Scruggs-Katrina Group Accuses State Farm Of Racketeering

State Farm may be back in court soon, this time for RICO charges. That stands for the Federal Racketeer Influenced Corrupt Organization Act.

The Scruggs Katrina Group filed the charges in U.S. District Court against State Farm, E.A. Renfore Company as well as the Forensic Analysis and Engineering Company.

The Scruggs Katrina Group says its two year investigation shows a pattern of corrupt behavior where State Farm cheated policy holders out of claims payments. Now, they say, they plan to put an end to it once and for all.

"They sent out an engineer to look at this very property and the report came back by a certified engineer that said that the damage here was caused by wind and under the wind policy, State Farm would have had to pay. They would have had to pay money. When State Farm got a copy of this report from the folks that they hired, Forensic Engineering, they didn't like it. Because they would have had to pay for it," says Mike Moore, former Mississippi Attorney General.

He says the company kept secrets from homeowner Glenda Shows.

"They sent out another engineer weeks later and, of course, that engineer came back with a different report, that I also have. And guess what? That report came back and said that the damage was by water. And under water, guess what? State Farm doesn't have to pay," says Moore.

One year later, in mediation, Moore says State Farm presented only the water report and that's what has these attorneys fired up.

"Our investigation has uncovered the actual documents. The emails, the altered engineering reports, the confessions, the smoking guns if you will, which tell the whole sorry story of State Farm and their corrupt organizations and what they have done to the people of the coast," says attorney Don Barrett.

"We had pictures of the tornadic winds. My house was actually leaking water from the roof before I even left. But it didn't matter. Whatever I said, they just ignored it," says homeowner Glenda Shows.

Shows says State Farm ignored her and according to attorneys, they also ignored more than 150 other homeowners.

"These are not vague charges in this RICO complaint that we've filed. They are specific charges of specific detailed conduct that when taken together for the first time shows the country the whole story of what State Farm was doing and when they were doing it," Barrett said.

"When this case is over the true wrong-doing of State Farm will be told," says Moore.

In addition to concealing reports from engineering companies, The Scruggs Katrina Group also accuses State Farm of having mock mediations with E.A. Renfore Company in order to "demoralize policy holders." They also say State Farm was negligent in adhering to its good neighbor marketing and sales promise.

State Farm was quick to respond to Scruggs' latest lawsuit, with a statement saying, "This is Scruggs, using one of the oldest tricks in the book. If attacked, deflect. As he said himself last summer, 'If you don't win it, spin it.'"

The attacks company spokesman Phil Supple was referring to have come in the past week.

First, an Alabama federal judge called for Scruggs to be prosecuted for violating a court order dealing with how he obtained internal State Farm documents.

The other attack came Tuesday from State Farm when the company filed court papers to bar Scruggs from insurance cases, accusing him of ethics violations.