Photo Courtesy of the Attorney General’s Office
State Attorney General Eric Schneiderman
By Michael V. Cusenza
A former project manager for a Long Island-based engineering firm recently admitted to altering an engineering report prepared in connection with the assessment of structural damage of residential properties resulting from Superstorm Sandy, State Attorney General Eric Schneiderman announced.
Matthew Pappalardo, 39, pleaded guilty last week to unauthorized practice of engineering, a Class E felony. Pappalardo is expected to be sentenced on March 1 to three years’ probation and a $10,000 fine.
Pappalardo’s former employer, HiRise Engineering, P.C., also pleaded guilty to criminal solicitation in the fifth degree, a violation, agreed to be permanently banned from receiving contracts and providing services under the National Flood Insurance Program, and paid $225,000 in costs of prosecution.
According to statements made by prosecutors at arraignment on the August 2016 indictment, after Superstorm Sandy in October 2012, HiRise was contracted to perform structural engineering assessments for properties covered under the National Flood Insurance Program. HiRise, in turn, retained numerous licensed professional engineers to perform house inspections and prepare engineering reports.
According to Schneiderman’s Office, the original reports authored by the on-the-ground, subcontracted professional engineers were altered by employees of HiRise, under the direction of Pappalardo. Pappalardo and the other HiRise employees who made the alterations to the original reports did not personally inspect the damaged buildings and were not licensed to practice engineering in New York. The altered reports were then submitted by HiRise, and ultimately provided to the adjusting firms, without the consent or approval of the underlying professional engineers. Federal flood claim administrators and adjusting firms then relied on these reports as part of their evaluation of coverage under the NFIP, prosecutors noted.
“Fraudulently altering engineering reports undermines the integrity of the entire NFIP claims process, which homeowners and families rely upon in a time of crisis,” Schneiderman said. “My office is committed to protecting homeowners and ensuring that their insurance claims are handled accurately and fairly. Today’s conviction also re-emphasizes the need for FEMA to implement the reforms to the National Flood Insurance Program identified by my office, so that when the next major storm hits, families can be confident that their claims are being handled professionally and reliably.”
Those NFIP reforms are outlined in the AG’s report, “Murky Waters: Increasing Transparency and Accountability in the National Flood Insurance Program, Findings and Recommendations in the Wake of Superstorm Sandy,” and they include:
- Increase the transparency and clarify the scope of flood insurance coverage and any applicable exclusions, to provide consumers with a better understanding of what is and is not covered under their flood policy, through the creation of a plain language disclosure sheet;
- Provide policyholders with all documents created during the course of the flood claim administration process and ultimately relied upon in determining payment or denial of a flood claim, including all final adjuster and engineering reports, as a matter of course;
- Implement a national certification process for all engineers retained to provide structural damage assessments in the wake of a flood event; and
- Ensure the transparency of fees paid to engineering experts by implementing a standardized fee schedule for all engineering services.
