American International Group Inc. (AIG) sued under RICO
Carissa Wyant of the Minneapolis / St. Paul Business Journal reported in its July 20, 2007 edition that the Minnesota Workers' Compensation Reinsurance Association and the Minnesota Workers' Compensation Insurers Association filed suit against American International Group Inc. on July 17, 2007 seeking to recover more than $100 million in damages for fraudulent actions and violations of the Federal Racketeer Influenced and Corrupt Organizations Act.
The suit filed in United States District Court for the District of Minnesota alleges that New York-based AIG understated its workers' compensation business in Minnesota for the past 22 years, in order to avoid paying part of a collective statewide fund covering large workplace injury claims. AIG representatives said the company does not comment on ongoing litigation.
The WCRA is a nonprofit association of about 600 members, which was created by the Minnesota Legislature in 1979 to supply reinsurance to all insurers and self-insurers in Minnesota. This reinsurance is used to pay catastrophic workers' compensation claims to injured Minnesota workers.
RICO Law Blog will keep an eye on this one. AIG will likely make a motion to dismiss under Federal Rule 12(b)(6) within the next few weeks.