“Massive” Insurance Fraud Cost Illinois $524 Million
In Chicago, a company called Total Asset has sued Metropolitan Life Insurance (Metlife) and Prudential Financial insurance providers, claiming that the companies kept over $524 million in unclaimed life insurance that they should have turned over to the state of Illinois. Total Asset is calling the action a “massive fraud” and alleges that the insurance companies should be fined over $1.5 billion under the Illinois False Claims Whistleblower Reward and Protection Act.
The case brought was a qui tam complaint brought by Total Asset on behalf of the state of Illinois. Under Illinois law, life insurance companies must turn over any unclaimed moneys to the state after five years. The complainants allege that instead, Metlife and Prudential “through their massive fraud” filed false records that omitted unclaimed funds totaling over $524 million in order to avoid the obligation of handing over those funds to state custody.
According to the complainants, a large portion of the funds related to policyholders who had died – information that the insurers “knew or should have known.” Complainants allege that instead of escheating the value of the insurance policies and reporting them to the State of Illinois, Metlife and Prudential failed to do both. Further allegations include “questionable conduct” regarding the reporting practices of both companies. They claim that Metlife and Prudential left 4,766 policies unclaimed between April 30, 1988 and April 30, 2010.
Complainants expect Metlife and Prudential to pay more than $1.5 billion in civil penalties and damages under the Illinois False Claims Whistleblower Reward and Protection Act. If this occurs, the whistleblowers could be awarded up to 30 percent of proceeds. For more information on whistleblower and false claims rewards in California, contact us for a free and confidential consultation.