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Senate Banking Committee to launch Sandy flood insurance probe

This corner lot on Michigan Street in Long

This corner lot on Michigan Street in Long Beach is among the properties affected by a federal judge's order to release flood insurance documents suspected of being falsified to deny superstorm Sandy claims. It was photographed on Nov. 13, 2014. Credit: Johnny Milano

The U.S. Senate Banking Committee has agreed to launch an inquiry into the government's delayed response to allegations that superstorm Sandy victims were defrauded of federal flood insurance settlements, according to a congressional staffer.

The probe comes at the request of senators from New York and New Jersey. It will be among the first tasks of the Banking Committee's recently established investigative team.

In March, Democratic Sens. Charles Schumer and Kirsten Gillibrand of New York and Robert Menendez and Cory Booker of New Jersey requested the investigation.

The move came after a top official at the National Flood Insurance Program acknowledged that the agency was warned in late 2013 that engineering firms may have forged property damage reports in an effort to deny claims.

Yet the Federal Emergency Management Agency, which runs the flood insurance program, didn't call for an investigation until November 2014.

The allegations of forgery have led to a criminal investigation by New York Attorney General Eric T. Schneiderman and have prompted FEMA to begin ongoing talks to settle roughly 2,000 lawsuits with homeowners over disputed flood claims.

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