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Judge considers penalties for Katrina whistleblowers

BIRMINGHAM (AP) — A judge weighed possible contempt penalties Monday for two Mississippi sisters and a prominent lawyer over thousands of pages of State Farm Insurance Co. documents that were secretly copied as possible evidence in lawsuits stemming from homeowner claims after Hurricane Katrina.

U.S. District Judge William Acker considered whether to issue contempt citations against Cori and Kerri Rigsby of Ocean Springs, Miss., and attorney Richard Scruggs of Moss Point, Miss. After a daylong hearing, he ordered everyone back to court on Tuesday.

The sisters admitted copying thousands of pages of records to back up their claims that State Farm wrongly denied claims after Katrina. At the time they were working for Alabama-based E.A. Renfroe and Co. Inc., which was adjusting claims for State Farm in Mississippi.

The women delivered the papers to law enforcement agents and Scruggs, who signed them each to a $150,000-a-year consulting contract.

He is suing State Farm on behalf of hundreds of Mississippi residents and testified that some documents provided by the women already have been used in lawsuits he filed.

Renfroe and Co. asked Acker to hold the sisters and Scruggs in contempt for their alleged failure to return all the records, which include engineering reports, e-mails and other claims information.

The Rigsbys and Scruggs said they have returned all the records they had.

Acker said he would only consider civil penalties for now, but he held out the possibility of an inquiry into possible criminal contempt, which could include jail time.

Copyright 2005 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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