NY Engineering Firm Charged With Ripping Off Hurricane Sandy Victims

It takes special kind of criminal to take advantage of another person’s tragedy for profit. According to New York Attorney General Eric Schneiderman, many of those criminals live right here in New York.

When Hurricane Sandy touched down on the eastern seaboard in late 2012, it wreaked havoc in 24 states and caused over $75 billion in property damage. For Long Island engineering firm GEB HiRise Engineering PC and its former executive Matthew Pappalardo, this disaster presented an opportunity to make money.

Both HiRise and Pappalardo have been indicted on 50 counts of felony fraud for forging damage reports to insurance companies that portrayed property damage caused by Sandy—such as buckled walls and cracked foundations—as the result of long-term deterioration unrelated to the hurricane.

In at least 25 different cases, Pappalardo directed his staff to change damage reports in order to yield a lower payout from the insurance company. Pappalardo’s employees who revised the reports were not licensed engineers, nor had they visited the homes in question. Pappalardo has also been charged with practicing engineering without a license.

For at least 25 New York homeowners recovering from a traumatic natural disaster, Pappalardo’s fraudulent revisions resulted in lower, or no insurance payouts for their damages.

Pappalardo was released on $20,000 bail earlier this month. According to his lawyer Avraham Moskowitz, Pappalardo “adamantly denies all of the charges against him,” and he looks forward to demonstrating his innocence in court.

Pappalardo and HiRise were not alone in falsifying property damage reports for insurance companies after Hurricane Sandy. Attorney General Schneiderman opened an investigation into the practice in 2014 after similar allegations arose from many other New York homeowners.

“Today’s charges reveal a flagrant disregard for the well-being and safety of New Yorkers and my office will not tolerate it,” said Schneiderman in a statement. “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.”

Lawsuits can be long and arduous, so it’s no wonder that many families that recently experienced a tragedy are reluctant to go to trial against their insurance company. Instead, they simply accept that payout they are given. That’s what Matthew Pappalardo and HiRise were counting on.

Sources: Associated Press, “Indictment: Engineering firm altered Sandy damage reports,” ABC News, 1 August 2016.

Denny, Andrew, “Engineering Firm Charged With Fraud Over Sandy Damage Reports,” New York Law Journal, 1 August 2016.

“New York AG Charges Engineering Firm with Doctoring Sandy Claims Reports,” Insurance Journal, 2 August 2016.