Firm hired to remove migrants from Florida faces insurance fraud allegations [Orlando Sentinel]

TALLAHASSEE — A Canadian company has been paid $45 million by Florida to transport migrants out of state and provide disaster recovery services while defending itself in court against accusations of insurance fraud involving storm clean-up efforts.

ARS Global signed a contract with the Department of Emergency Management in May to provide migrant relocation services, six months after donating at least $99,980 to Gov. Ron DeSantis’ reelection campaign.

“It definitely strikes me as pay to play and awarding contracts based on campaign donations,” said Michael Barfield, lead investigator for the non-profit Florida Center for Government Accountability.

Political opponents of DeSantis have called migrant relocation flights a taxpayer-financed political stunt to bolster his failed presidential campaign’s anti-immigration platform.

Between making the DeSantis donation and getting the state contract, a storm of lawsuits were filed against ARS Global and Houston law firm McClenny Moseley & Associates, accusing them of generating huge legal fees by filing inflated damage claims for hurricane victims in Florida, Louisiana and Texas.

“This is a massive illegal insurance scheme like no other,” said Matthew Monson, a New Orleans area attorney. He represents an insurance company in a lawsuit alleging a scheme to recruit clients and share profits with ARS Global.

The fallout from the lawsuits has left thousands of homeowners waiting on claims to pay contractors so they can finish repairing their homes while the courts sort out the legal mess. And it’s led to multiple legal filings involving ARS, the law firm and former employees.

U.S. Chief Magistrate Judge Michael North of New Orleans said the law firm had “engaged in a pattern of misconduct never before seen here.”

“The record in these cases establishes that they have undertaken a brazen, multi-faceted campaign to enrich themselves with ill-gotten contingency fees paid to them by unwitting insurance companies ostensibly on behalf of named insureds that they and their firm did not represent,” North said.

The McClenny law firm’s founding partner, Zach Moseley, did not respond to a request for comment.

The Louisiana Department of Insurance has fined the law firm $2 million. Louisiana Insurance Commissioner Jim Donelon called it an “illegal insurance scheme.”

The department has also turned over its investigative file to the FBI, said David Caldwell, general counsel for that agency. And the Louisiana State Police force has launched its own criminal investigation.

Monson said he wondered if anyone in the DeSantis administration “knew of these allegations or developments when they decided to award this contract.”

Did Florida know?

Kevin Guthrie, Florida Emergency Management director, wouldn’t say whether he knew about the lawsuits when he signed the contract with ARS last May.

But a spokesman for Chief Financial Officer Jimmy Patronis, whose office is responsible for overseeing insurance fraud investigations in Florida, said the agency is aware and closely monitoring the situation to see if it affects Florida.

“If and when the department has information to share regarding a specific case, we will make that available,” spokesman Devin Galetta said.

The governor’s office didn’t respond to a request for comment.

In the nine months since the contract with ARS Global was signed, the company has received $44.98 million, state records show. At least $3 million was for undocumented migrant relocations and $41.97 million for the broad category of “public assistance – state operations.”

ARS received another $1.46 million on Feb.12, shortly after the Orlando Sentinel reported that it was behind a group distributing flyers advertising relocation services for migrants at Latino churches.

The total includes $18.5 million for the Israel evacuation flights conducted after the war with Hamas broke out and ground transportation, said DEM spokeswoman Alecia Collins.

It also includes nearly $13.9 million for several temporary base camps for recovery operations following Hurricane Idalia’s rampage through North Central Florida’s farm and fishing communities, Collins said.

A key figure in the lawsuits is Nathan Normoyle, a former vice president of ARS Global who signed the state contract for migrant relocation services in May. He declined to answer questions from the Orlando Sentinel.

Normoyle deferred all comment to Scott Jacobi, chief financial officer for ARS Global. Jacobi referred questions to a public relations firm, which provided a statement saying Normoyle stepped down in light of the misconduct allegations.

“Given the ongoing legal proceedings, we are unable to provide further details at this moment,” the statement said.

Guthrie said in an email to the Orlando Sentinel that he didn’t recall when he first met Normoyle, “but it could have been (during) Hurricane Ian recovery efforts.”

He also said they could have met during a hurricane conference in New Orleans. But Guthrie said they didn’t discuss hiring ARS Global.

“When I am engaged by an individual that wants to do business with us, I send them to the following link on our website,” Guthrie said.

ARS made the $99,980 donation to Friends of Ron DeSantis, the governor’s political committee on Nov. 3, 2022, four days before Floridians went to the polls and re-elected DeSantis by a 20-point margin.

Two months later, ARS Global hired lobbyist Brian Ballard, a DeSantis ally, and his colleagues Adrian Lukis and Courtney Coppola, who both previously worked in the governor’s office. Since then, ARS Global has paid Ballard partners between $100,000 and $139,996 to represent its interests before the Florida Legislature, records show.

On May 10, Guthrie signed the contract with Normoyle. In June, Normoyle donated $2,500 to DeSantis’ presidential campaign. Normoyle said he didn’t recall that and if he did, it was done by someone else in his name.

ARS Global and their business partners came to Fort Myers the day after Hurricane Ian made landfall on Sept. 28, 2022. They set up their base camp near the Fort Myers airport to process hurricane claims, according to court filings.

“They swept in like they were our saviors,” said Edna Luther, a condominium unit owner whose board of directors hired ARS to remove the smashed boats, cars and other debris, muck out their units and gut their damaged buildings.

ARS Global sought out customers among the severely damaged condominiums along Sanibel Harbor and Fort Myers Beach and recommended they use McClenny Moseley as their lawyer, Luther said.

But before Fort Myers, ARS Global and the law firm were working together in Texas and Louisiana to drum up clients from hurricanes Delta, Laura and Ida. McClenny Moseley opened offices in Louisiana in 2021, after the deadly Category 4 Hurricane Ida swept through the state that August, eventually signing up more than 4,000 clients.

ARS Global, which has been in the disaster response business for decades, invested $3 million with McClenny Moseley to generate client leads in return for profits of up to $17 million, according to court records.

ARS Global set up shop in Texas and created a subsidiary, Global Estimating Services, to generate property damage estimates, court records said.

It hired Velawcity, a Phoenix-based company that specialized in legal advertising, to generate clients whose homes were damaged by hurricanes Ida and Ian. By the time the law firm was forced by court order to shut down its operations, it had spent $13.9 million on Velawcity and filed thousands of claims in Louisiana and Texas, and 700 in Florida, court records say.

By late 2022, federal judges across Louisiana had seen their dockets filling up with hundreds of hurricane-related claims filed by McClenny Moseley, much more compared to other law firms. In less than three months, it had filed 1,600 cases compared with the 200 to 300 filed by other firms in the Western District of Louisiana.

“Tell your partners in Houston to stay the frick out of my court with this kind of trash,” U.S. Judge James D. Cain of the Western District of Louisiana told lawyers in November 2022, according to a transcript reported by the Times-Picayune/Advocate.

A review of those cases found that McClenny Moseley had filed duplicate claims, some against the wrong insurance company, or on behalf of clients who didn’t retain them as counsel, or who had already settled with their insurance companies, court records say.

Lawyers disbarred

Within the first few months of 2023, federal courts issued sanctions against the firm and the Louisiana Supreme Court disbarred its Louisiana-based lawyers. Global Estimating Services fired its field inspectors, who in turn sued for overtime and bonuses they allege were promised to them.

Legal action from homeowners, contractors and investors quickly followed suit, including class action litigation in Texas claiming damages of more than $5 million. No such lawsuits have been filed to date in Florida.

ARS Global and its partners sued each other as well.  ARS Global sued the law firm over its $3 million investment, accusing it of fraud. Global Estimating Services sued McClenny Moseley over the $10 million it claims it is owed for field inspections.

Seventeen of those field inspectors in turn sued ARS and Global Estimating Services over unpaid overtime and bonuses, claiming their boss “willfully violated” federal labor laws.

“Why this is important to Florida is to force lawyers to disclose any financial investments in [any] firm,” Monson said. “When you see people like ARS coming in and doing anything for money, you know it’s wrong.”

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