Coney Island

House members demand Sandy insurance fraud probe

March 26, 2015 By Paula Katinas Brooklyn Daily Eagle
U.S. Rep. Yvette Clarke was among the Brooklyn politicians who signed a letter asking for an investigation into misused Sandy FEMA funds. Eagle photo by Rob Abruzzese
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Eight members of New York City’s congressional delegation, including three representing Brooklyn, have written a letter to Inspector General John Roth of the U.S. Department of Homeland Security demanding an investigation into alleged fraud in the insurance claims process perpetrated against Superstorm Sandy victims who filed claims through the Federal Emergency Management Agency (FEMA).

FEMA operates under the jurisdiction of the Dept. of Homeland Security.

U.S. Rep. Hakeem Jeffries (D-Brooklyn-Queens), one of the lawmakers signing the March 20 letter, represents the Eighth Congressional District, which includes Coney Island, Seagate, Brighton Beach and Manhattan Beach, four of the coastal communities decimated by Sandy in October of 2012.

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“SuperStorm Sandy devastated many communities throughout New York City. Homes were destroyed, businesses damaged and lives turned upside down. In the wake of this tragedy, FEMA failed to oversee a fair and expeditious processing of flood insurance claims. The public deserves to know what happened, why it happened and how we can prevent it from ever happening again,” Jeffries said in a statement.

The insurance claims process was tainted by allegedly doctored engineering reports in hundreds of cases to make it seem as if homeowners had not suffered significant damage from Sandy, a scam that resulted in victims either having their insurance claims denied or being vastly underpaid, the lawmakers said.

FEMA is in the process of settling approximately 1,200 civil lawsuits that are currently pending in the U.S. District Court for the Eastern District of New York that were filed by Sandy victims over the insurance claims process of the FEMA’s National Flood Insurance Program.

The Brooklyn members of the city’s congressional delegation signing the letter were Jeffries, U.S. Rep. Yvette Clarke (D-Central Brooklyn) and U.S. Rep. Carolyn Maloney (D-North Brooklyn-Manhattan). The letter was also signed by U.S. Reps. Charlie Rangel, Steve Israel, Gregory Meeks, Grace Meng and Jose Serrano.

The lawmakers expressed concern that a systemic fraud was perpetrated on a vulnerable group of victims in need of immediate financial relief in the wake of the hurricane.

Earlier this month, U.S. Senators Charles Schumer and Kirsten Gillibrand called on FEMA to ensure that all Sandy flood victims are included in the court settlement, regardless of whether the policyholder filed a lawsuit.

“The recent allegations of fraudulent engineering reports and other deceptive practices rampant throughout the FEMA-run National Flood Insurance Program makes your jaw drop. Evidence of engineering firms and insurance providers looking to undercut Sandy victims and underpay them for their Superstorm Sandy damage adds insult to injury, and is truly unacceptable,” Schumer said.

“It is reprehensible that FEMA officials were aware of fraud and apparently did nothing about. Instead, FEMA continued to fight victimized homeowners in court and denied them the insurance coverage they had paid for,” Gillibrand said. “But FEMA has a responsibility to make every homeowner who fell victim to this fraud whole whether they filed a lawsuit or not, and we intend to hold FEMA to that standard.”

The senators also said that flood insurance policyholders impacted by Sandy should be given access to all of the engineering and insurance documents that were used to assess the damage on their homes so that other possible cases of fraud could be rooted out.



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