Suit Accuses Insurers Of Defrauding Government Over Katrina Damage

A 2006 lawsuit filed by two sisters, now known as insurance whistleblowers, has been unsealed by a federal judge. Judge Robert Walker ordered the case open to public view and said the Justice Department is now considering stepping into the case.

The lawsuit filed by Cori and Kerry Rigsby details allegations that four insurance companies, State Farm, Nationwide, Allstate and USAA, and six engineering firms set policies and changed reports to deny Katrina claims, as well as defraud the federal government. All have denied wrongdoing.

The court papers were sealed in April 2006. The federal government argued that was necessary while it investigated the case.

In his order unsealing the case, Judge Walker said the government offered no explanation how opening the documents would hurt its investigation.