The National Rifle Association (NRA) said on Friday it had filed for bankruptcy in a U.S. court as part of a larger restructuring plan to remove its New York footprint for Texas.
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The gun rights group said it would restructure itself as a Texas nonprofit out of what it called “a corrupt policy and regulatory environment in New York City.” where it is currently saved.
“The plan can be summed up very simply: we get out of New York and we follow the plans to join the NRA in Texas,” wrote Wayne LaPierre. “
Last November, the NRA agreed to cancel the insurance plan it offered in New York for five years, in addition to paying a fine of $ 2.5 million for the costs related to the company.
The New York City Department of Financial Services then announced a settlement with the NRA after state attorney general Letitia James sued the powerful group to disband it over corruption allegations.
This fine was imposed on the basis of the alleged insurance scheme that the NRA offered to its members when they did not have a license to do so. He also withheld information on how he maintained certain bonuses for his own benefit.
The settlement resolved costs associated with the NRA’s business relationship with insurance broker Lockton Cos, which has sold more than 28,000 policies guaranteed by the NRA. Among the plans offered is the “Carry Guard” program, which state officials say illegally provides coverage for criminal defense costs relating to the “intentional” use of firearms.
Thanks to the insurance offers, the NRA would have received more than $ 1.8 million in royalties and associated fees and would have maintained between 13.67% and 21.92% of the premiums paid.
“The NRA was operating as an unlicensed insurance producer and was violating New York insurance law by claiming insurance products and receiving compensation,” Financial Services Superintendent Linda Lacewell said.
“Worse yet, the NRA violated New York insurance law by demanding unsafe and ineligible insurance products, including those from its Carry Guard program that were intended to insure willful acts and criminal defense costs” , he added.
The civil lawsuit filed by James in August last year argued that the NRA had violated state law governing nonprofits. The lawyer noted that the group and its senior officials have embezzled millions of dollars from their charitable mission and endorsed “a culture of self-control, mismanagement and negligent supervision.”
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