A Memphis insurance claims firm wants the more than $1 million that it was supposed to receive from West Virginia, but that was instead diverted in an apparent Africa-based fraud scheme, state lawmakers learned recently.
Legislative leaders attending an interim study meeting were told that Sedgwick Claims Management Services sent the state a demand letter in June. It has been relayed to the state’s Board of Risk and Insurance Management, said Mike Sizemore, an official with state Auditor Glen Gainer.
Gainer still believes the state doesn’t owe Sedgwick the money, Sizemore said. He cited a state law that bars the auditor from paying the same legitimate invoice twice.
Sedgwick billed the state $1.07 million in April, for services provided to the state Insurance Commission. The scammers tricked Gainer’s office into sending the payments to a bogus bank account.
Sizemore told lawmakers that the bank that submits payments on behalf of the state, Wells Fargo-Wachovia, likely faces absorbing the loss from the scam.
Nearly $2 million was defrauded in the overall scheme, which also targeted other vendors. Lawmakers were told that only about $147,000 has been recovered.
A Kenyan arrested in North Carolina remains jailed on a federal charge in the case. The pending indictment against Angella Muthoni Chegge-Kraszeski alleges she played a role in diverting $919,916 meant for vendor Deloitte Consulting, but does not mention Sedgwick.
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