Richard Huye faces rearraignment in Hurricane Ida insurance fraud case

Case is one of two significant federal insurance fraud prosecutions in Louisiana

The first defendant charged in an alleged major property insurance fraud scheme that prosecutors say exploited homeowners in the aftermath of Hurricane Ida in 2021 appears poised to plead guilty, according to federal criminal court records in New Orleans.

Richard William Huye III, who faces a count of conspiracy to commit wire fraud while working as an attorney for Texas-based law firm McClenny Moseley and Associates (MMA), is scheduled to appear at a rearraignment hearing on 28 September, court filings show. He is also set for a separate arraignment, or initial plea, hearing about 90 minutes earlier the same day in the same courthouse.

Both hearings are before federal magistrate Karen Wells Roby and US District Court Judge William Crain. Huye’s attorney, Sean Toomey, could not immediately be reached for comment.

Rearraignment hearings are typically, though not always, held when a defendant agrees to abandon a not-guilty plea as part of a deal with prosecutors rather than proceed toward trial. Huye was charged through a bill of information on 28 August, a charging mechanism that, unlike a grand jury indictment, frequently signals a defendant’s intent to plead guilty and cooperate with authorities pursuing other targets in the case.

Huye’s bill of information refers to an MMA associate as “co-conspirator 1.” Although the person is not named, the description appears to match MMA managing partner Zach Moseley. According to court filings, Huye, 34, has since moved from New Orleans to Austin, Texas.

Court filings allege that Huye helped MMA open an office in New Orleans just days after Ida struck that region as a category 4 storm in 2021, causing widespread devastation. Prosecutors contend that MMA handled storm victims’ insurance claims and in the process encouraged an Alabama roofing company named Apex to begin operating in Louisiana. MMA allegedly convinced Apex that, without restrictions, it could use so-called assignment of benefits (AOB) forms to take control of homeowners’ insurance claims. Most Louisiana homeowners’ insurance policies, however, contained provisions restricting AOBs or first requiring insurers’ approval, according to prosecutors.

Apex persuaded hundreds of homeowners to sign over their insurance claims and then routed those claims to MMA, prosecutors maintain. In some instances, Apex allegedly signed legal agreements on behalf of homeowners without their knowledge. Huye and MMA are also accused of sending hundreds of insurance companies letters stating that they exclusively represented those homeowners, while failing to disclose that the clients had signed over their claims to Apex.

The bill of information focuses on eight Louisiana homeowners whose property-damage claims were hurt by the alleged scheme. Most of those victims either did not receive money meant to repair their roofs or saw their funds reduced after the withholding of unauthorized attorneys’ fees and expenses.

Before the criminal filing, Louisiana federal judges and the state insurance department’s fraud investigation had already determined that MMA had used an online advertising agency named Velawcity to sign up thousands of storm victims. Louisiana’s legal ethics code forbids paying non-attorneys to sign up clients. MMA was forced to forfeit its clients, and Louisiana disbarred Huye from practicing law in the state. Louisiana’s insurance commissioner also imposed a record $2 million in fines on Huye, Moseley, and MMA.

MMA filed for federal bankruptcy protection in Houston in 2024, seeking to liquidate. And in July, the Louisiana Supreme Court ruled that MMA could not collect any fees from law firms that took over its clients’ cases after MMA forfeited them, if it is proved those clients were illicitly or unethically signed up.

The conspiracy charge carries up to five years in prison and a fine of about $250,000. Defendants who plead guilty before trial do not typically face the harshest punishments possible.

The case is one of two significant federal insurance fraud prosecutions in Louisiana. The second prosecution has resulted in more than 60 people convicted in a separate scheme in which participants intentionally collided 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 against two key figures in that second case, Sean Alfortish and Leon “Chunky” Parker, who were accused of working together to have a witness assassinated. The deadlock led to a mistrial on the 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.