Sandy settlement disputes become fraud case

Bob Kaible, pictured in November in front of an empty lot at 24 Michigan St., where a rental property his wife and father-in-law owned once stood. On Nov. 7, a federal judge ruled that an executive at their insurance company secretly rewrote a report that originally concluded that damage to the home had been caused by Hurricane Sandy, in order to avoid a larger payout.

Kristie Arden/Herald

Four U.S. senators are calling for hearings in Washington, lawyers have descended on New York and a panel of federal judges is looking into allegations that insurance companies defrauded Hurricane Sandy victims out of insurance settlements.

Sens. Kirsten Gillibrand and Charles Schumer, of New York, and Robert Menendez and Cory Booker, of New Jersey, all Democrats, have sent a letter to the Senate Committee on Banking, Housing and Urban Affairs, requesting oversight hearings into what private insurance companies hired by the Federal Emergency Management Agency did with insurance claims after Sandy struck in 2012.

The probe began in 2013, when homeowners began questioning insurers’ damage reports on their houses. Deborah Ramey and her father, Larry Raisfeld, of Long Beach, had questions about the engineer’s report, prepared by U.S. Forensics, for their Sandy-damaged rental property. They asked their insurance company, Wright National Flood Insurance, for a re-inspection. George Hernemar, the same engineer who had done their initial report, was sent once again, and brought his copy of that first report. When Ramey compared the U.S. Forensics report with Hernemar’s copy, she discovered that changes had been made by U.S. Forensics to indicate that the damage had been caused by environmental factors not related to Sandy — which meant the repairs would not be covered.

After Ramey filed a lawsuit in U.S. District Court, Magistrate Judge Gary R. Brown determined in an eviden-tiary hearing that U.S. Forensics executive Michael Garove had altered key findings and conclusions in the report, even though he had never visited the site.

FEMA’s former chief counsel, Brad Keiserman, is now tasked with making changes to the National Flood Insurance Program, and trying to settle some 1,800 similar Sandy insurance fraud cases now before the courts. In an interview that aired on CBS’s “60 Minutes” last Sunday, Keiserman said, “I’m not going to sit here and conceal the fact that it happened. Because in the last three weeks, I’ve seen evidence of it.” He has apologized to Ramey.