Judge: Sandy scam ‘ends now’

Says engineer changed report to avoid large insurance payout

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Attorney Denis Kelly’s office on Park Avenue, above the Long Beach Surf Shop, was bustling last Friday night, as Kelly fielded numerous calls from homeowners who are still fighting their insurance companies two years after Hurricane Sandy.

“They’re all saying, ‘The same thing happened to me,’” said Kelly, a former City Councilman who represents 240 clients who are suing their insurers, claiming that they were “significantly underpaid” for damages caused by the storm.

The calls came in the wake of a scathing ruling on Nov. 7, by U.S. Magistrate Judge Gary Brown, that an engineering company hired by the Wright National Flood Insurance Company, U.S. Forensic, “unjustly frustrated efforts” by two Long Beach homeowners who sought a damage claim after their home was destroyed. Brown concluded that an engineer’s report — which initially attributed the damage to the storm — was secretly altered in an attempt to prevent a larger payout to the homeowners. “Worse yet,” Brown wrote, “evidence suggests that these unprincipled practices may be widespread.”

“I definitely think it happened in other cases,” Kelly said. “We are in the process of going through our files to try and identify whether there are other issues such as this. It has really been very rough on my clients to think about the fact that they were perhaps intentionally and wrongly denied what they were entitled to and that that was the intent and purpose of those sent out to review their damage.”

Kelly and many others are calling Brown’s ruling the first significant legal decision in favor of Sandy victims.

“My clients knew soon after the storm that things weren’t right — that the insurance companies were not treating them fairly …,” Kelly said. “Now my clients finally have an authority who has looked at this and said, ‘You know what? This is not right.’”

Brown’s ruling prompted all four U.S. senators in New York and New Jersey to call on the Federal Emergency Management Agency — which administers the National Flood Insurance Program — to investigate potentially fraudulent activity involving Sandy insurance claims.

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