Charges Dropped Against Firm Accused of Hail Scam in Indiana

Prosecutors in Indianapolis, Ind., have dropped insurance fraud charges against a Florida-based repair company accused of faking hail damage to drum up business after a 2006 storm.

Instead, CPM Construction President Joseph M. Radcliff accepted a diversion agreement in which he admitted there was probable cause for his arrest on a charge of misdemeanor criminal mischief, but didn’t admit any guilt. Radcliff also paid $660 in fines and fees as part of the agreement filed this week in Marion Superior Court. Radcliff will avoid prosecution if he stays out of trouble for two years.

Radcliff originally was charged last fall with 14 felony counts, including corrupt business influence, criminal mischief, insurance fraud and theft. He could have faced up to eight years in prison and a $10,000 fine on each of the most serious charges.

Prosecutors had alleged that CPM Construction offered free wind- or hail-damage inspections to potential customers following a massive hailstorm that damaged thousands of Indianapolis roofs in 2006. Employees then allegedly damaged shingles and siding – sometimes using golf balls in socks – and the company would try to arrange insurance claims to pay for repairs, prosecutors said.

But prosecutors say witnesses revised earlier statements and in some cases backed out.

“We’re disappointed with the outcome,” Marion County prosecutor’s office spokesman Mario Massillamany said. “However, with the weaknesses in getting witnesses to participate in the case, this is the only resolution that’s acceptable.”

Defense attorneys said the diversion agreement showed prosecutors never had much of a case.

The company has denied wrongdoing. CPM – short for Coastal Property Management – is based in Orlando, Fla., according to the company’s Web site. It has an Indiana office in the Indianapolis suburb of Fishers.

The criminal charges stemmed from payments made by State Farm Insurance. State Farm became suspicious of the CPM cases, according to court documents, and the insurance company hired independent firms to examine the damage. Inspectors often found the damage to be too neat or patterned to be real hail damage.

After determining damage wasn’t caused by hail, State Farm often wrote checks to customers to repair what it termed suspected vandalism.

Massillamany said some homeowners didn’t want to deal with the case any longer because State Farm already had covered their claims.

State Farm faces a federal class action lawsuit that contends the insurer denied or would not fully cover some roof damage claims.

Attorney Jennifer Lukemeyer, who is representing Radcliff, said the 33-year-old Windermere, Fla., man is moving on with his life.

“He’s going to rebuild his business and try to regain his name back,” she said.