"Steve expressed being afraid that if the insurance regulators ever caught up with what he was doing, his profits would dry up," Linke said. In an interview, Slepcevic called Linke's statement "a lie."
Over the years, Paramount developed an unusual business strategy: presenting itself as a one-stop disaster recovery shop. It offers to estimate damage, negotiate with insurers and help fix or rebuild damaged property, according to interviews and contracts filed in court records. In return, even if it does no repair work, the company frequently charges clients 20% of their insurance settlements, the contracts show.
For The Record
Los Angeles Times Tuesday, August 04, 2009 Home Edition Main News Part A Page 4 National Desk 1 inches; 35 words Type of Material: Correction
Disaster recovery: An article in the July 5 Section A about the disaster recovery industry said that half of states license public insurance adjusters. According to the National Assn. for Insurance Commissioners, 46 states do.
For The Record
Los Angeles Times Sunday, August 09, 2009 Home Edition Main News Part A Page 4 National Desk 1 inches; 35 words Type of Material: Correction
Disaster recovery: An article in the July 5 Section A about the disaster recovery industry said that half of states license public insurance adjusters. According to the National Assn. for Insurance Commissioners, 46 states do.
Typically, these services are provided separately. Public adjusters negotiate claims, usually charging a 5% to 10% commission. General contractors oversee repairs, taking up to 10% profit.
Providing both services is illegal in some states, including California, because of the inherent conflict of interest: Both contractors and adjusters stand to benefit when insurance claims are inflated, regulators say. In other states, the law is silent.
Operating in this sometimes fuzzy zone between victim and insurer, Paramount has reaped outsize fees. At times, former clients allege, it has reaped far more than that.
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After hurricanes
Soon after Hurricane Katrina slammed into Louisiana in 2005, Paramount set up shop in a rundown apartment complex in Slidell, La., and a private residence outside Meridian, Miss. Company salesmen fanned out across the disaster area.
Among the new clients were the parishioners of a large brick Greek Orthodox church in Jackson, Miss., which had sustained wind and water damage.
Church officials recall Todd telling them he could help get a favorable settlement with their insurance company. In return, Paramount would keep 20% of the claim, plus expenses.
In May 2006, Travelers Insurance issued a check for $100,000 in the name of the church and Paramount; days later, the entire settlement check was deposited into Paramount's California bank account, according to a church lawsuit against Paramount.
When church officials learned of the settlement, they contacted Paramount and were told a reimbursement check was in the mail. The check bounced, church officials alleged.
Church officials found that someone had forged the endorsement of the parish council president on the back of the original insurance check, the lawsuit says. They again demanded payment, to no avail.
