Inspectors in MMA ‘Fraud’ Scheme Sue for Unpaid Bonuses and Overtime

Seventeen former field inspectors for a company that provided damage estimates for McClenney Moseley & Associates filed a lawsuit against their former employer, saying they are owed for bonuses that were promised but never paid and uncompensated overtime.

The plaintiffs say Global Estimating Service and its parent company, Access Restoration Services, duped them into participating in a “potential fraud” against insurers by promising bonuses that would amount to double their annual salary.

“Upon information and belief, it appears that ARS was likely using what were in fact inflated in-house property damage estimates for MMA cases to increase the claim values in those cases,” the lawsuit says.

The lawsuit, filed with the US District Court in Houston, is the latest in a storm of litigation that followed exposure of MMA’s scheme to sign up thousands of clients with hurricane-damage claims by using robotexting and call centers.

ARS and GES, the plaintiffs’ former employer, also sued MMA. ARS alleges it loaned the law firm $3 million and hasn’t been repaid. GES alleges MMA owes it $9.8 million for estimates provided for hurricane claims.

The lawsuit filed by the 17 former GES field inspectors mentions that loan, calling it “suspicious” because ARS said in its lawsuit that it was expecting a $15 million to $17 million return.

“Upon information and belief, it appears that ARS was likely using what were in fact inflated in-house property damage estimates for MMA cases to increase the claim values in those cases,” the field inspectors’ lawsuit says.

Carlos Butler, the lead plaintiff in the inspectors’ lawsuit, said he and the other inspectors were hired to perform field inspections in February 2022, shortly after GES incorporated in Conroe, Texas. The suit Autumn K. Garibay moved from Arizona to Texas to take a position as general manager for GES.

“It was obvious to at least some plaintiffs (perhaps all) that Garibay lacked sufficient industry knowledge to effectively run the GES operation,” the suit says. “More cynically, plaintiffs contend that the alleged fraud using GES could not have been conducted without the direct coordination and control of ARS executives, and that Garibay was selected (in part) specifically due to her lack of appropriate industry knowledge.”

The suit says three of the inspectors met with ARS’ co-owner Guiseppe Gagliano and ARS executives at an office in Spring, Texas on Feb. 10, 2022. They were told they would be paid an annual salary of $82,000 but would also be paid bonuses equal to twice their salary.

The inspectors said they were never paid any bonuses and their salaries were often paid late. The inspectors say they often worked more than 40 hours in a week, particularly when inspecting homes damaged by Hurricane Ian in Florida. The company did not pay overtime even though the inspector’s job duties would not qualify them as professionals exempt from the overtime requirements of the Fair Labor Standards Act.

On April 28 this year, GES notified the inspectors that GES was shutting down. Inspector Chas E. Jochum, one of the plaintiffs, inquired about the promised bonuses. The lawsuit says a human resources representative for ARS said there had never been a plan to pay bonuses to the inspectors.

The lawsuit alleges that GES and ARS willfully violated the Fair Labor Standards Act, breached their contracts with the inspectors and were unjustly enriched. Garibay, Gagliano and ARS executives Michael Needham and Nathan Normoyle are also named as defendants in the lawsuit.

Top photo courtesy of ARS