The first defendant charged in connection with an alleged major property insurance fraud scheme in the aftermath of Hurricane Ida in 2021 in Louisiana appears poised to plead guilty, if federal criminal court records are any indication.
Richard William Huye III, who faces a count of conspiracy to commit wire fraud while working as an attorney for Texas law firm McClenny Moseley and Associates (MMA), is scheduled to tentatively appear at a rearraignment hearing on 28 September, filings in New Orleans’s federal courthouse show.
He is also scheduled to appear at a separate arraignment – or initial plea – hearing about 90 minutes earlier in that same courthouse.
Typically, though not always, rearraignments are held when a defendant agrees to abandon a not-guilty plea as part of a deal with prosecutors rather than proceed toward trial.
Huye’s scheduled arraignment and subsequent rearraignment are in front of federal magistrate Karen Wells Roby and US district court judge William Crain. Huye’s attorney, Sean Toomey, could not immediately be reached for comment.
Court filings allege that Huye, 34, helped MMA open an office in New Orleans just days after Ida struck that region as a category 4 storm and caused widespread devastation.
Prosecutors contend that MMA handled storm victims’ insurance claims and in the process encouraged an Alabama roofing company named Apex to also begin operating in Louisiana. MMA also allegedly convinced Apex that without restrictions it could use so-called assignment of benefits (AOB) forms to control homeowners’ insurance claims.
Most Louisiana homeowners’ insurance policies, however, contained provisions restricting AOBs or first requiring insurers’ approval, according to prosecutors.
Prosecutors maintained that Apex persuaded hundreds of homeowners to sign over their insurance claims and then sent them to MMA. Prosecutors allege that Apex in some instances signed legal agreements on behalf of homeowners without their knowledge.
Huye and MMA are also accused of sending hundreds of insurance companies letters saying they exclusively represented homeowners – while failing to disclose that those clients had signed over their claims to Apex.
Prosecutors charged Huye through a legal document known as a bill of information on 28 August. That bill of information focuses on eight Louisiana homeowners whose property damage claims were hurt by Huye and MMA’s alleged machinations – with most of those victims either not receiving money meant to repair their roofs or having their amount of funds reduced after the withholding of unauthorized attorneys’ fees and expenses.
Like the scheduling of rearraignment hearings, bills of information – as opposed to grand jury indictments – frequently signal a defendant’s intent to plead guilty and cooperate with authorities pursuing other targets related to their cases.
Huye’s bill of information conspicuously refers to an MMA associate of his as “co-conspirator 1”. Though that person is not named, co-conspirator 1 seems to match the description of MMA managing partner Zach Moseley.
Before the filing of Huey’s charging papers, Louisiana federal judges and a state insurance department fraud investigation determined MMA had furthermore used an online advertising agency named Velawcity to sign up thousands of people victimized by storms. Louisiana’s legal ethics code forbids paying non-attorneys to sign up clients.
MMA was later forced to forfeit its clients, and Louisiana disbarred Huye from being able to practice law in the state. Louisiana’s insurance commissioner also imposed a record $2m in fines on him, Moseley and MMA.
MMA filed for federal bankruptcy protection in Houston in 2024, seeking to liquidate. And in July, Louisiana’s supreme court ruled MMA could not collect any fees from law firms that took over its clients’ cases after forfeiting them if it is proved they were illicitly or unethically signed up.
Huye’s conspiracy to commit wire fraud charge could carry up to five years in prison and a fine of about $250,000.
Yet defendants who plead guilty prior to a trial do not usually face the harshest punishments possible.
Huye has moved from New Orleans to Austin, Texas. The case centering on him and MMA is one of two significant federal insurance fraud prosecutions in Louisiana.
The other of those prosecutions saw more than 60 people convicted in a scheme involving people who intentionally got in car accidents with 18-wheelers to file fraudulent insurance claims.
A federal jury at the New Orleans US district courthouse on 3 September deadlocked on murder charges faced by two key figures in the case: Sean Alfortish and Leon “Chunky” Parker, who were accused of working together to have a certain witness assassinated. That led to the declaration of a mistrial on those murder counts, though the jury convicted Alfortish – himself a disbarred attorney – of fraud charges.
Prosecutors have vowed to retry the murder case against Alfortish and Parker.
