Sometimes reading federal tea leaves requires experience and judgment. This time, a calendar may be enough. In my earlier post, No Indictment? Richard Huye’s Hurricane Ida Fraud Charge Looks Like a Guilty Plea Is Coming.
I suggested that the government’s decision to charge William Huye by bill of information, rather than grand jury indictment, strongly indicated that a negotiated guilty plea was coming. Federal prosecutors do not ordinarily file a detailed felony information as an opening conversational gambit.
The Guardian is now reporting that Huye is scheduled for an arraignment on September 28, followed approximately ninety minutes later by a rearraignment. A rearraignment is ordinarily where a defendant withdraws a not-guilty plea and pleads guilty. Courts do not usually schedule one as a dress rehearsal.
I have also now obtained and read the actual charging document in United States v. Huye. 1 It is far more revealing than the Department of Justice press release. The 22-page information charges Huye with a single count of conspiracy to commit wire fraud under 18 U.S.C. § 371. That charge carries a maximum sentence of five years. Yet, the government alleges hundreds of interstate communications that could potentially have been charged as separate substantive wire-fraud offenses carrying significantly greater punishment.
I am not a criminal law expert, but to me, the charging instrument looks negotiated. A single conspiracy count places a five-year ceiling over a factual narrative alleging 856 misleading letters of representation, at least nine mediations, false federal court pleadings, unauthorized attorney fees, forged or unauthorized check endorsements, eight specifically described homeowners, and an alleged plan to obtain at least $40 million.
The government’s theory is also more precise than simply alleging that assignments of benefits were illegal. Indeed, the information concedes that Louisiana law did not prohibit post-loss assignments of benefits at the time.
The fraud allegedly occurred after the roofing company obtained the AOBs. Prosecutors contend that McClenny Moseley & Associates instructed the roofing company to sign attorney-engagement agreements on behalf of homeowners who had never hired the firm. MMA then allegedly sent insurers letters saying it represented the homeowners, deliberately concealed that it actually represented the roofing company through the AOBs, told insurers to stop communicating with their policyholders, and directed that MMA be included on all payments.
The information alleges that claims were settled without homeowner consent, attorney fees and estimating expenses were deducted from repair proceeds, and checks were endorsed using supposed powers of attorney that the homeowners never signed. Several homeowners allegedly received none of the proceeds intended to repair their roofs and had to use personal savings.
Allegations have to be proven, and everyone is entitled to the presumption of innocence. But those allegations present a much more troubling case than a technical disagreement over AOB enforceability. A valid assignment does not authorize a lawyer to manufacture an attorney-client relationship, misrepresent that relationship to an insurer or federal court, or sign and deposit someone else’s insurance check without permission.
Huye’s electronic signature allegedly appeared on the letters of representation and court pleadings. Standing alone, an electronic signature might let him argue that firm systems generated the documents without his personal review. The government attempts to eliminate that defense by alleging that Huye knew the letters were false, supervised lawyers who continued the misrepresentations, participated in mediations, ignored homeowners who questioned why MMA claimed to represent them, and later sent corrective letters acknowledging whom the firm actually represented.
Still, the most devastating words in the information are not attributed to Huye. They are attributed to “Co-Conspirator 1.” The information describes Co-Conspirator 1 as an MMA founding partner who lived in Texas, devised the arrangement, benefited from Huye’s actions, personally endorsed and deposited homeowner checks, and conducted a secretly recorded meeting with MMA employees. During that meeting, Co-Conspirator 1 allegedly said:
“It was my decision to do this. It’s my fault. I’ll take full responsibility for that.”
The speaker then explained that if MMA told insurers it represented the roofing company, they would refuse to negotiate. The solution was to tell insurers that MMA represented the homeowners so the insurers would negotiate and pay faster. Earlier stories from the Insurance Journal attributed those recorded statements to MMA founding partner Zach Moseley. The federal information does not officially identify Moseley as Co-Conspirator 1, and he has not been charged in this proceeding. Still, the government has placed such a detailed name tag on Co-Conspirator 1 that the anonymity is largely ceremonial. The government must prove this allegation, and I now see how it intends to back it up.
The information also portrays Co-Conspirator 1 as the architect while depicting Huye as the Louisiana managing lawyer who implemented the plan. That structure strongly suggests the government is building upward. Huye may be far more valuable to prosecutors as an insider explaining who directed the operation than as a defendant serving a maximum five-year sentence.
Cooperation is not yet established. The document does not contain Huye’s waiver of indictment, plea agreement, or factual basis. Those will be the documents to watch on or before September 28. They should tell us whether Huye agrees with the government’s $40 million figure, whether he expressly identifies the person directing the operation, and whether his plea requires assistance in prosecuting others.
The charging document is not flawless. It contains an obviously incorrect date for the recorded meeting, placing it in March 2022 even though the information says it occurred after the scheme became public in February 2023. The previously reported date was March 6, 2023. It also contains other chronological and forfeiture-language problems that prosecutors may need to correct. Even federal prosecutors occasionally need a good proofreader.
Huye and everybody else involved with this matter remain presumed innocent. An information represents allegations rather than evidence. But the procedural picture has become difficult to misunderstand. The government filed a detailed information rather than seeking an indictment, limited the case to one five-year conspiracy count, described an unnamed senior participant as the scheme’s architect, and scheduled an arraignment followed almost immediately by a rearraignment.
The likely guilty plea is now on the calendar. The more interesting question is who may be next.
Thought For The Day
“Just because you get your law license, you haven’t reached the pinnacle.”
—Zach Moseley
1 Bill of Information, United States of America v. Huye, No. 2:26-cr-00198 (E.D. La.).
