Farm Bureau Financial Accused of Hiding Fraudulent Activities in Lawsuit

Two former top investigators for Farm Bureau Financial Services have filed a lawsuit against the company, alleging fraud, racketeering, and wrongful termination. The suit claims that the management group at the insurer was aware of fraudulent activities conducted by employees but chose not to report these incidents to state regulators. The alleged scheme aimed to shift the financial burden of fraudulent claims and illegal activities onto policyholders and competitors.

The lawsuit, initiated by James Newton and Brent Meskimen on November 15 in Iowa district court, asserts that Farm Bureau Financial engaged in racketeering, obstruction of justice, and various forms of fraud, including mail and wire fraud. Newton and Meskimen contend that they repeatedly informed management about fraudulent actions carried out by Farm Bureau adjusters and agents.

Both plaintiffs were terminated in November 2023 after they expressed intentions to report the fraudulent activities to state regulators, despite being instructed otherwise by their supervisors. Newton had a 13-year tenure at Farm Bureau, ultimately serving as the director of investigations, while Meskimen managed the special investigations unit for the company’s Property & Casualty Insurance division.

Farm Bureau Financial, based in West Des Moines, offers a range of insurance products, including auto, home, life, and property insurance. As of now, the company has not responded to requests for comment regarding the lawsuit.

Lawsuit: Farm Bureau Kept Fraudulent Activity Hidden

The special investigations unit (SIU) at Farm Bureau reportedly uncovered fraudulent activities as early as 2011, yet senior management allegedly failed to inform state regulators. The lawsuit details multiple instances of forgery by employees, including a case involving a Kansas agent who purportedly forged over 900 forms for clients, with some being forged without their consent. Although the agent was terminated, management did not report the incident to the Kansas Department of Insurance Fraud Unit.

Another troubling case involved an Iowa agent who allegedly altered coverage for a loss after a client’s 1991 Ford Mustang was destroyed in a fire. The insured individual was the agent’s father. Newton reportedly urged his superior to refer this incident to the Iowa Department of Insurance Fraud Unit but was informed that the agent would not face any disciplinary action and that the claim would be paid from Farm Bureau’s “slush” fund.

Nebraska Fire Claim

The investigation into a 2023 Nebraska residential fire claim was described by the plaintiffs as “the straw that broke the camel’s back.” The lawsuit alleges that a Farm Bureau adjuster unlawfully entered a detached garage unrelated to the fire scene by using a credit card to pick the lock. This adjuster was subsequently fired.

When Newton and Meskimen raised concerns about this incident with their supervisors, they claim that Farm Bureau management created a shell claim to obscure evidence of the illegal and unfair claims settlement practices from the insured. This shell claim allegedly involved a canceled insurance policy linked to another insured individual from Minnesota, who had no connection to the Nebraska fire claim.

Newton and Meskimen assert that they were later informed by their supervisors that the special investigations unit would cease its involvement with the claim. Their growing concerns about the lack of reporting on fraudulent findings led them to conclude that they could no longer remain silent, particularly in light of the “egregiousness” of the Nebraska fire claim.

The lawsuit names several defendants, including Paul Swinton, assistant general counsel for Farm Bureau; Daniel Pitcher, CEO of Farm Bureau; and Ronald Mead Jr., chief operating officer for property casualty of FBL Financial Group and Farm Bureau.

Topics
Lawsuits
Fraud
Agribusiness

Two former top investigators for Farm Bureau Financial Services have filed a lawsuit against the company, alleging fraud, racketeering, and wrongful termination. The suit claims that the management group at the insurer was aware of fraudulent activities conducted by employees but chose not to report these incidents to state regulators. The alleged scheme aimed to shift the financial burden of fraudulent claims and illegal activities onto policyholders and competitors.

The lawsuit, initiated by James Newton and Brent Meskimen on November 15 in Iowa district court, asserts that Farm Bureau Financial engaged in racketeering, obstruction of justice, and various forms of fraud, including mail and wire fraud. Newton and Meskimen contend that they repeatedly informed management about fraudulent actions carried out by Farm Bureau adjusters and agents.

Both plaintiffs were terminated in November 2023 after they expressed intentions to report the fraudulent activities to state regulators, despite being instructed otherwise by their supervisors. Newton had a 13-year tenure at Farm Bureau, ultimately serving as the director of investigations, while Meskimen managed the special investigations unit for the company’s Property & Casualty Insurance division.

Farm Bureau Financial, based in West Des Moines, offers a range of insurance products, including auto, home, life, and property insurance. As of now, the company has not responded to requests for comment regarding the lawsuit.

Lawsuit: Farm Bureau Kept Fraudulent Activity Hidden

The special investigations unit (SIU) at Farm Bureau reportedly uncovered fraudulent activities as early as 2011, yet senior management allegedly failed to inform state regulators. The lawsuit details multiple instances of forgery by employees, including a case involving a Kansas agent who purportedly forged over 900 forms for clients, with some being forged without their consent. Although the agent was terminated, management did not report the incident to the Kansas Department of Insurance Fraud Unit.

Another troubling case involved an Iowa agent who allegedly altered coverage for a loss after a client’s 1991 Ford Mustang was destroyed in a fire. The insured individual was the agent’s father. Newton reportedly urged his superior to refer this incident to the Iowa Department of Insurance Fraud Unit but was informed that the agent would not face any disciplinary action and that the claim would be paid from Farm Bureau’s “slush” fund.

Nebraska Fire Claim

The investigation into a 2023 Nebraska residential fire claim was described by the plaintiffs as “the straw that broke the camel’s back.” The lawsuit alleges that a Farm Bureau adjuster unlawfully entered a detached garage unrelated to the fire scene by using a credit card to pick the lock. This adjuster was subsequently fired.

When Newton and Meskimen raised concerns about this incident with their supervisors, they claim that Farm Bureau management created a shell claim to obscure evidence of the illegal and unfair claims settlement practices from the insured. This shell claim allegedly involved a canceled insurance policy linked to another insured individual from Minnesota, who had no connection to the Nebraska fire claim.

Newton and Meskimen assert that they were later informed by their supervisors that the special investigations unit would cease its involvement with the claim. Their growing concerns about the lack of reporting on fraudulent findings led them to conclude that they could no longer remain silent, particularly in light of the “egregiousness” of the Nebraska fire claim.

The lawsuit names several defendants, including Paul Swinton, assistant general counsel for Farm Bureau; Daniel Pitcher, CEO of Farm Bureau; and Ronald Mead Jr., chief operating officer for property casualty of FBL Financial Group and Farm Bureau.

Topics
Lawsuits
Fraud
Agribusiness