Business
How a Businessman Fleeing Fraud Charges Built a Life Offshore
Around midday on Feb. 2, a large wave began its slow rumble toward the Aisland 1, an 800-ton deck barge floating in the waters between Dubai and Iran. On board the vessel were its residents of more than a year: a 58-year-old Italian businessman named Samuele Landi, three sailors, a cook and five cats.
Landi — the ship’s captain — was a gifted computer programmer who in a previous life had been the chief executive of Eutelia, a telecommunications company. He fancied himself an Italian Steve Jobs, though John McAfee, the cybersecurity entrepreneur turned tax fugitive, might have been a more fitting comparison. An avid skydiver and motorcycle racer, Landi liked to live on the edge: of the world, of the law and of life itself. He had made a career of exotic offshore financial schemes; now, adrift, he had become one with them.
“I will die at sea for sure,” he told Oswald Horowitz, a filmmaker who had visited him the previous December. “I’m not going back.”
The barge was Landi’s biggest adventure yet. A rusting rectangular hulk with the footprint of a large commercial aircraft, the Aisland had a deck fitted with six blue shipping containers bolted in place. These were the living quarters, equipped with solar-powered air-conditioners and a desalination system. The barge was otherwise littered with equipment: ropes, crates, fans, tanks of oil and water, a freezer containing pounds of red meat, and a sack of reinforced concrete mix for repairs. A Liberian flag flapped in the breeze.
The story of how Landi ended up living on a leaky barge some 30 miles off the shore of Dubai is a tale of self-preservation. For over a decade, Landi had been a man on the lam. He wasn’t a violent criminal; nor was he a particularly wanted individual, in the grand scheme of things. But since Eutelia was declared bankrupt in 2010 and some of its executives, including Landi, were very publicly tried and convicted of bankruptcy fraud, Landi has been a fugitive from Italian justice — and on land, his options had all but run out.
What distinguished Landi from a run-of-the-mill fraudster, though, was the outlandishness of his maneuvers, which exploited every loophole the globe had to offer. Landi was a libertarian who sought freedom from meddling governments and their cumbersome regulations, but in a select few nations, he found willing accomplices. Landi hid money in Switzerland, skated around extradition treaties while living comfortably in Dubai, registered companies in bespoke tax-free zones, procured diplomatic credentials from Liberia, dabbled in crypto and, finally, took to the sea, where there was no one to tell him what to do.
Landi was able to pull this off thanks to his knowledge of the offshore world, and his story makes him a perfect guide to this vast archipelago of third spaces. It also “embodies all the ways laws can be evaded through these jurisdictions, whether it’s tax laws, extradition laws, regulatory laws or taking advantage of regulatory quirks,” said Vanessa Ogle, a Yale professor working on a book about the history of the offshore world. “Once you develop a mind for it, a whole range of opportunities arises.”
While he lived on the barge, Landi was dreaming up an ambitious plan to establish a floating, modular and completely sovereign city-state in international waters near the nation of Mauritius. This much-discussed concept is known as “seasteading” — like homesteading, just wetter — and its adherents are a mix of survivalists, libertarians and wannabe pirates.
Landi’s barge was a heap, but he was able to keep it afloat in the relatively calm waters of the Persian Gulf by pumping out water and having his crew patch holes when it sprang a leak.
On that day in February, though, their repairs did not hold, and the offshore existence that Landi had built for himself was suddenly imperiled: not by the laws of nations, for once, but by the laws of nature.
Tax Shelters and a Timely Escape
As far as anyone can prove, Samuele Landi lived as a law-abiding private citizen in Arezzo, Italy, until his 30s, when he started working in the telecommunications industry. Landi’s first company, Plug It International, bought easy-to-remember phone numbers from the Italian government, then leased them out at a premium to dial-in fortune tellers, astrologers, weather reports and, of course, phone sex operators. Plug It was fined for misleading consumers about its fees.
In 2003, Plug It merged with another company to become Eutelia, a phone and internet provider. Eutelia was largely a family affair — there were Landis serving as managers and executives, Landis controlling shares and Landis expanding the business abroad. Samuele Landi, who served as Eutelia’s chief executive alongside two of his brothers, led the company as its shares began trading on the Milan Stock Exchange in 2004.
In 2006, the Italian financial police began auditing Eutelia’s books for possible fraud. The authorities discovered plenty — tens of millions of euros were improperly accounted for — and, in the process, found themselves immersed in the ways of the offshore financial world.
Starting as early as 2002, according to sentencing documents from Arezzo’s criminal court, Samuele Landi and five of his relatives had used a series of falsified or inaccurate invoices to siphon money from the business and into tax shelters around the world: a shell company on the Polynesian island of Niue; a UBS account in Monaco; a Romanian L.L.C. in Bucharest fully owned by a Swiss firm. The corporate vehicles they used had few or no employees, produced no tangible work and, according to prosecutors, existed primarily for the purpose of draining Eutelia’s coffers.
Circuitous international grifts aren’t uncommon — consider the revelations in the Panama Papers, the Paradise Papers and other data leaks that detailed how wealthy companies and individuals hide money through complex offshore entities. But Eutelia was a middling business in an ordinary Tuscan town, not a high-flying family office or a lawyered-up conglomerate with branches around the world.
Samuele Landi contested Eutelia’s insolvency. He was also antagonizing employees. In November 2009, while investigations into Eutelia were underway, employees of a Eutelia division that had been spun off occupied their offices in Rome. They camped out in their cubicles for two weeks, complaining that they hadn’t been paid in months. The workers blamed Landi — who was still in charge — for their troubles, and an image of Landi posing, pirate-style, with a cartoon-villain expression and a cutlass between his teeth became a symbol for Eutelia’s misdeeds.
Landi hit back in a manner more befitting a mob boss than a telecom executive. With 15 private guards by his side, he marched into the offices at 5 a.m. one November day, aiming to disrupt the sit-in. Wielding crowbars, the men dragged the workers out of the offices and into the lobby. A television reporter covering the occupation then called the police, who took Landi and his men away.
By the time Eutelia’s court date came around, Landi had high-tailed it for Dubai. At the time, the city-state levied no taxes on foreign citizens, had no extradition agreement with Italy and was developing a reputation as a place where criminals — and their money — could find safe haven.
These accommodations allowed Landi to establish himself quietly in the United Arab Emirates, and to move his wife and their children there.
In the city full of expatriates, Landi blended in. Professionally, he picked up where he had left off. In 2010, he registered Kryptotel, an encrypted mobile-phone software company, in Internet City, one of Dubai’s many free economic zones — gated enclaves where foreign companies enjoy special perks.
At Kryptotel, Landi hired Italians — among them, an old skydiving pal, according to LinkedIn. Commenting on a Facebook thread about his exploits, Landi wrote that he had sought out clients who could pay him in cryptocurrencies and would convert the digital currencies into dollars or dirhams when he needed cash.
Landi clearly had access to funds, though how much of the Eutelia loot ended up in his pockets and for how long was not clear. In the sentencing document, Italian prosecutors noted that Landi previously had access to accounts at the Banca della Svizzera Italiana in Lugano and Julius Baer, a Swiss private bank that reached a half-billion-dollar settlement in 2016 with the United States for helping rich Americans avoid tax. Additionally, Landi had power of attorney over a bank vault and other accounts.
Whatever his net worth, it was enough for a $10,000-a-month villa, a driver and car, private school for his children and trips abroad for his family.
From his villa in Dubai’s Palm Jumeirah, an archipelago of man-made islands, Landi followed the news as lawsuits against him, his family members and other Eutelia executives made their way through the Italian courts. In 2015, Arezzo’s criminal court sentenced Landi’s uncle, cousin and brother to between two and four and a half years in prison for fraudulent bankruptcy and misappropriation of funds. Their appeals failed, and the uncle died in 2016. Two other brothers took plea bargains. The surviving Landis served their time mostly under house arrest because they had no prior convictions, according to a prosecutor.
Samuele Landi’s exit, which made headlines back home, had caused tension within the family, said Paolo Casalini, a friend of Landi’s and a former editor of a local news site, Informarezzo.com, which Landi bought and took over in July 2022. “His brothers didn’t even talk to him anymore,” said Casalini, who was in regular touch with Landi over the years.
(Landi’s wife and sons did not respond to requests for comment; neither did the family members named in the lawsuits. His eldest daughter sent a brief statement saying her father was “a really kind person.”)
Samuele Landi was sentenced to a total of 14 years in prison in absentia for his role in Eutelia’s insolvency, but in Dubai, he was untouchable. There were hometown rumors that he had been arrested in 2017, but Casalini said Landi shrugged them off by sending a photo of himself on the beach, reading the newspaper: “Landi felt safe in Dubai,” Casalini said.
I asked if Landi seemed to miss Arezzo.
“He would say no,” Casalini said. “He said, ‘I’d only come back here for my mother.’”
The Perks of Diplomatic Immunity
On March 22, 2022, Liberia’s president, George Weah, landed in Dubai for a diplomatic visit. At the terminal, a delegation of Liberian officials was there to greet him. Standing a good half-foot taller than his peers was a man with a shiny, white, bald head: Samuele Landi.
Landi was there in his capacity as Liberia’s honorary consul general to Dubai. He had found yet another loophole. This appointment by Liberia — a country he was never a resident of and to which he had no connection by blood or marriage — had effectively granted him immunity from prosecution in Dubai by making him a diplomatic envoy.
He had made his first inroads in Liberia during his Eutelia days, when the firm bought a 60 percent stake worth $21 million in a Monrovia company called Netcom Liberia. For an offshore man of mystery and ill repute, a diplomatic post is a protective cloak that brings with it varying degrees of immunity, not to mention an alternative passport to travel and transact with; a new identity untethered from the past; and a noble (honorable, even) foil.
In the offshore world, this is a “time-honored strategy” going back to the 1920s, Vanessa Ogle, the historian, said. “Honorary consuls can move assets across borders,” she said. “They can have cars with diplomatic plates, the immunity and privilege of not being searched and a diplomatic pouch” to conceal documents. In 2022, the International Consortium of Investigative Journalists found 500 current and former honorary consuls had been accused of crimes or embroiled in controversy.
Many honorary consul gigs are just for show. Not Landi’s. According to three people who spent time with Landi in Dubai, he threw himself into the job, soliciting funds from wealthy Arab donors to build a hospital near Monrovia and hosting a Liberian Independence Day party at his home. He even used his consular powers to help repatriate over dozens of Liberian domestic workers who had been trafficked into Oman. (Alieu Massaquoi, Liberia’s ambassador to the United Arab Emirates, said in a WhatsApp message that he had not met Landi in person and that his office had no record of him. Massaquoi was appointed to his post in 2023, after Landi had moved offshore.)
Landi also used his time in Dubai to consult for a start-up run by an Emirati sheikh. The company, Blue Carbon, made plans to buy up large areas of Liberian forest to offset carbon emissions.
In May 2022, after a Liberian businessman in the United States was apprehended with a fake diplomatic credential, Liberia declared it would recall all of its diplomatic passports. That summer, the Emirates extradited an Italian drug trafficker and mobster who had been living in Dubai for years.
At this point, Landi mapped out his next move: one that took him offshore not just in a metaphorical sense, but in a physical one, too.
The Final Frontier
Landi surprised almost everybody when he moved onto the Aisland 1 on Dec. 22, 2022, with a stray cat and four kittens he had found in a box. His colleagues and friends knew nothing of his plans.
“He wanted to keep his barge a surprise,” said Casalini, who learned of Landi’s move after he posted about it online. “I’m a calm person, but my response was, ‘Are you mad?’”
It was a reasonable question. Landi had begun cryptically speaking, in interviews, about wanting to “escape the Matrix” — a metaphor from the 1999 movie for letting go of constructed social norms and false beliefs.
“He believed we live in a world where we are always being surveilled and manipulated — by 5G, by the Covid vaccines,” said Clément Bonnerot, a journalist with Le Monde who had interviewed Landi while he was at sea. “He identified as a hunted, persecuted man, for whom the most important thing was to be free.”
In December 2023, he told Tony Olsen, a libertarian podcaster: “If you are libertarian like we are, you want your freedom. And your freedom is finished when the freedom of others starts. This is the key point.”
Landi was adept at living at sea. He grew vegetables and made plans to bring aboard chickens and cattle. He wrote a blog, extolling the barge’s lack of mosquitoes and the stunning sunsets and posted lighthearted articles about his adventures. (These have all since been taken down.) He relied on his crew, on semiregular deliveries of food and supplies from Dubai and on his Starlink satellite connection, which allowed him to keep Kryptotel, his cellphone company, in business.
Still, Landi had no illusions about the longevity of his setup. “For the moment,” he told Olsen, the podcaster, from one of his blue containers, Dubai “is tolerating us, but we cannot stay.”
The used barge, which he said he had bought for $200,000, was falling apart, too, to the point that Landi and his men had to teach themselves aquatic welding. “From inside, there are certain dangers because you are exposed to gas,” he told Olsen. “But if you weld from outside, it’s more difficult because you’re in a scuba diving suit fighting the current and waves.”
On land, in the world of nation-states, Landi had reached the end of the line. And that little voice that had led him far from home, under fictitious flags, to inhabit man-made isles and extraterritorial havens, was now telling him to construct a nation of his own.
He would buy a new barge, twice as large, that he would anchor in the Saya de Malha Bank, midway between Seychelles and Mauritius. He would invite friends, family and like-minded libertarians to join him.
Landi even had an architect draw up plans. “On the top deck, he needed a spot where a Gatling gun was going to be mounted,” said Peter de Vries, a designer. “That’s one of these guns that fires 1,000 rounds a minute — very heavy-duty stuff,” he continued. “I actually got the specs for the gun.”
I asked de Vries: Was Landi scared of pirates, the state, his personal enemies?
“Probably all of the above,” de Vries replied. “The world.”
Nevertheless, Landi seemed as cheerful as ever. In footage that Oswald Horowitz, the filmmaker, took late in late 2023, Landi cuts the figure of a self-actualized man. His skin is not so much sunburned as glowing, his laugh is mirthful, and his demeanor determined and a little droll, as though he saw the humor in his predicament.
His endeavor might sound like lunacy to most people — a country, on a barge, in international waters, with guns? — but for a veteran of offshore affairs like Landi, it adhered to a certain logic.
The universe in which Landi had sought shelter is not so exceptional, after all. In fact, it is all around us, hiding in plain sight. We might buy a bottle of Scotch in a duty-free shop, or vacation on a cruise ship with Panama’s or Liberia’s lightly regulated flag of convenience. We might gamble in a casino or admire a da Vinci that has spent decades in an extraterritorial warehouse. Our clothes, our electronics, the computers we use for our desk jobs are likely to have been manufactured in special economic zones by global companies that behave more or less like Samuele Landi: hopping from jurisdiction to jurisdiction in order to make money and shield themselves as best they can from fiscal, regulatory, legal or environmental responsibilities.
Landi turned this ethos into a lifestyle. On the run, he made a life in the spaces above, beneath and between nations
Landi sent his last message to Horowitz on New Year’s Eve. It read: “Move or die.”
A month later, Landi’s barge was around 30 miles from the Dubai coast when the rogue wave hit, breaching the hull and apparently breaking the barge in two. Two members of Landi’s crew survived by clinging onto pieces of wood until a passing vessel rescued them the next day. Landi and the two remaining seafarers were not so lucky.
According to Italian news reports, Landi put out a call for help, but it didn’t come in time.
His body was found several days later, when it washed up on the beach about 40 miles up the coastline from Dubai. A relative flew out to identify the body.
In the seasteading community, Landi is remembered as a heroic figure. “Samuele Landi was the first seasteader to live in international waters for more than a year,” Joe Quirk, the president of the Seasteading Institute, a California nonprofit, wrote in an email. But the organization declined to endorse or recommend his exploits. “Barges,” Quirk wrote, “are not safe.”
Back in Arezzo, not everyone is convinced that Samuele Landi is deceased; rumors swirl about the lack of DNA evidence, and even the city’s mayor can’t quite believe that Arezzo’s most notorious exile is gone.
This was a man who found his way around everything: rules, taxes, borders, the law. Surely, Samuele Landi would resurface.
Sabika Shah Povia contributed reporting.
Business
See Where Flights Have Been Canceled as Government Shutdown Drags On
Circles are sized by the number of canceled flights. Lines are the routes of flights that were canceled.
Flight cancellations on Friday
Hundreds of flights across the United States were canceled starting on Friday, with deeper cuts looming in the coming days.
Federal Aviation Administration and Transportation Department officials have said the traffic reduction is necessary to ease pressure on air traffic controllers, some of whom have been calling in sick and working second jobs because they have not been paid during the longest government shutdown in U.S. history.
The officials identified 40 airports where flights should be cut in phases, with the goal of reducing activity by 10 percent by the end of next week.
The disruptions have rippled to other airports but, at least so far, they have appeared to be relatively limited. Airlines focused the first wave of cancellations on shorter, regional flights, and major airports were working largely as normal on Friday. But widespread concern that the situation could worsen brought home the effects of the government shutdown to many more Americans.
The reduction in traffic comes weeks before the busy holiday travel season begins in the United States. The airports that have already been affected range from large hubs to smaller destinations. They are in blue states and red states, spread across the country.
Here is a look at how cuts at affected airports compare to cancellations at those hubs this time last year:
Washington Reagan
17.4%
151 of 869 flights
0.2%
Louisville
8%
12 of 150 0.1%
Cincinnati 7.2%
18 of 250
0.2%
Houston Hobby
6%
20 of 336
0.4% Indianapolis
5.7%
17 of 297
0.2%
Oakland
5.4%
11 of 203
0.4%
Boston
4.8%
46 of 960 0.1%
Newark 4.5%
42 of 940
0.4%
New York JFK
4.5%
41 of 913
0% New York LaGuardia
4.5%
47 of 1,045
0.1%
Minneapolis/St. Paul
4.5%
35 of 784
0.1%
Detroit
4.3%
35 of 806 0.1%
Philadelphia 4.3%
30 of 701
0.1%
San Francisco
4.3%
41 of 960
1.2% Atlanta
4.2%
84 of 1,979
0.1%
Los Angeles
3.9%
50 of 1,274
0.3%
Denver
3.6%
67 of 1,866 1.4%
Ontario 3.6%
6 of 168
0.7%
Phoenix
3.6%
44 of 1,206
0.3% Chicago O’Hare
3.5%
82 of 2,313
0.3%
San Diego
3.5%
22 of 627
0.4%
Dallas-Fort Worth
3.4%
62 of 1,810 1.7%
Tampa 3.4%
17 of 493
0.2%
Baltimore-Washington
3.2%
18 of 562
0.2% Washington Dulles
3.2%
20 of 619
0.2%
Salt Lake City
3.2%
21 of 650
0.2%
Charlotte
3.1%
41 of 1,327 0.1%
George Bush Houston 3.1%
35 of 1,112
0.2%
Memphis
3.1%
5 of 160
0.2% Fort Lauderdale
2.8%
16 of 564
0.1%
Dallas Love Field
2.7%
11 of 402
0.9%
Orlando
2.7%
27 of 1,001 0.2%
Miami 2.7%
23 of 839
0.1%
Honolulu
2.5%
10 of 400
0.3% Las Vegas Reid
2.5%
29 of 1,138
0.3%
Chicago Midway
2.5%
10 of 405
0.3%
Portland (Ore.)
2.3%
10 of 438 0.5%
Seattle-Tacoma 2.3%
24 of 1,033
0.5%
Anchorage
1%
2 of 201
1.3% Teterboro
0%
0 of 8
No data
Share of scheduled flights that were canceled on Friday and throughout Nov. 2024
Business
Harvested lungs. Factory parts. How flight cutbacks could slow delivery of vital goods to LAX and other airports
A lung just harvested for an organ transplant. A part critically needed to restart an assembly line. The hottest toy for Christmas.
Those are among the kinds of goods shipped by the country’s complex air cargo system that could be significantly delayed following the Federal Aviation Administration’s decision to reduce flight capacity at 40 major airports, including LAX, according to logistic experts.
The 10% reduction in flight capacity announced Thursday that included Los Angeles International Airport and other hubs because of air traffic controller shortages stemming from the government shutdown already resulted in more than 3,500 flights delays on U.S. soil and more 950 cancellations by Friday afternoon, according to FlightAware.com.
Secretary of Transportation Sean Duffy warned Friday that 20% flight cuts could be in order if the shutdown continues.
“We are at a pivot point where certain things will be delayed and certain things will not,” said Vincent Iacopella, an executive at Alba Wheels Up, a logistics company that services LAX. “A higher percentage would be detrimental, but it’s also a matter of the length of the disruption.”
The air cargo system generally carries time-sensitive and high-value cargo such as pharmaceuticals, medical devices and tech components whose speed of delivery takes precedence over cost.
It’s also peak season for retailers trying to get their hands on holiday goods that are fast moving or weren’t ready for ocean freight months ago.
“Getting that item to market that influencers have suddenly determined is this year’s must-have Christmas gift will be more challenging now,” trade economist Jock O’Connell said.
The system includes not only major carriers such UPS, DHL and FedEx but also smaller competitors and dedicated freighters operated by commercial airlines. Also playing a key role in same-day delivery is the cargo hold of passenger flights operated by commercial airlines.
“Shippers are using airlines, because airlines have flights in the air all day long. It’s treated as baggage,” said Brandon Fried, executive director of the Airforwarders Assn. “That’s the highest priority.”
Among the goods that Fried said are shipped in cargo holds are harvested lungs that need to be delivered to an operating table, temperature-sensitive and radiological pharmaceuticals and parts needed for assembly lines. Any cancellation or flight delay immediately would impact such deliveries.
“It’s just at the beginning. If this lasts for a few days, you’re going to see significant impact throughout the air cargo supply chain,” he said.
Less affected, he said, would be air cargo companies such as UPS that have their own fleet of planes and can fly at night outside the FAA flight restrictions that run from 6 a.m. to 10 p.m.
In a statement, Fed Ex said it had contingency plans in place to move “time-sensitive” and “critical shipments” such as lifesaving pharmaceuticals and medical devices.
LAX is one of the five largest cargo airports in the country and a major destination for cargo arriving from China, Taiwan and other Pacific Rim countries.
David Gibson, president of the Los Angeles Air Cargo Assn., said so far the FAA order has not disrupted international flights arriving in the U.S. as airlines adjust their operations domestically.
Many flight cancellations could be handled by long haul trucks, he said, but that could change if the FAA further restricts flights, he said.
“If it goes beyond this, then it can get really ugly, but I don’t think it will,” he said. “Maybe I’m just being hopeful.”
Business
L.A.-area fire victims demand resignation of state’s top insurance regulator
Victims of the January wildfires in Los Angeles County urged Gov. Gavin Newsom on Thursday to call for the resignation of California Insurance Commissioner Ricardo Lara, saying the regulator has allowed insurers to run roughshod over them.
Lara, an independently elected state official, was accused at an Altadena news conference of being too closely aligned with the interests of insurers who homeowners say have delayed, denied and lowballed claims, forcing victims to tap retirement accounts and max out credit cards as they fight for their benefits.
“Gov. Newsom, we need your help. Your Palisades constituents have your back. Now is the time for you to have ours,” said Jill Spivack, 59, a Pacific Palisades resident whose home of 25 years burned down but who has yet to start rebuilding.
“You made promises when the cameras were rolling,” Spivack added. “Now we need to see your actions behind those words. Commissioner Lara has proven he won’t protect consumers. Please replace him with someone who will.”
The event, attended by several dozen Altadena and Pacific Palisades fire victims, was held by the Eaton Fire Survivors Network and attended by other groups, including the Los Angeles insurance advocacy group Consumer Watchdog, which called on Lara to resign last year.
Joy Chen, executive director of the network, cited recent surveys that found 70% of insured survivors have encountered delays and denials, while 8 in 10 Eaton and Palisades fire survivors are still displaced. The fires damaged or destroyed nearly 13,000 homes.
“We have an unprecedented housing crisis on our hands, which grew out of the insurance crisis on our hands,” Chen said. “That is why it is so urgent that Gov. Newsom act now.”
Newsom’s press office did not immediately respond to a request for comment. A spokesperson for Lara —whose term expires in 2026 — rejected any suggestion he would resign.
“The facts are Commissioner Lara has moved quickly and decisively to respond to the fires, including using every tool available to ensure wildfire survivors receive all the benefits they are entitled to under current law,” said Michael Soller, the department’s deputy commissioner of communications.
On Saturday, Lara had posted on X, “I’m here to finish the job — and leave the next Commissioner in a stronger position than I inherited.”
To advance its goals, the Eaton network established a website — lararesign.org — where fire victims and others can send emails to the governor and Lara asking for the commissioner’s resignation and leaving comments.
Much of the anger from fire victims has been directed at State Farm General, California’s largest home insurer, which dropped tens of thousands of policyholders in recent years and has been the target of complaints about its claims handling.
Spivack, who said her home on Aderno Way has been insured by State Farm for decades, said that it has been a full-time job getting her personal property claims paid amid changing adjusters and other issues.
Meanwhile, she has been haggling with the insurer for months after getting an estimate of only $250 a square foot to rebuild her home, less than a third of the going rate.
“At first we thought, thank goodness we have insurance. We’ve been loyal State Farm customers for 25 years,” Spivack said. “We trusted their promise to help us rebuild like a good neighbor. But what we faced instead is confusion, lowball estimates and a delay at every turn.”
Altadena resident Branislav Kecman, 64, who lost his Crescent Drive home of 12 years in the fire, said he was dropped by State Farm in July 2024 and forced onto the FAIR Plan where his coverage dropped from $1.5 million to $1 million but got more expensive.
“We really feel betrayed by our system, especially our commissioner that’s supposed to fight for our interest instead of, so to speak, being in bed with the insurance companies,” he said.
Bob Devereux, a State Farm spokesperson, said the insurer has handled more than 13,500 claims and paid almost $5 billion to January wildfire victims, with nearly 200 claim adjusters still on the ground.
“State Farm is committed to paying customers what they’re owed. We’re here every step of the way and working with elected officials to build a more sustainable insurance market in California,” he said.
Chen and Carmen Balber, executive director of Consumer Watchdog, also accused Lara of exacerbating the state’s insurance crisis through loopholes in his Sustainable Insurance Strategy, which was backed by the governor.
The regulatory changes gave insurers concessions, including the right to charge homeowners for reinsurance, in exchange for a pledge to write more policies in fire-prone neighborhoods.
However, since the deal was announced in 2023 insurers have dropped hundreds of thousands of homeowners onto the FAIR Plan’s rolls, as The Times has reported.
Soller said the department is currently reviewing rate filings submitted by five insurers that will commit the companies “to stay and grow” in the state, and it expects more to enter the market.
Chen advocated for a new insurance commissioner to adopt a five-point plan developed by the Eaton group to improve the insurance market and oversight of insurers.
That plan includes finishing an investigation into State Farm’s claims practices started this year by the department within 60 days — and freezing any rate hikes for the insurer until the claims issues are resolved. (Lara’s stance has been that the two issues are legally separate matters.)
Other elements of the plan include ending denials by the FAIR Plan of smoke damage claims — another issue the department is investigating — and preventing “illegal cuts’’ in temporary housing benefits while survivors rebuild.
Soller said the department is already working on the various matters raised.
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