United States, Texas, Dallas - 02/19/2020 (PRDistribution.com)
Dallas, TX – According to shocking allegations made by Plaintiffs in a Federal Civil RICO Case filed in the United States Federal Court, Eastern District of Texas, five individual defendants abused their officer and directors’ positions and conspired to unlawfully seize control of the 24 companies owned by State Farm Mutual Automobile Insurance Company in order to organize, conduct and maintain a complex criminal conglomerate racketeering enterprise known as “the State Farm Group.” According to the complaint, since 2012, the State Farm Group has operated a complex and intertwined series of racketeering enterprises which unlawfully engage in patterns of racketeering activities including fraud, extortion, robbery, money laundering and bank fraud.
The State Farm Group obscured these alleged criminal activities through the release of fraudulent financial statements including the parent company’s “Annual Report to Automobile Insurance Policyholders,” which is sent annually by mail and wire to policyholders in all 50 states by State Farm Mutual Automobile Insurance Company. The complaint alleges, since 2012, the defendants made fraudulent statements to policyholders misrepresenting the assets, cash flows and expenses of State Farm Mutual Automobile Insurance Company. The complaint states the State Farm Group purposefully abused the term “state farm” in order to cause confusion, engage in bait and switch and deceptive sales practices with the intent to defraud consumers of insurance products and to obtain monies from illegal activities.
The five Individual Defendants named within the suit are Michael Tipsord, Jon Farney, Randall Harbert, Paul Smith and Michael Wey. The complaint alleges the Individual Defendants abused the more than 77 officers’ positions and 38 directorships they hold within the 24 companies owned by the 97-year-old State Farm Mutual Automobile Insurance Company. The purpose of this conspiracy was to illegally seize control of the subsidiary companies to organize, participate, maintain and operate the unlawful State Farm Group’s racketeering enterprise schemes. The complaint outlines how the State Farm Group unlawfully operates more than 7 separate racketeering schemes in a uniform and coordinated manner in order to facilitate, manage and operate the overall racketeering enterprise under the facade of being “a good neighbor,” which is a cornerstone of the racketeering enterprises’ deceptive marketing campaign designed to lull consumers into a “false sense of security” and ownership in order to then defraud the consumer.
The complaint alleges, in 2012, the conspirators changed the trade-names and trademarks owned by State Farm Mutual Automobile Insurance Company and since that time have prolifically abused the term “state farm,” the tri-oval logo and various slogans in order to sow confusion regarding the origination of products, quality of products, value of products and cause consumers confusion as to “which state farm” company actually sold or guaranteed products purchased by consumers. The complaint alleges, since 2012, the State Farm Group has engaged in interstate bait and switch sales frauds, selling fraudulently represented products through national sales centers staffed by unlicensed sales associates.
The unlawful sales schemes used by the State Farm Group defrauded consumers by offering products of a greater value using fraudulent sales practices, while delivering products of significantly lesser value and quality. The sales fraud schemes would have remained undiscovered except the Plaintiffs suffered a catastrophic loss, which revealed the illegal sales activities and showed the racketeering enterprises’ lust for illegal profit by any and all means. The complaint is unique as it brings direct allegations against conspirators who engaged in complex crimes and engaged in wire and mail fraud as part of “normal daily operations” of the racketeering enterprises.
The complaint outlines more than 161 predicate acts under the RICO Act showing the State Farm Group’s unlawful normal operating procedures ranging from sales frauds to the use of criminal “claims practices” while deceptively using the term “state farm” to facilitate the perpetrators’ acts of fraud, intimidation, extortion and robbery. The complaint links prior state and federal court rulings regarding “State Farm’s” unlawful use of third-party attorneys to engage in overt acts of racketeering to current operational racketeering enterprises as part of “daily operations” hidden deeply within the companies owned by State Farm Mutual Automobile Insurance Company.
The complaint directly shows the engagement of two separate third party law firms in acts of robbery, fraud, and fraud upon the court prior to the Federal Suit being filed. About JagrStrat: Our firm conducts objective research services and expands publicly available information not typically reported within traditional media outlets as part of our Truth in Reporting and Accountability (TIRA) Project.
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