There are insurance cases, there are criminal cases, and then there are cases where you start reading the emails and feel like somebody should hand you a magnifying glass and a trench coat. The continuing Ricky McGraw saga may be turning into the latter.

McGraw and SFR Services recently filed a federal lawsuit against Tower Hill entities, their attorneys, and several individuals associated with Tower Hill and the Florida Department of Financial Services. The complaint alleges a years-long scheme involving civil litigation, criminal referrals, coordination with state investigators, and ultimately the destruction of McGraw’s business. Those are serious allegations. They are allegations only. The defendants are entitled to contest them, and nobody accused of wrongdoing should be presumed guilty merely because a complaint says so.

But emails make the story worth following. The complaint alleges that Tower Hill’s civil lawsuit was used as a discovery device to provide information to DFS in an effort to have McGraw criminally prosecuted. It specifically identifies Carl Nemeth of Tower Hill’s Special Investigations Unit, along with DFS personnel Glen Clasen and Rebecca Prince-Swift, as central participants. The complaint also alleges that, on at least one occasion, Tower Hill asked DFS to “delete” evidence it had provided to the agency.

We now have an email exchange that appears to shed some light on that allegation. In February 2024, Nemeth told DFS that allegedly privileged information had inadvertently been included in claim files. He asked that the existing links be deleted or returned so Tower Hill could provide replacement files with the privileged material removed.

There is nothing inherently sinister about that. Privileged documents get inadvertently produced. Clawback requests happen. Lawyers have been known to send an email and immediately wish for a large red “undo” button.

Then came the sentence that caught my attention. DFS investigator Rebecca Prince-Swift responded:

“Ok I am deleting all the information received thus far.”

“All the information received thus far” sounds broader than “I am segregating the privileged documents.” Perhaps there is a perfectly innocent explanation. But lawyers become professionally annoying when somebody uses broader words than seem necessary.

What exactly was deleted? What was in the original files? What was in the replacement files? What disappeared between versions one and two? And was everything removed actually privileged? Those questions become more interesting when placed into the chronology alleged in the complaint.

Plaintiffs allege that Tower Hill’s SIU and DFS had been exchanging information regarding McGraw and SFR since 2019 and 2020, including material obtained through the civil litigation. They further allege that in 2021 Tower Hill, its SIU personnel, counsel, and DFS met to discuss allegedly inflated claims and identify claims considered sufficiently “egregious” to support fraud and racketeering theories. Tower Hill allegedly prepared a PowerPoint presentation for DFS and discussed presenting the matter to prosecutors.

The complaint alleges that prosecutors concluded in October 2021 that the allegedly inflated estimates appeared to involve a civil dispute and that probable cause for criminal prosecution was lacking. It alleges that Nemeth nevertheless continued pressing prosecuting authorities regarding McGraw.

Again, those are allegations, not established facts. Still, an obvious question remains: how did a matter allegedly considered insufficient for criminal prosecution in 2021 eventually become a felony prosecution in 2023?

That question deserves consideration in the broader context of what was happening in Florida property insurance at the time. Florida was engaged in an extraordinary political fight over property insurance. Contractors, roofers, public adjusters, assignments of benefits, attorneys, litigation, and insurance fraud were repeatedly blamed for increasing premiums and market instability. Florida passed significant property insurance legislation during this period, much of it aimed at litigation, roofing practices, assignments, and suspected fraud.

Then-CFO Jimmy Patronis was also making insurance fraud enforcement a highly visible priority, announcing specialized fraud squads aimed at contractor schemes, allegedly inflated claims, roofing fraud, and organized insurance fraud. None of that proves Ricky McGraw was prosecuted to advance an insurance-industry legislative agenda. Indeed, McGraw’s criminal charges were filed in late 2023, after much of the major 2021 and 2022 legislation had already passed.

But according to the complaint, the investigation and coordination involving McGraw had been occurring during the very years when Florida’s insurance industry was pushing for major legislative changes. When McGraw was eventually arrested, his alleged conduct was publicly connected to the broader problem of rising insurance costs.

So, the fair question is not whether we have discovered some grand conspiracy. We have not.

The fair question is whether McGraw was simply the subject of an ordinary, independently developed criminal investigation or whether he became a particularly convenient poster child for the larger narrative that contractors, inflated roof estimates, litigation, and fraud were responsible for Florida’s property insurance problems.

I do not know the answer. But I know what documents I would want to see. I would want the complete original February 2024 files Tower Hill sent to DFS. Then I would want the replacement files. I would compare them electronically, document by document, and identify every item removed and the privilege claimed for it.

Because the important issue is not whether somebody pressed delete. It is what disappeared when they did. That becomes even more significant because the federal complaint alleges McGraw later had difficulty obtaining evidence for his criminal defense and that Tower Hill and its lawyers repeatedly objected to discovery seeking potentially exculpatory materials allegedly not in the State’s possession.

If a comparison shows that only legitimate attorney-client communications and work product were removed, we will have a perfectly reasonable and somewhat boring answer to this part of the mystery. Boring answers are allowed.

If, however, factual information disappeared—particularly information inconsistent with the fraud allegations, favorable to McGraw, or demonstrating that Tower Hill independently evaluated and voluntarily settled these claims—the story becomes quite different.

The complaint alleges that Tower Hill personnel testified that claims were independently evaluated, disagreements about estimates did not automatically amount to fraud, and claims continued to be settled even after SIU allegedly believed SFR’s estimates were inflated. It also quotes Tower Hill counsel acknowledging during a 2023 hearing that, concerning later claims, he had difficulty claiming fraudulent inducement because the carrier “knew exactly what they were doing.”

Then consider the ending, or perhaps merely the end of Act One. McGraw faced serious felony charges and the possibility of decades in prison. Shortly before trial in January 2026, prosecutors dismissed the criminal case. The complaint alleges that public statements afterward attributed the dismissal to a lack of evidence.

A dismissed prosecution does not establish malicious conduct by investigators, insurers, lawyers, or prosecutors. Nor does it prove that anybody manufactured evidence or participated in a conspiracy. But if a person is publicly portrayed for years as an example of the fraud supposedly harming Florida insurance consumers, and the criminal case ultimately disappears for lack of evidence, it seems entirely appropriate to ask how the case got there.

Now we have emails discussing deleting and replacing information previously supplied to investigators. Maybe there is a good explanation. Maybe there isn’t.

The email and the newly filed federal complaint are attached so readers can examine them. I suspect we haven’t seen the last email, memorandum, or document concerning this story. For now, consider this another installment in the mystery rather than the final chapter.

Thought For The Day

“Insurance fraud like this drives up insurance rates for all Floridians.”
—Jimmy Patronis, former Florida Chief Financial Officer, March 24, 2023.