Berkshire is accused in NY lawsuit of workers' comp 'siphoning'

Reuters ^ | Sep 12, 2016 | Jonathan Stempel

[george76]

Berkshire Hathaway Inc has been sued by a New York bicycle courier company over an alleged illegal scheme to cheat employers buying workers' compensation policies.

The complaint, filed late Friday by Breakaway Courier Systems, came as Berkshire's Applied Underwriters unit faces scrutiny over its workers' compensation policies, including some that have been banned by California, Vermont and Wisconsin.

Breakaway, with about 300 employees, accused Berkshire and Applied of "siphoning" premiums through a web of illegal shell companies, with diverted premiums going to unlicensed out-of-state insurers.

The plan amounted to a "reverse Ponzi scheme" where unsuspecting employers expecting to buy affordable policies instead bought costly "reinsurance" requiring them to cover each other's losses, leaving taxpayers on the hook for shortfalls when too many workers are injured on the job, Breakaway said.

...

Berkshire's schemes break multiple laws, including that you cannot collect insurance premiums if you are not licensed

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Berkshire, run by billionaire investor Warren Buffett, has some 90 operating units including the BNSF railroad, Dairy Queen ice cream, and various apparel, energy and industrial companies.

[Fido969]

Buffet is a big Hillary supporters.

A few contributions will sweep it under the rug.

[SES1066]

I aim to avoid such Buffett’s companies like GEICO, DQ and others BECAUSE he basically supports left-socialist causes. If I already own stock and Buffett/BH buys in, I don’t sell it unless it already meets my criteria to sell independently!

[Little Bill]

Friends are friends, enemies are enemies but money is money.

[dragnet2]

I aim to avoid such Buffett’s companies like GEICO

Smart. Berkshire Hathaway and Geico are some of the worst insurance companies known to man.