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Sisters Blew Whistle on Katrina Claims

Saturday, August 26, 2006 7:36:23 PM
By MICHAEL KUNZELMAN

Cori and Kerri Rigsby (left to right) tell their story, Thursday, August 17, 2006 in their home just outside of Ocean Springs, Miss. The Rigsby sisters told their story to Richard "Dickie" Scruggs as well as state and federal authorities probing the insurance industry's handling of Hurricane Katrina claims. For months, the Rigsbys secretly collected reams of reports, memos and emails that Scruggs cites as proof that State Farm defrauded policyholders after Katrina. The sisters also claim the company has shredded many more potentially incriminating documents. (AP/Nicole LaCour Young)                                 OCEAN SPRINGS, Miss. (AP) - Who are the moles? The question was like a parlor game for employees of State Farm Insurance Co. after Hurricane Katrina, one they nervously played during coffee breaks or in the parking lot after work.

Richard "Dickie" Scruggs, a prominent lawyer of tobacco litigation fame, created a stir by announcing in March that two "insiders" were helping him build cases against insurers for denying claims for Hurricane Katrina losses. Their identities remained a mystery until the day in early June when Cori and Kerri Rigsby — employees of a company that contracted with State Farm — told a supervisor they were cooperating with Scruggs.

That startling admission — and their subsequent resignations — ended a risky charade. The Rigsbys say they spent months collecting reams of internal State Farm reports, memos, e-mails and claims records before they gave them to Scruggs and state and federal authorities.


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