The allegations point extensive incriminating evidence of fraudulent activities committed and repeatedly breaking an inordinate number of laws revealing a pattern of perpetrating extensive illegal bad faith insurance practices and frauds implicating senior and top level executives at Berkshire Hathaway Inc. Corporate and a senior most top level executive at Cavell USA Inc. a/k/a Cavell America Inc., Pam Hoelsken, Chief Operating Officer. Their combined involvement in the alleged ongoing fraudulent schemes, extensive unlawful activities are estimated to have financially enriched Berkshire Hathaway and the related indicated parties upwards of hundreds of millions to potentially as nuch as many 'billions' of dollars of ill-gotten gains at the expense and defrauding of policyholders, insureds, reinsureds and claimants all avoiding payment of claims.

The Whistleblower allegations of committing and/or knowingly conspiring in such fraudulent schemes, unlawful business activities and bad faith insurance practices intended to defraud policyholders implicate Pam Hoelsken, Chief Operating Officer of Cavell America, Tom Ryan, Vice President of National Indemnity Company, Forrest N. Krutter, Secretary & General Counsel of Berkshire Hathaway Inc. - Snr. Vice President & Director National Indemnity Company (NICO), Ajit Jain, President Berkshire Hathaway Reinsurance Operations-Exec. Vice President National Indemnity Company (NICO), and well-known wealthy business icon Warren Buffett, Chairman & CEO Berkshire Hathaway, Inc.

FBIC Note: FBIC are not lawyers, is neither a court or a judge, does not have subpoena power and does not have the authority to make 'legal’ judgments on the court cases, allegations and evidence provided. With that said, FBIC has researched and confirmed to the best of it’s knowledge the information and allegations as provided by the Whistleblower. FBIC ("badfaithinsurance.org") has spent much of 5 years researching the veracity and reviewing the dockets, legal documents and evidence for the cases provided by the Whistleblower starting in May 2005. FBIC can confirm and verify that all of the public information referenced documents, court cases, allegations and information provided by the Whistleblower exist, and are as provided and/or stated. FBIC (badfaithinsurance.org), without having subpoena power, FBIC was/is unable to confirm some of the 'court protected, privileged and insider information’ Whistleblower allegations.

With five years of ongoing investigation, extensive research, review of the allegations made and the court cases, FBIC acknowledges and strongly supports and agrees with the Whistleblower's information that such extensive, pervasive and systemic illegal bad faith insurance practices and other fraudulent activities committed, much if not most is confirmed through court testimony and documents, and that systemic illegal bad faith insurance practices were (and are presently continuing) repeatedly being committed that unlawfully enriched/enrich Berkshire Hathaway and the accused parties. FBIC further acknowledges the the commission of these fraudulent insurance and reinsurance schemes involving bad faith insurance practices as confirmed by court documents and testimony are systemic and being perpetrated as business-usual ... and by such actions have directly and indirectly caused and continue to cause a significantly large number of U.S. policyholders with the cooperation of reinsured and related insurers with finite and cap cover reinsurance policies, many of which in reality are loans, are causing a multitude of many insured claimants, many of which are sick and dying with terminal illnesses due to the basis of their claims, not to be paid on their (legitimate) claims.

(cont'd) In further light of five senior and top-most level business executives (one from AIG, and four from General Reinsurance, owned by parent Berkshire Hathaway Corporation) being recently convicted in 2008 of fraud in a $500 million reinsurance fraudulent sham scheme, and now presently in 2009 being sentenced to serve prison terms (although all are believed not in prison either on bail and/or without bail, and other cases where General Reinsurance was suspected of similar or related illicit reinsurance type schemes and numerous other suspected complicated frauds including admittedly such as Reciprocal of America Insurance, etc., it is easy to believe and understand that the alleged privileged information and many cases provided to FBIC as represented and alleged by the Whistleblower involve but are not limited to the same or similar 'finite reinsurance’ sham schemes as in the AIG-General Reinsurance case(s) and also alleged and should be suspected by authorities in many other insurance cases, but also incorporate much more extensive illegal acts encompassing far greater dollars estimated to be worth potentially upwards billions of dollars over the past ten years ... and many other cases representing "the tip of the iceberg".

(cont'd) In addition to the substantially higher dollar value involved in these cases than in the U.S. Department of Justice prosecuted $500 million AIG-General Re finite reinsurance scam case, what also separates these cases from the AIG-General Re case is that in FBIC's provided Whistleblower cases, the allegations of illegal wrongdoings are systemic, repeated and business-as-usual and go all the way to the highest and top most levels of the parent Berkshire Hathaway Corporation, implicating top-most level Berkshire Hathaway Corporate execs Ajit Jain, Forrest N. Krutter and the iconic Warren Buffett. .

FBIC Further Note: The many unlawful business and bad faith insurance company claims management practices and alleged fraudulent activities by 'unregulated" reinsurers activities intended to defraud policyholders that go on undetected and behind the scenes are believed to be the reasons why many hundreds of thousands and/or millions of policyholders and claimants are regularly denied and illegally deprived of payment of insurance claims benefits and not receiving proper payment of their legitimate claims. FBIC also believes that the Whistleblower provided cases in-hand represent a rare and important opportunity for law enforcement and The U.S. Department of Justice … and FBIC urges that these cases and allegations be investigated for criminal prosecution, otherwise these illegal activities against Americans and American Business will continue if not escalate unabated.

The following Whistleblower’s allegations of abuse and fraudulent activities committed confirming unlawful business and bad faith insurance practices intended to defraud policyholders include:

• Falsifying Of Financial Records
• Defrauding Of Claimants And Policyholders
• Lying And Defrauding Insurance Commissions
• Maintaining Reserves As Low As 10% Of Established Minimum Statutory $$$ Amounts Required
• Fraudulent Repeated $$$ Transfer, Systematic Stripping And Looting The Treasuries, Reserves, Premiums And Cash Flows Of Numerous Companies It Does Business With, Hastening If Not Responsible For The Insolvency And/Or Demise Of These Companies Leaving Claimants, Creditors And Accounts Payables Owed Unpaid, And Leaving Policyholders With Worthless Or No Coverage
• Writing Finite Insurance Plans That Were/Are Not Insurance But In Reality Were Loans
• Committing Illegal Dealings To Become The Party Responsible To Satisfy The Obligations Of Other Companies Based On Surreptitious Transfer Of Assets And Other Conduct That Falsely, Enriched Berkshire Hathaway Companies And Left These Other Companies Undercapitalized And Unable To Pay Their Claimants Obligations, And Causing Berkshire Hathaway Companies To Become 'In Control’ And The Real Parties-In-Interest Under These Other Companies Policies
• Committing Numerous Other Illegal Acts And Dealings Regarding Tortious Breach Of The Implied Covenant Of Good Faith And Fair Dealing

The Whistleblower alleges that the following one of many lawsuit cases (some ongoing since early 2000) depicts if not confirms some of Berkshire Hathaway's alleged unlawful business and bad faith insurance practices intended to defraud policyholders, frauds, and other abuses.

For example and the first of many cases is: SANTA FE BRAUN, INC., (formerly known as C. F. BRAUN & CO.) VERSUS INSURANCE COMPANY OF NORTH AMERICA, Etal (Case Number CG-04-428686, Superior Court of the State of California, City and County of San Francisco):

The filings of this case support facts that Cavell is a company used by Berkshire Hathaway to falsify financial records and to defraud policyholders and Insurance Commissioners. The following highlights how this is accomplished.

Cavell is the 'designated management claims administrator' for Seaton Insurance Company, Stonewall Insurance Company, and Transport Insurance Company, all of which have finite cap reinsurance policies with Berkshire Hathaway's National Indemnity Company.

Berkshire Hathaway is in 100% control of all claims operations of Cavell for Seaton Insurance Company, Stonewall Insurance Company, and Transport Insurance Company.

Berkshire Hathaway has positioned a representative, Tom Ryan, at Cavell's office to control the claim payments for these companies. Mr. Ryan is a Vice President of NICO (National Indemnity Company) reporting to senior Berkshire Hathaway executives Forrest Krutter and Ajit Jain.

The high level of control Mr. Ryan has over the Cavell staff is what allows him to force the claim payments to meet Berkshire Hathaway's planned cash flow.  The staff have often been told that they cannot pay claims or expenses as the cash flow projections for the month have been exceeded - examples of this are mentioned later on.

Tom Ryan also will make a claim decision in order to increase Berkshire Hathaway's cash flow for a period of time.

Tom Ryan has stated that he often has had to brief the chairman (Warren Buffet) on this case and others, and that the chairman is familiar with it.

Ajit Jain (Exec. V.P. NICO, head of Berkshire Hathaway's Reinsurance Operations and a Snr. Berkshire Hathaway insurance executive supplies projections for Tom Ryan to follow. Tom Ryan has stated that his bonus and raises are determined by his success in reaching the numbers that are approved/decided by Ajit Jain and Warren Buffett.

Tom Ryan's job is to make sure that the claim payments from these books of business fit Berkshire Hathaway's cash flow so that Berkshire Hathaway will realize their profit targets over the period of time they have planned that the loan (finite insurance policy) is to be paid.  To make the claim payments fit the cash flow targets given to him by Ajit Jain, Tom Ryan manipulates the numbers and payments, breaches settlement agreements, delays and fails to make claims and services related payments without justification.

Cavell America aka Cavell USA

Pam Hoelsken, COO of Cavell America assists Tom Ryan. Pam Hoelsken is also the Treasurer of Seaton, Stonewall, and Transport. Seaton and Stonewall are owned by Dukes Place Holdings, Transport is owned by Randall & Quilter Investment Holdings. All three companies are managed by Insurance and Run-off Company Randall & Quilter Investment Holdings PLC (aka R&Q). Cavell is owned by Randall & Quilter Investment Holdings Limited. Ms. Hoelsken assists Tom Ryan in manipulating the numbers and directly oversees the preparation of the GAAP and Statutory financial reports.  These financial reports do not accurately capture the assets and liabilities of the companies.

All of the preceding is accomplished through a "collaboration agreement" whereby Cavell has ceded control of all claims operations for these companies to Berkshire Hathaway (Seaton, Stonewall, Transport). Under the collaboration agreement Berkshire Hathaway pays for all operational costs and staff (work assigned, performance review, raises, terminations, and promotions are all done by Tom Ryan), although the staff are advised they are Cavell employees. The agreement specifies people by name and salary to be used by Berkshire Hathaway for Berkshire related work.  Mr. Ryan is actively involved in the daily operations and declares that Cavell is "his shop".

In reality, many if not all of the finite cap-cover insurance plans written by Berkshire Hathaway are loans, and Tom Ryan is instructed by Ajit Jain and Forrest Krutter as to how much he can pay and when.

In addition to Seaton, Stonewall, and Transport, Tom Ryan oversees and controls the following books of business at Cavell's office: One Beacon, Kemper aka American Motorists Insurance Company (AMICO), and some aspects of GEICO and Republic.

Whistleblower suggests to start with "The Third Amended Complaint" which specifically addresses some of Berkshire Hathaway and Cavell dealings – (Click on the following to read The "Third Amended Complaint" abbreviated here down to 21 pages to spare you reading time from the total 208 number of pages comprised in the whole document ... you can read just the sections "Facts Pertinent to the Liability of the Berkshire Hathaway Companies" (paragraphs 93-107) and 4th – 8th Causes of Action (paragraphs 125-143) which details some of the alleged fraudulent activities involved.

Amongst many others, in this case Cavell (Ken Randall America Inc.) and 3 Berkshire Hathaway companies are named as defendants. The three Berkshire Hathaway companies named are: National Fire and Marine Insurance Company, National Indemnity Company (NICO) and National Indemnity Company of Mid-America. For more on Cavell, click Cavell America aka Cavell USA .

Final Note from Whistleblower:

(As at May 2005 Cont'd) Berkshire Hathaway and Cavell have been aggressively closing open claim files for the Seaton and Stonewall books of business in order to release their reserves into surplus. Many of these claims have continued to receive notices from the insured/reinsured, but the claim handlers have been instructed to keep these files closed and not act on the notices. 

This, along with their other claim handling and reserving practices, has resulted in an artificial increase in the surplus, and Cavell is currently seeking approval from the Rhode Island Department of Insurance for additional dividends to the shareholders.

Using finite reinsurance policies and unwarranted dividends Berkshire Hathaway and Cavell are effectively stripping these companies of as much of their assets as possible before entering a solvent scheme of arrangement and walking away from their remaining liabilities. 

At a recent reinsurance conference a representative from the Rhode Island Department of Insurance remarked that three companies were redomesticating to RI and that one of them was going to enter a solvent scheme very soon - Cavell recently redomesticated Seaton, Stonewall, and Transport to RI.

A final point of interest is that Cavell is owned by Randall & Quilter Investment Holdings Limited, the proposed purchaser in the ACE Brandywine sale, another deal that is under intense scrutiny. On the sale of ACE Brandywine Company to Randall and Quilter Investment Holdings Ltd. Cavell America is part of the R&Q empire, and we are very concerned about the sale for the following reasons:

R&Q are heavily involved in the use/abuse of Finite Reinsurance - all the US insurance companies owned or managed by R&Q entities (Seaton Insurance Company, Stonewall Insurance Company, and Transport Insurance Company) have cap covers purchased from Berkshire Hathaway. 

Also, R&Q entities, through a collaboration agreement with Berkshire Hathaway, are involved in the day-to-day management of other companies with Berkshire Hathaway cap covers, including One Beacon and Kemper aka American Motorists Insurance Company (AMICO).

R&Q do not have the financial resources to support the ACE run-off, and are primarily interested in stripping everything they can out of the company before they let it tank.  This is evidenced by their past actions; they have redomesticated Seaton, Stonewall, and Transport to Rhode Island so that they can take advantage of the state’s Solvent Schemes of Liquidation to walk away from their responsibilities. With the sale of ACE Brandywine it is expected that the claimants and policyholders will yet again lose out.

R&Q have also improperly stated reserves in order to get approval for dividends from these companies - the RI Supervisor of Insurance is currently investigating the reserving practices of Seaton and Stonewall in relation to recent dividend payments.  R&Q entities are also defendants in several lawsuits alleging business practices intended to defraud policyholders.

Randall & Quilter, Cavell , Ken Randall America Inc., Etal entities are also defendants in several other related lawsuits alleging unlawful and fraudulent business and bad faith insurance practices intended to defraud policyholders, one of the more notable of which is (not coincidentally): SANTAFE BRAUN, INC., f/k/a C. F. BRAUN & CO. VERSUS INSURANCE COMPANY OF NORTH AMERICA, Etal (Case Number CG-04-428686, Superior Court of the State of California, City and County of San Francisco).

In summary, the finite insurance plans written by Berkshire Hathaway are in reality loans, and Mr. Ryan is instructed by Mr. Jain and Mr. Krutter as to how much he can pay and when. He has stated that his bonus and raises are determined by his success in reaching the numbers that are approved/decided by Mr. Jain and Mr. Buffet. Some other cases that have been adversely affected by Berkshire Hathaway's practices that may be of interest are ... (to be continued by FBIC). The alleged cases and related information provided to FBIC are just 'the tip of the iceberg’ of extensive frauds and unlawful wrongdoings perpetrated by or on behalf of Berkshire Hathaway Corporation reinsurance operations, insurance companies and others working in collaboration.