NJ Lawmakers Want Answers About Alleged Fraudulent Activity Post-Sandy

By Briana Vannozzi

They altered insurance reports and cheated Hurricane Sandy survivors out of money to fix badly damaged homes. Now New Jersey’s House representatives want federal hearings to get to the bottom of who knew what when.

“FEMA has just completely mishandled its primary obligation to help disaster victims and it’s been going on for two years now,” said Congressman Tom MacArthur.

“We feel very strongly that there needs to be congressional oversight,” said Congressman Frank Pallone.

Each of New Jersey’s 12 congressional members inked their names on the line.

In a letter to the House Oversight and Government Reform Committee, the delegates write that FEMA knew of fraudulent practices by engineering and service companies operating under the National Flood Insurance Program to Hurricane Sandy victims, yet failed to act.

“First issues started for me with recoupment where FEMA had made payments to people and then sent letters to 1,200 residents of eastern New Jersey demanding money back again or they would garnish wages and other things,” MacArthur said.

MacArthur prompted the letter. It cites a “60 Minutes” report that brought the allegations to light. And it says that a head FEMA administrator “informed the delegation that two engineering firms have ‘absolutely engaged in fraud’ related to the NFIP claims of Sandy survivors.”

“The National Flood Insurance Program’s financial condition was improved as a result of underpaying, that is a fact. I won’t speculate who did what and why, but that fact alone is reason to hold hearings,” MacArthur said.

In March, FEMA agreed to reopen more than 140,000 claims filed by homeowners who say their insurance companies low-balled or outright denied them on property damage assessments.

“FEMA has been asleep at the wheel. They knew about these problems since August of 2013 and here we are in April 2015 and OK I’m glad they’re reopening files but it doesn’t tell me where they’ve been for the last year and a half,” MacArthur said.

“There’s are still a lot of people who did not recover anything from their insurance, from their flood insurance and others who got a very reduced amount from what they thought they should have,” Pallone said.

Pallone says nearly 75,000 damage claims have been filed in New Jersey and more than a thousand victims have filed suit.

FEMA doesn’t review the appeals claims from homeowners. It’s outsourced to servicing companies hired by the insurance firms. Insiders say it leaves a lot of room for finger pointing.

“We need to know who at FEMA knew and why they didn’t act when it was blatant fraud,” MacArthur said.

MacArthur says he met with the chair of the national committee, but it will likely be another few months before hearings are considered.