Jury finds that Unum defrauded U.S.

A Boston federal jury found that disability insurer Unum Group committed fraud against the United States in some of its disability cases.
OCT 24, 2008
By  Bloomberg
A Boston federal jury found that disability insurer Unum Group committed fraud against the United States in some of its disability cases. The Chattanooga, Tenn.-based disability insurance provider had allegedly required some of its customers to apply for Social Security benefits despite knowing that the claimants weren’t eligible for benefits. The jury’s decision was based on a sampling of six cases, two of which were found to be fraudulent. Two other cases had no evidence of fraud, while the jury was unable to reach a decision on the remaining two cases. The case against Unum was filed on behalf of the Social Security Administration under the Federal False Claims Act by Patrick J. Loughren, a Pittsburgh attorney. The plaintiff accused the insurer of threatening claimants with a slash in their benefits if they didn’t apply for Social Security. In future hearings, both sides will seek a conclusion on what the sample of six cases indicates about Unum as well as the overall impact its actions had on the Social Security program. Late yesterday, both sides also clashed publicly over what the jury’s decision really meant. Phillips & Cohen LLP, the Boston law firm that represented Mr. Loughren, said that the insurer had enriched itself and “admitted” during the trial that it told “many of its customers” to apply for disability under Social Security, thus reducing its claims reserves and increasing profitability. But Unum said that the law firm’s statement was “misleading and filled with inaccuracies,” asserting that the two claims decided in his favor resulted in an award of less than $3,000. “Of the two remaining claims decided in favor of the plaintiff, we continue to believe they have no merit, and we think we will ultimately prevail upon appeal,” Chris Collins, Unum’s senior vice president and general counsel, said in a statement.

Latest News

The 2025 InvestmentNews Awards Excellence Awardees revealed
The 2025 InvestmentNews Awards Excellence Awardees revealed

From outstanding individuals to innovative organizations, find out who made the final shortlist for top honors at the IN awards, now in its second year.

Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty
Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty

Cresset's Susie Cranston is expecting an economic recession, but says her $65 billion RIA sees "great opportunity" to keep investing in a down market.

Edward Jones joins the crowd to sell more alternative investments
Edward Jones joins the crowd to sell more alternative investments

“There’s a big pull to alternative investments right now because of volatility of the stock market,” Kevin Gannon, CEO of Robert A. Stanger & Co., said.

Record RIA M&A activity marks strong start to 2025
Record RIA M&A activity marks strong start to 2025

Sellers shift focus: It's not about succession anymore.

IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients
IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients

Platform being adopted by independent-minded advisors who see insurance as a core pillar of their business.

SPONSORED Compliance in real time: Technology's expanding role in RIA oversight

RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.

SPONSORED Advisory firms confront crossroads amid historic wealth transfer

As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.