NEW ORLEANS — A Texas-based law firm that’s the subject of FBI and state police investigations for allegedly committing the largest insurance fraud in Louisiana history, has filed for bankruptcy in Houston.
MMA Law Firm, formerly known as McClenny Moseley & Associates, seized on the destructive 2020 and 2021 storm seasons to move into the Louisiana market in 2021 and used automated text messages and online clicks to sign up about 15,000 Louisiana homeowners as clients.
Among other aspects of MMA’s alleged fraud scheme, courts found MMA signed up storm victims as clients without their knowledge, using computerized signatures. Judges determined MMA collected at least $20 million in insurance checks without sending the money to policyholders, filed lawsuits against the wrong insurance companies on several claims that expired before the homeowners knew about it and lied to insurers to negotiate settlements for hundreds of policyholders who never even heard of MMA.
In a secret recording obtained exclusively by WWL Louisiana last year, MMA founder Zach Moseley admitted much of the alleged scheme to his staff in New Orleans. He said the firm represented a roofing company but instead told the insurers that MMA represented the roofer’s customers to collect payments. He also acknowledged in the recording to signing up clients in prohibited ways and to trying to get other law firms to take MMA’s cases so the firm could keep operating “in the background” so the courts wouldn’t know.
As a result, the firm left victims of Hurricanes Laura, Delta, Zeta and Ida scrambling for money to rebuild months or years after they should have received insurance payments. Some of them managed to hire new lawyers in time to get insurance companies to stop payments on checks issued to MMA and send them new checks, but many did not.
The Louisiana Insurance Commissioner levied a record fine against MMA in February 2023. The company and its principals, James McClenny, Zach Moseley and William Huye, owe a combined $2 million. MMA’s bankruptcy filing says it still owes the Louisiana Insurance Department the $500,000 fine.
The firm’s attorneys were blocked from practicing law in Louisiana, although Texas records show McClenny and Moseley are still active members of the bar there.
MMA filed for Chapter 11 protection on April 9, the same day a hedge fund was seeking a $36 million judgment against the law firm in civil court.
Right before a judge was scheduled to rule on Equal Access Justice Fund’s motion for summary judgment against MMA, the law firm filed in the Southern District of Texas Bankruptcy Court, automatically stopping all lawsuits against it.
In its bankruptcy filing, MMA estimates assets between $100 million and $500 million. But the firm’s former attorneys stated in court last August that the firm’s “financial viability (is) doubtful.”
Bankruptcy is just MMA’s latest effort to avoid paying millions of dollars. MMA’s founding partner, Zach Moseley, bragged in online videos that his firm was “helping more people
In its bankruptcy filing, the law firm estimates owing more than 200 creditors between $10 million and $50 million. But it also filed a list of its 20 largest creditors, which alone totals almost $30 million. That group doesn’t even include the $36 million claimed by the hedge fund, which would bring the total owed by MMA to more than $65 million without counting at least 180 more debts that haven’t been listed yet.
None of the claims MMA listed in the Top 20 were filed by storm victims, but creditors have until August 13 to file a claim.
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