Firm accused of scamming Sandy victims out of insurance money
A Uniondale engineering company and one of its former project managers are accused in a scheme to cheat Superstorm Sandy victims out of federal flood insurance money.
Prosecutors say Matthew Pappalardo was supposed to be helping Sandy victims get the federal insurance money to repair their homes. The state Attorney General's Office says the 38-year-old instead directed his employees at HiRise Engineering to alter field reports to say the buildings weren't that badly damaged in the storm.
The altering of reports meant homeowners had their claims denied by FEMA, or they were paid far less than they deserved.
Superstorm Sandy victim Michele Mittleman is an attorney who represented several people allegedly ripped off by Pappalardo and HiRise Engineering.
While the state Attorney General's Office won't say what Pappalardo's motive was, Mittleman says, "Clearly, they had an agreement with somebody, I think in FEMA, to underpay the claims. I think FEMA was $25 billion in the red going into Sandy, and the way they were going to downplay the amount, they had to pay."
The investigation into HiRise Engineering began in 2014 when homeowners began to come forward and complain that their Sandy insurance claims were denied because of the engineering reports.
The offices were raided in early 2015 as the Attorney General's Office continued its investigation into HiRise.
On Monday, an attorney for the firm and Pappalardo denied the charges
"Mr. Pappalardo is completely innocent, he did not defraud anybody," said attorney Avraham Moskowitz. "We are going on four years and people are still suffering because of the crimes committed."
The attorney general also issued a 30-page report identifying several "fundamental flaws" in the national flood insurance program, including poor administration and supervision of flood claims, and lack of training.
While FEMA could not comment on the specifics of the indictment, it did say that it will "continue to take any allegations of fraud very seriously and we will continue to provide any information about fraud or suspicious activity to the proper authorities."