McClenny Moseley

Key Points

• Fraud Allegations: MMA is accused of filing thousands of fraudulent hurricane-damage lawsuits in Louisiana, often without clients’ knowledge, leading to state and federal criminal investigations.

• Bankruptcy Filing: The firm filed for Chapter 11 bankruptcy in April 2024, reporting $155 million in assets and $106 million in debts, amid mounting legal and financial pressures.

• Regulatory Penalties: The Louisiana Department of Insurance imposed a record $2 million fine in 2023 for deceptive practices and failure to disburse settlement funds.

• Criminal Investigations: The FBI and Louisiana State Police are probing MMA for fraud, forgery, and improper client solicitation, with potential ties to Apex Roofing & Restoration.

• Reputational Damage: MMA’s aggressive “litigation harvesting” tactics and legal troubles have severely tarnished its credibility, impacting clients and partners.

Overview

McClenny Moseley & Associates, now operating as MMA Law Firm, PLLC, is a Houston-based law firm founded in 2016 by James McClenny and John Zachary Moseley. Specializing in property insurance litigation, MMA focused on storm-damage claims, particularly in Texas, Florida, and Louisiana, targeting homeowners affected by hurricanes such as Laura, Delta, and Ida (2020–2021). The firm gained notoriety for its aggressive “tech-enabled” litigation strategy, filing thousands of lawsuits against insurers on behalf of homeowners, often leveraging marketing firms and contractors to acquire clients.

MMA’s rapid expansion into Louisiana in 2021, following Hurricane Ida, marked a turning point. The firm reportedly signed up approximately 15,000 clients using automated text messages, online clicks, and partnerships with entities like Apex Roofing & Restoration. However, its practices drew scrutiny from judges, regulators, and law enforcement, leading to allegations of fraud, improper solicitation, and mishandling of client funds. By April 2024, MMA filed for bankruptcy, facing criminal investigations and significant legal challenges.

Allegations and Concerns

MMA faces a litany of serious allegations that have unraveled its operations:

• Fraudulent Lawsuits: Federal and state courts in Louisiana found that MMA filed lawsuits on behalf of homeowners who were unaware of the firm’s representation. Many clients were signed up via computerized signatures or through Apex Roofing’s assignment of benefits (AOB) agreements, without their consent.

• Improper Client Solicitation: The firm allegedly paid millions to marketing firms like Velawcity and collaborated with Apex Roofing to solicit clients, violating state laws against barratry (improper solicitation of legal clients).

• Mishandling Settlement Funds: MMA is accused of collecting at least $20 million in insurance settlement checks without disbursing funds to policyholders, as reported by WWL-TV. Some clients never received payments, while others were unaware of settlements negotiated on their behalf.

• Filing Errors: The firm filed duplicate lawsuits, sued incorrect insurers, or pursued claims that had already been settled, clogging court dockets and harming clients’ legal prospects. U.S. District Judge James Cain Jr. called MMA’s filings “trash” and banned the firm from his court.

• Deceptive Practices: A secret recording obtained by WWL-TV revealed Zach Moseley admitting that MMA misrepresented itself as homeowners to negotiate with insurers, bypassing Apex’s role as a contractor to secure faster settlements.

• Criminal Investigations: The Louisiana State Police opened a criminal probe in October 2023, investigating fraud, forgery, bank fraud, and unlawful solicitation. The FBI followed in June 2024, seeking victims of MMA’s alleged fraud, particularly in Southeastern Louisiana post-Hurricane Ida.

These allegations, substantiated by court rulings and law enforcement actions, indicate systemic misconduct that has drawn widespread condemnation.

Customer Feedback

Customer feedback on MMA is overwhelmingly negative, driven by homeowners who claim they were misled or defrauded. Positive feedback is virtually nonexistent, as the firm’s practices alienated clients and regulators alike.

• Negative Feedback:

  • A former client, interviewed by WWL-TV, stated, “I never hired McClenny Moseley. They took my insurance money, and I got nothing for my home repairs.” This sentiment is echoed in court records, where 25 Apex customers reported to the Louisiana Department of Insurance that MMA represented them without authorization.

  • A former paralegal at MMA, speaking anonymously on YouTube, said, “It made me sick to my stomach to see how they were signing up clients without their knowledge and keeping their settlement checks.”

  • Austin Marks, an attorney at Morris Bart, which took over 1,000 MMA cases, told Roofing Insights, “Our clients thought they were signing with Apex for roofing work, not a law firm taking a huge chunk of their settlement.”

• Positive Feedback: No verifiable positive reviews were found on platforms like Trustpilot, Google Reviews, or social media. Any promotional content on MMA’s website or social media lacks independent corroboration and is overshadowed by legal troubles.

The absence of positive feedback, coupled with widespread complaints, reflects MMA’s failure to maintain client trust. The firm’s reliance on deceptive tactics has left many homeowners feeling victimized, as documented in court filings and media reports.

Risk Considerations

MMA’s operations present significant risks across multiple domains:

• Financial Risks:

  • Client Losses: Homeowners lost access to millions in settlement funds, with some claims expiring due to MMA’s mismanagement, reducing recovery prospects.

  • Bankruptcy Fallout: The Chapter 11 filing halts creditor lawsuits but may limit client restitution, as assets are reorganized. Reported debts of $106 million, including a $500,000 unpaid fine to the Louisiana Department of Insurance, signal financial strain.

  • Litigation Funding Exposure: MMA’s $20 million in loans from hedge funds like Equal Access Justice Fund and EAJF ESQ Fund raises concerns about repayment obligations, potentially impacting creditors and clients.

• Reputational Risks:

  • Fraud Stigma: Allegations of insurance fraud and criminal investigations have destroyed MMA’s credibility, making it a pariah in the legal and insurance industries.

  • Judicial Condemnation: Judges’ public rebukes, such as Judge Cain’s order to “stay the frick out of my court,” have amplified reputational damage.

  • Client Distrust: Widespread media coverage of MMA’s misconduct has eroded trust among former and potential clients, limiting future business prospects.

• Legal Risks:

  • Criminal Prosecutions: Ongoing FBI and Louisiana State Police investigations could lead to charges against MMA’s principals, with potential penalties including fines, imprisonment, or asset forfeiture.

  • Civil Lawsuits: MMA faces multiple malpractice lawsuits and a class action led by Katherine Monson, as well as a $10 million default judgment appeal against PCG Claims.

  • Regulatory Sanctions: The $2 million fine and suspensions of MMA attorneys in Louisiana, with possible Texas bar repercussions, threaten the firm’s ability to operate.

These risks, rooted in documented misconduct and legal actions, position MMA as a high-risk entity for clients, creditors, and partners.

Business Relations and Associations

MMA’s business relations are central to its alleged misconduct:

• James McClenny and John Zachary Moseley: The founding partners, both Texas-licensed attorneys, drove MMA’s aggressive litigation strategy. McClenny reportedly left the firm by 2023, while Moseley remains active despite legal troubles. Garrison Jordan, McClenny’s attorney, told Reuters that McClenny had “no involvement in the Louisiana litigation.”

• William Huye III: MMA’s former Louisiana managing partner, Huye had his license suspended for his role in the fraudulent filings. He is named in the $2 million fine alongside McClenny and Moseley.

• Apex Roofing & Restoration: An Alabama-based contractor, Apex partnered with MMA to solicit clients via AOB agreements. Apex is suing MMA, claiming it was misled about the law firm’s practices, but courts identified Apex as complicit in the scheme. Apex’s attorney, Peter Butler, insists the company committed no crimes.

• Velawcity: A marketing firm paid millions by MMA to generate client sign-ups through automated texts and online campaigns. Velawcity’s role in improper solicitation is under scrutiny in court proceedings.

• Equal Access Justice Fund and EAJF ESQ Fund: Florida-based hedge funds loaned over $20 million to finance MMA’s litigation, but deny knowledge of the firm’s illegal tactics. A class action against the funds was dismissed in September 2024, though plaintiffs are appealing.

• Matthew Monson: An insurance defense attorney who exposed MMA’s irregularities to the Louisiana Department of Insurance, triggering investigations. His wife, Katherine Monson, leads a class action against MMA.

These relationships, particularly with Apex and Velawcity, enabled MMA’s rapid client acquisition but also fueled its legal and regulatory troubles.

Legal and Financial Concerns

MMA’s legal and financial challenges are extensive:

• Criminal Investigations:

  • Louisiana State Police (October 2023): Initiated a probe into MMA and Apex for insurance fraud, forgery, bank fraud, and unlawful solicitation, following a Louisiana Department of Insurance complaint.

  • FBI (June 2024): Launched an investigation seeking victims of MMA’s alleged fraud, focusing on Southeastern Louisiana homeowners post-Hurricane Ida.

• Regulatory Sanctions:

  • Louisiana Department of Insurance (May 2023): Fined MMA, McClenny, Moseley, and Huye $2 million for deception and failure to disburse settlement funds. MMA still owes $500,000 of this fine.

  • Federal and State Courts: MMA attorneys were suspended from practicing in Louisiana’s Western District for 90 days in March 2023, and barred from collecting fees in approximately 200 cases. The Louisiana Supreme Court appointed an attorney to manage MMA’s hurricane-related lawsuits.

• Civil Lawsuits:

  • Malpractice Lawsuits: Former clients have filed multiple lawsuits in state and federal courts, alleging MMA’s mishandling cost them compensation opportunities.

  • Class Action: Led by Katherine Monson, targeting MMA and its litigation funders for improper solicitation.

  • PCG Claims: MMA is appealing a $10 million default judgment in a case brought by PCG Claims.

• Bankruptcy Filing (April 2024):

  • MMA filed for Chapter 11 protection in the Southern District of Texas, reporting $155 million in assets and $106 million in debts. The filing halted a $36 million judgment sought by Equal Access Justice Fund.

  • The bankruptcy court approved Walker & Patterson as MMA’s counsel, despite creditor objections, to aid reorganization.

• Unpaid Debts: Beyond the $500,000 fine, MMA’s bankruptcy filing lists significant creditor claims, including litigation funding debts, which may complicate asset distribution.

These concerns, documented in court records and media, highlight MMA’s dire legal and financial position, with ongoing investigations likely to exacerbate its challenges.

Risk Assessment Table

Severity Scale: Low, Moderate, High, Critical

Expert Opinion

In our expert opinion, McClenny Moseley & Associates represents a cautionary tale of unchecked ambition in the legal industry. The firm’s “litigation harvesting” strategy, enabled by aggressive marketing and questionable partnerships, prioritized volume over ethics, resulting in catastrophic legal, financial, and reputational consequences. The allegations of fraud, improper solicitation, and mishandling of $20 million in client funds, coupled with FBI and state police investigations, suggest systemic misconduct that may lead to criminal convictions. The Chapter 11 bankruptcy filing, while a temporary shield, underscores MMA’s financial instability and inability to address creditor and client claims effectively.

Pros:

• Innovative use of technology to scale litigation, initially attracting significant client volume.

• Secured litigation funding, demonstrating early investor confidence.

Cons:

• Fraudulent practices alienated clients and regulators, leading to investigations and sanctions.

• Bankruptcy and legal battles threaten the firm’s survival and client restitution.

• Reputational damage renders future operations untenable without major reforms.

Cautionary Advice: Homeowners affected by MMA’s actions should contact the FBI’s victim identification portal and seek legal counsel to explore restitution options before Louisiana’s statute of limitations expires. Creditors and litigation funders must brace for prolonged bankruptcy proceedings, with uncertain recovery prospects. Regulators should strengthen oversight of “tech-enabled” litigation and AOB agreements to prevent similar schemes. For the legal industry, MMA’s collapse highlights the need for ethical standards in high-volume litigation, particularly in disaster-prone regions. Stakeholders should avoid engagement with MMA until its legal status is resolved, and any future dealings require rigorous due diligence to mitigate exposure to its toxic legacy.

Key Citations

• FBI Victim Identification Form: https://forms.fbi.gov/mcclenny-moseley-associates-investigation

• Reuters: https://www.reuters.com/legal/fbi-probing-law-firm-mcclenny-moseley-alleged-hurricane-litigation-fraud-2024-06-07/

• Insurance Business America: https://www.insurancebusinessmag.com/us/news/breaking-news/hurricane-law-firm-mired-in-fraud-allegations-files-for-bankruptcy-486057.aspx

• WWL-TV: https://www.wwltv.com/article/news/investigations/david-hammer/mma-files-for-bankruptcy-insurance-fraud-probes/289-a5c0f0e2-b43b-4d00-bd80-1c77fedaad18

• Roofing Insights: https://roofinginsights.com/the-rise-and-fall-of-mcclenny-mosely-roofing-fraud/

• Louisiana Record: https://louisianarecord.com/stories/652115230-louisiana-state-police-opens-criminal-probe-into-embattled-houston-law-firm

• Companies House: https://find-and-update.company-information.service.gov.uk/ (for general verification, no specific MMA listing)

• Louisiana Department of Insurance: https://ldi.la.gov/ (for fine documentation)