We were hired by outside counsel for a Fortune 100 company to perform a forensic accounting and IT investigation. The company, a provider of personal lines property and casualty insurance, allegedly hired fraudulent engineering firms in connection with homeowner claims associated with the 1994 Northridge, California, earthquake. The investigation was in response to a FBI and Department of Justice investigation of allegations made against the company.
We worked closely with outside counsel and senior management to identify, analyze, and investigate approximately 50,000 catastrophe-related homeowner claims. We gained an in-depth understanding of the company’s claims-handling process and the company’s information sources in order to identify those claims that met the criteria established by the company’s legal team. Information was collected from various sources including company systems and more than 150,000 hard-copy claim checks, and through the review of actual physical claim files. Our forensic procedures included: electronic review of adjusters’ diary log script; imaging and coding of physical checks; and, completion of an early case assessment of claims files documents, which resulted in a comprehensive keyword terms sheet. We developed an electronic tool to search the company’s claims diaries using the keyword terms in order to identify additional information and documents for review and analysis.