Quackenbush came to Lloyd's defense in the Department of Corporations fraud case. Quackenbush wrote a brief favoring Lloyd's. It's rare to have two separate state agencies opposing each other. The Department of Corporations suit was thrown out on a technicality.
In the California Names fraud suit, Quackenbush penned a brief supporting Lloyd's. The California Names lost at the district court level. A 3-judge appellate panel then overturned the lower court's decision. Then an 11-judge appellate panel overruled the 3-judge panel, and Lloyd's was home free again.
Next, the Department of Insurance received $400,000 from Lloyd's and obfuscated the reason for the payment. The Los Angeles Times reported that the payment was covered up as "educational briefings." It was widely believed to be reimbursement for legal work done for Quackenbush's interventions. A federal grand jury in New York probing Lloyd's investigated that $400,000 payment. "The assistant U.S. attorney handed up an indictment proposal to the Department of Justice in Washington," says Peterson. But the document hit Washington right around the time of 9/11, while international factors were in the forefront; the case evanesced. When you fight Lloyd's, you fight the British government, notes Peterson.
But Quackenbush got some nifty trips abroad paid for by Lloyd's and insurance companies, according to the Times.
In 2002, federal and state probers dropped their investigation of Quackenbush. In the end, two people in the case, including one of his close aides, were convicted criminally and a third was hit with a misdemeanor.
In 2003, Quackenbush wistfully told the Insurance Journal that he had trusted that aide because of his record in Pete Wilson's administration.
In 2002 his wife, Chris, told the San Francisco Chronicle that her husband was the victim of a "witch-hunt." At the time, they were in Hawaii and he was not working. "It's very difficult for someone who has been at the top to take an ordinary job," she explained.