A New Orleans home owner whose home was destroyed during Hurricane Katrina has won an appeal against the home owner’s insurance company that denied his claim.   By ruling against Lafayette Insurance Company, the Louisiana 4th Circuit Court of Appeals has given fresh hope to the thousands of Katrina victims who say their insurance companies acted in bad faith when they denied claims.

Lafayette had appealed an earlier  state court decision that said the insurance company had to pay for damage to an apartment building owned by an Orleans Parish man that was caused by flooding brought on by levy failure following Hurricane Katrina.  In addition to being a source of income, the building also served as the man’s home.  Lafayette paid the policyholder about $2,700 for wind damage, but he estimates his home sustained a total of $223,488 in damage that should be covered.  Lafayette maintained that because that damage was caused by flooding, it did not have to cover the loss.

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Washington Mutual, the country’s largest savings and loan, is being targeted by the New York State Attorney General’s office for allegedly inflating the appraisals of houses for which it wrote mortgages. Fraudulent appraisals have left thousands of homeowners in that state with mortgages they can’t afford, and such schemes have been blamed for the turmoil in the current housing market. Yesterday, Andrew Cuomo, the New York Attorney General, said he was expanding a probe of mortgage fraud to focus on companies that packaged home loans and that were later resold to investors.

Washington Mutual and other lenders often write mortgages and then sell them as a group to investors. Last week, Cuomo accused Washington Mutual of pressuring an appraisal company to overvalue thousands of homes. Those mortgages were then sold to investors, who Cuomo says were misled about the value of the properties.

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The law firm of Parker Waichman Alonso LLP is at the forefront of an investigation into identify theft and mortgage fraud that has victimized dozens of people in Queens and Long Island, New York. The fraud, which has left its victims facing financial ruin, has resulted in two arrests and many more are expected.

Two employees of Griffin Mortgage Co. in Jackson Heights, Queens were arrested Monday for their alleged role in the schemes. According to the Long Island newspaper Newsday, the perpetrators allegedly stole ID information from their victims and used it to fraudulently obtain mortgages. So far, there are at least two dozen victims, but it could get far worse. Herb Waichman, a partner with the Long Island law firm Parker Waichman Alonso LLP, told Newsday that the firm has interviewed a number of people who are allegedly victims of the Griffin Mortgage employees. “What we have right now is just the tip of the iceberg,” Waichman told the newspaper. “It’s not a pretty picture.”

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Bad faith insurance companies like Allstate and State Farm systematically lowball claims, delay paying on them or arbitrarily change the terms of homeowners’ insurance policies in order to limit the amount of money they spend on claims. According to an article on Bloomberg.com, these practices have left thousands of homeowners in dire financial straits, while at the same time they’ve fattened the wallets of the bad faith insurance companies.

Once upon a time, insurance companies were committed to getting homeowners back on their feet when disaster struck. Families who had paid insurance premiums could be confident that their claims would be paid in timely manner. But that has all changed, and now insurance companies are more interested in raising their stock price than in taking care of their customers, thus their new nickname “Bad Faith Insurance Companies”. According to the Bloomberg article, the insurance industry started to change in 1989, after Hurricane Hugo. That storm cost the insurance industry $4.2 billion in claims. It was shortly after Hugo that the insurers started to look for ways to limit their financial responsibilities to homeowners.

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The U.S. Food and Drug Administration (FDA) issued a stern warning today, alerting consumers to the “dangers associated with buying prescription drugs over the Internet.” The impetus for this latest warning is the discovery that two dozen related websites may be involved in the distribution of counterfeit prescription drugs.

“On three occasions during recent months,” says the alert, “FDA received information that counterfeit versions of Xenical 120 mg capsules, a drug manufactured by Hoffmann-La Roche Inc. (Roche), were obtained by three consumers from two different Web sites. Xenical is an FDA-approved drug used to help obese individuals who meet certain weight and height requirements lose weight and maintain weight loss.
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As fears about melamine contamination continue to grow, the U.S. Food and Drug Administration (FDA) announced this week that it’s expanding its investigation of imported Chinese food additives. Initially thought to affect only pet food, there are now concerns that the tainted products have made it into livestock feed and perhaps even human food.

Last month, a major recall of pet-food products was initiated after it was revealed that the chemical melamine, a fertilizer and an ingredient used in the manufacture of plastic was found in a wide variety of dog and cat food. The melamine contamination at that time was linked to wheat gluten imported from China. In recent weeks, it was determined that a shipment of Chinese rice protein concentrate was also contaminated with melamine, causing the pet-food recall to expand.
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California-based generic-drug manufacturer Dey LP has reached a $2.9 million settlement with the state of Massachusetts with regard to accusations of price inflation and defrauding of the Commonwealth’s Medicaid program. The company has already reached similar settlements with a slew of other states, including Missouri, Ohio, Connecticut, Nevada, West Virginia, Hawaii, and Idaho, but has never acknowledged any wrongdoing in any of the cases.

The origins of the pricing litigation date back to the middle of last decade, when Dey was accused of inflating their wholesale prices when reporting them to the industry meaning that state and federal Medicaid programs were reimbursing the company at much higher rates than they should have been. The alleged scam allows the company to increase its profits while keeping the costs of their pharmaceuticals low for consumers.
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Pet-Food Recall Expands Yet AgainA month ago, relatively few people in the United States had ever heard of the chemical known as melamine. Fewer still knew that melamine, a chemical used as fertilizer and in the production of plastics and resin, caused kidney failure in dogs and cats. Unfortunately, people are learning all too much about melamine as the presence of the chemical has managed to mysteriously contaminate a huge supply of pet food in the United States.

This week, two more pet-food companies announced voluntary recalls of their products due to fears of melamine contamination. California-based Natural Balance recalled all of its Venison dog products and dry Venison cat food only, regardless of date codes. The recalled products include Venison and Brown Rice canned and bagged dog foods, Venison and Brown Rice dog treats, and Venison and Green Pea dry cat food.
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Canadian pet-food manufacturer Menu Foods has once again expanded its recall of contaminated products after discovering that at least one shipment of tainted wheat gluten made it to its Canadian production facility. In addition, it appears that Menu Foods’ CFO dumped half of his holdings in the company a mere three weeks before they announced the recall.

Last month, Menu Foods recalled more than 60 million cans and pouches of “wet” dog and cat food after the food was linked to kidney failure in a number of pets, but that recall extended only to “cuts and gravy” style dog and cat food manufactured at the company’s Emporia, Kansas, facility between December 3, 2006, and March 6, 2007. However, the company announced yesterday that a shipment of tainted wheat gluten, supplied by ChemNutra, was received at its Streetsville, Ontario, plant and used in the production of pet food in December and January.
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A New York Times investigative report in today’s editions has further exposed a dangerous and growing concern within the medical community: physicians with significant financial ties to the pharmaceutical industry. Research has shown that these financial connections can unduly influence a range of important medical decisions made by doctors, including the crafting of general clinical practice guidelines and the use of specific prescription tendencies for their own individual patients.

The genesis of the Times’ report was a review of records kept by the state of Minnesota, which was the first state to pass a law requiring disclosure of all financial transactions between drug companies and physicians. (Vermont, Maine, West Virginia, California, and Washington, D.C., have similar statutes on the books.)
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