Eric Schneiderman for Attorney General

Long Island contracting firm hit with major suit for allegedly doctoring reports on Hurricane Sandy damaged homes

August 2, 2016

As published in the NY Daily News on August, 1 2016.

A Long Island-based contracting firm and one of its employees were hit with a 50-count indictment Monday for doctoring engineering reports on homes damaged by Hurricane Sandy, according to state Attorney General Eric Schneiderman.

Matthew Pappalardo and HiRise Engineering were charged with 25 counts of forgery. The 38-year-old was also charged with 25 counts of unauthorized practice of engineering in Nassau County Supreme Court.

The firm was contracted by the National Flood Insurance Program after the 2012 storm to assess damage to structures it covered.

It hired licensed engineers to perform the inspections. Schneiderman said Pappalardo, the project manager, had HiRise employees alter those professional engineering reports even though they were not licensed engineers and had not performed the inspections.

Those reports were submitted to administrators evaluating flood claims.

“Fraudulently altering engineering reports undermines the integrity of the entire FEMA claims process, which homeowners and families rely upon in a time of crisis,” said Schneiderman, whose office launched a broader probe into the damage assessment process. “When the next major storm hits, it’s crucial that families know exactly what kind of damage is covered by insurance, and that their claims are being handled professionally and reliably.”

Schneiderman’s office was tipped off to the fraud in 2014 by lawyers of residential properties damaged during the storm.

He also released a report Monday from a larger investigation titled “Murky Waters: Increasing Transparency and Accountability in the National Flood Insurance Program.”

That study found systemic problems such as poor administration and supervision of flood claims as well as lack of training for engineers handling inspections.

Pappalardo was released on $40,000 bail.

“Mr. Pappalardo has entered a plea of not guilty and adamantly denies all of the charges against him,” said attorney Avraham Moskowitz. “He has done nothing wrong and looks forward to being vindicated at trial.”

A spokesperson for HiRise said the firm was “disappointed” Schneiderman’s office filed the charges.

“As we have from the beginning, we steadfastly maintain that there was never any intent by HiRise or its principals to defraud any homeowner with respect to the preparation of these reports and we look forward now to an opportunity to defend these allegations,” the company said in a statement.