Claims Firm Says West Virginia Owes It $1 Million That Was Lost in African Scam

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.

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, who believes the state doesn’t owe Sedgwick the money. He says 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 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. A Kenyan has been arrested on a federal charge in the case.

Topics Claims Virginia