.

HOUSTON—A federal indictment accuses two former claims handlers for Hartford Insurance Co. of accepting kickbacks and bribes from a Texas attorney representing plaintiffs with silica-related health claims against Hartford policyholders.


The indictment, unsealed Wednesday in Houston, also names attorney Warren Todd Hoeffner, a partner in the Houston office of Hoeffner & Bilek L.L.P.


It alleges that Connecticut residents Rachel Rossow and John Prestage, who worked in Hartford’s Claims and Legal Management Services department handling general liability claims, and Mr. Hoeffner induced Hartford to pay $34 million to settle health claims against companies that manufactured products containing silica.

Hartford referred the case to prosecutors, according to a statement from the U.S. Attorney’s Office.


The three are accused in the 14-count indictment of conspiracy, mail fraud, wire fraud, conspiracy to commit money laundering and money laundering.


According to the indictment, the claims managers received more than $3 million between February 2002 and November 2004 for recommending that Hartford settle. Each also allegedly received a BMW from Mr. Hoeffner.

Mr. Hoeffner received more than $5 million of the settlement funds for attorney fees, the indictment alleges.

Richard,

I'm going to be doing a prolonged post on this topic as I get more information. What bothers me is what appear to be a culture of corruption at Hartford that has now resulted in this case, the issues with the 1%/3% structured settlement in house deal and the prior group annuity case where they were slapped for paying incentives to brokers to steer business when their rates weren't competitive.

All the players in this disgusting case deserve jail time for what occurred and I'll be following it closely.

I'm anxious to see who spends more money at AAJ this month...Bair or Halpern. Let the "gifts" and "donations" in return for structures fly! And this is the new improved AAJ, with 25% more factoring companies exhibiting (and here I thought the SSP meeting was the only place they exhibited). Yesiree, a real bastion of honor and integrity, that's what the plaintiff side of the business is. The defense side of the industry could sure learn something about ethical conduct from the plaintiff side.

Jack,

If you stroll through the exhibits at any trial lawyer event you will find that the biggest exhibitors now are probably in this order:

1. Trial lawyer finance companies.

2. Legal and court room technology.

3. Factoring firms.

4. Trust Company/Medicare Medicaid experts.

5. Structured settlement firms.

One of the things that struck me at the last Mass Torts conference is how few structured settlement firms were exhibiting compared to prior years. I think you will see a similar drop off in the AAJ convention as well. The primary reason? You don't get much back for your time and money at convention events if you are in the structured settlement arena, and unless you are one of the major donors and spenders you are stuffed in the back of the hall or some minor traffic area and end up looking like some poor insurance peddler.

As for the factoring and legal finance companies, thats where the real money is being made right now, as the margins on the loans typically run between 18% and 30% for legal finance firms, and margins on factoring pretty much in the same range.

If anyone can do a "head count" of the exhibitors and post it after the AAJ convention it might be interesting to see how many from each industry is there and how big the booths are.

As to your obviously tongue in cheek comment on the bastions of honor and integrity, the sad fact is both sides typically compromise both honor and integrity if enough cash is put on the table. What both sides should be considering is the best interest of the claimant and the integrity of the annuity product. Too much advertising and promotion needlessly slams the product and industry, with the net effect that our prospective clients are poisoned on the concept before we even reach them.

Speaking to the indictment involving Hartford's claims adjusters, would their fraudulent acts amount to bad faith on Hartford's part?

I think thats a great question Marty. I'm sure there is going to be an investigation of the past cases these guys handled and how the compliance and oversight of the claims process is handled at Hartford. My point in commenting on these is that this string of cases, while seemingly unrelated, indicate a culture that allowed rebating, pay offs and other disgusting business practices to flourish. If you ever get a chance to read the emails that were part of the group GIC case in which the Hartford guys admit that they have to pay "sales incentives" to sell their product as their rates stink and if they don't they will never sell anything just turn your stomach. Here you have lower yielding contracts sold as a result of sales incentives/bribes that probably cut the yield and return of retiree's who were beneficiaries of the plans that were buying these contracts. Hopefully Hartfords stock holders start to ask management just how these practices were allowed to go on for so long as standard business until they were exposed by litigation or regulatory action.