In February 2023, the Louisiana Insurance Commissioner imposed a record fine on MMA.
NEW ORLEANS — A Texas-based law firm under investigation by the FBI and state police for allegedly committing the largest insurance fraud in Louisiana history has filed for bankruptcy in Houston.
MMA Law Firm, formerly known as McClenny Moseley & Associates, is taking advantage of the devastating storm seasons of 2020 and 2021 to enter the Louisiana market in 2021 with automated text messages and online clicks. has been used to enroll approximately 15,000 Louisiana homeowners as customers.
Among other aspects of MMA's alleged fraud, the court found that MMA used computerized signatures to register Storm victims as customers without their knowledge. The judges found that MMA collected at least $20 million in insurance checks without remitting them to policyholders and against the wrong insurance companies for some claims that expired without homeowners' knowledge. It determined that the company filed lawsuits and negotiated settlements with hundreds of policyholders who lied to insurance companies and did not pay policyholders. I asked about MMA.
In a secret recording obtained exclusively by Louisiana WWL last year, MMA founder Zach Moseley admitted many of the alleged plots to his New Orleans staff. He said the company told the insurance company that it was representing the roofing company, but that MMA was collecting payments on behalf of the roofing company's customers. He also said in the recordings that he registered clients in prohibited ways and that his firm operated in the “background” by having other law firms take on MMA cases without the court's knowledge. He also admitted that he was trying to make sure he could continue.
As a result, the company is leaving victims of Hurricanes Laura, Delta, Zeta, and Ida competing for rebuilding funds months or even years after they should have received insurance benefits. did. Some managed to hire new lawyers in time to get insurance companies to stop paying checks issued to MMA and send new checks, but many did not.
In February 2023, the Louisiana Insurance Commissioner imposed a record fine on MMA. The company and its presidents James McClenny, Zach Moseley and William Huey collectively owe $2 million. According to MMA's bankruptcy filing, the company still owes a $500,000 fine to the Louisiana Department of Insurance.
The firm's attorneys were barred from practicing law in Louisiana, but McClenny and Moseley are still practicing law there, according to Texas records.
MMA filed for Chapter 11 protection on April 9, the same day the hedge fund sought a $36 million judgment against the law firm in civil court.
Just before a judge was scheduled to rule on the Equal Access Justice Fund's motion for summary judgment against MMA, the law firm filed a motion in the Bankruptcy Court for the Southern District of Texas to automatically terminate all cases against the Fund. It stopped.
In its bankruptcy filing, MMA estimates its assets at between $100 million and $500 million. However, the company's former lawyers said in court last August that the company's “financial viability is in doubt.”
Bankruptcy is just the latest effort by MMA to avoid paying millions of dollars. MMA founding partner Zach Moseley boasted in an online video that his company is “helping more people”
The law firm estimates in its bankruptcy filing that it owes between $10 million and $50 million from more than 200 creditors. However, the company also submitted a list of its 20 largest creditors, which alone total about $30 million. This group does not even include the $36 million claimed by hedge funds, and without including at least 180 unlisted debts, MMA's total debt would be more than $65 million.
None of the MMA claims listed in the top 20 were filed by storm victims, but creditors have until August 13 to file their claims.
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