FOR FURTHER INFORMATION CONTACT
AUSA VICKIE E. LEDUC or
MARCIA MURPHY at 410-209-4885
AUGUST 3, 2007
FOR IMMEDIATE RELEASE
OMAHA PROPERTY AND CASUALTY COMPANY AND EDS AGREE TO PAY $2.48 MILLION TO SETTLE NATIONAL FLOOD INSURANCE OVERPAYMENT CLAIM
Baltimore, Maryland - Omaha Property and Casualty Company (“OPAC”) and Electronic Data Systems Incorporated (“EDS”) have agreed to pay $2,480,000 to settle potential claims against the company under the False Claims Act that it paid for flood insurance losses knowing that those losses were not covered by National Flood Insurance Program (“NFIP”) policies that were properly in place at the time of the loss, announced United States Attorney for the District of Maryland Rod J. Rosenstein.
The settlement resulted from an investigation by the Federal Emergency Management Agency in conjunction with the United States Attorney’s Office for Maryland into OPAC’s and EDS’s performance as part of the “Write Your Own” Program, through which FEMA utilized private insurance companies to sell and administer NFIP policies under their own names on behalf of the federal government. Under the Financial Assistance/Subsidy Arrangement entered into between FEMA and the WYO companies the companies were required to issue policies and to settle claims in accordance with NFIP statutes and regulations.
The settlement agreement resolved claims that OPAC and EDS paid claims under policies that were not properly in place under NFIP rules for the issuance of policies at the times the losses were incurred and that as a result of such failure, OPAC and EDS paid approximately three million dollars in claims for flood losses under 90 NFIP policies that OPAC and EDS allegedly knew should not have been paid. Pursuant to the agreement, OPAC and EDS deny the allegations of wrongdoing and the Government does not concede that its claims are not well founded.
The settlement resolves a lawsuit originally filed by Wayne Lutz, a former EDS employee under the qui tam provisions of the False Claims Act, in which the United States intervened. Enacted during the Civil War, the False Claims Act is the Government’s primary civil tool to combat fraud and abuse in federal programs and procurement.
United States Attorney Rosenstein commended Assistant United States Attorney Jamie M. Bennett and the Department of Homeland Security Office of Inspector General for their work on the investigation and settlement.