MINEOLA, N.Y. _ A Uniondale engineering company and one of its former project managers are facing dozens of felony charges after what New York's attorney general on Monday called a scheme to cheat homeowners out of federal flood insurance money by altering engineering reports on damaged houses after Superstorm Sandy.
Authorities unsealed an indictment in Nassau County Court charging HiRise Engineering PC and company employee Matthew Pappalardo, 38, of Queens, with multiple counts of forgery after a probe after the devastating October 2012 storm.
The investigation began after allegations started surfacing in 2014 that companies had defrauded homeowners while processing claims for the National Flood Insurance Program, which is run by the Federal Emergency Management Agency.
Pappalardo also is charged with unlicensed practice of engineering, which also is a felony offense, authorities said.
Both he and the company put in not guilty pleas during a court arraignment in Mineola.
"We steadfastly maintain that there was never any intent to defraud any homeowner with respect to the preparation of these reports. We look forward to an opportunity to defend these allegations," Kenneth C. Murphy, HiRise's attorney, said after court.
Avi Moskowitz, Pappalardo's attorney, asked that his client be released on his own recognizance. But a judge but set bail at $20,000 and Pappalardo was released on $40,000 bond Monday afternoon.
Moskowitz said after court that his client "is completely innocent."
"He did not defraud anybody. And he looks forward to being vindicated in court."
Pappalardo didn't comment as he exited the courthouse after making bail.
Prosecutors accuse Pappalardo and employees under his direction of changing reports that professional engineers prepared after inspecting storm-damaged homes covered by FEMA's flood insurance program.
The company then submitted the falsified reports to adjusting firms _ without the approval of the original engineers _ before FEMA relied on the forged documents to calculate insurance payouts for homeowners, authorities have charged.
State Attorney General Eric T. Schneiderman said in a prepared statement Monday that the scheme undermined "the integrity of the entire claims process" and showed a "flagrant disregard for the well-being and safety of New Yorkers."
His office also released a report Monday calling for specific reforms to the insurance claims process to help protect homeowners against fraud in the future.
"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 said.
