Federal prosecutors have criminally charged Richard William Huye III, an attorney for a Texas law firm, in connection with what they describe as the largest home insurance fraud scheme in Louisiana in the aftermath of 2021's Hurricane Ida.
Huye, 34, faces a count of conspiracy to commit wire fraud in a bill of information filed against him on Friday in New Orleans's federal courthouse. The document contains the first criminal charges to result from a lengthy investigation into the McClenny Moseley and Associates (MMA) law firm, which drew scrutiny over how it solicited as clients thousands of homeowners victimized by Ida and other potent storms, including some who were purportedly defrauded of their insurance proceeds or had them unduly reduced.
Background of the Alleged Scheme
According to the bill of information, Huye began working for MMA, referred to as "law firm A" in the document, three days after category 4 Ida struck south-east Louisiana in late August 2021. He allegedly opened an MMA office in New Orleans in October of that year while the firm encouraged the Alabama-based Apex roofing company to begin operating in Louisiana.
MMA allegedly advised Apex that it could use assignment of benefits (AOB) forms allowing the roofing company to seek payment directly from homeowners' insurance companies without restriction. However, most Louisiana homeowners have language prohibiting such assignments or requiring prior approval, according to a statement from the office of David Courcelle, the New Orleans US attorney.
Alleged Fraudulent Actions
Apex began signing up hundreds of homeowners with those AOB forms and sent them to MMA for handling, prosecutors allege. The law firm also allegedly instructed the roofing company to sign a legal services retention contract on behalf of those homeowners without their knowledge or authorization.
Huye electronically transmitted "false and misleading letters of representation to hundreds of Louisiana homeowners' insurance companies" in which he and MMA maintained that they represented only the insured, without disclosing their role in the Apex AOBs, Courcelle's office alleged. The firm and Huye also allegedly made "additional fraudulent representations" in other communications, mediations, and court filings where no mention of the roofing company AOBs was made.
Civil Proceedings and Consequences
Federal civil court proceedings in 2023 unearthed the scheme attributed to Huye, MMA, and someone identified in the bill of information only as "co-conspirator 1," who matches the description of firm managing partner Zach Moseley. MMA's counsel acknowledged that the firm sent at least 856 legal letters falsely claiming it represented homeowners but was actually acting for a roofing company. MMA also admitted settling at least nine matters by mediation without disclosing that, Courcelle's office said.
The bill of information outlines the stories of eight Louisiana homeowners whose property damage claims were hurt by the alleged machinations. Most either did not receive money meant to repair their roofs or had the amount reduced after the withholding of unauthorized attorneys' fees and expenses, prosecutors alleged. Prosecutors also alleged that Moseley, described as co-conspirator 1, in some instances "endorsed settlement checks without proper authorization from homeowners and deposited funds earmarked for their damages into [the] bank account" for MMA.
The conspiracy charge against Huye could carry up to five years in prison and a fine of about $250,000 if it leads to a conviction. Prior to Friday's charging papers, federal judges in Louisiana and a state insurance department fraud investigation determined MMA had used an online advertising agency named Velawcity to sign up thousands of storm victims, violating Louisiana's legal ethics code. Louisiana subsequently forced MMA to forfeit its clients and disbarred Huye, who moved to Austin, Texas. The state's insurance commissioner imposed a record $2m in fines on him, Moseley, and MMA. MMA filed for bankruptcy protection in Houston in 2024, seeking to liquidate, and in July, the state's supreme court ruled that MMA could not collect fees from law firms that took over their clients' cases if it's proven they were signed up illegally or unethically.
