A Uniondale engineering firm and a former company project manager pleaded guilty Tuesday in what the state attorney general said was a scheme targeting homeowners trying to collect federal flood insurance money for superstorm Sandy damage.
Former HiRise Engineering PC employee Matthew Pappalardo, 39, of Whitestone, Queens, admitted in Nassau County Court to a felony count of unauthorized practice of engineering.
A HiRise attorney agreed the company would be permanently barred from business related to the National Flood Insurance Program and would pay a $225,000 fee under its separate plea.
In admitting his crime, Pappalardo told acting state Supreme Court Justice Jerald Carter he wasn’t licensed in New York as an engineer and caused changes to be made to an engineer’s 2013 report about structural damage at a residential property without that professional’s knowledge. The judge agreed to sentence Pappalardo in March to 3 years of probation and a $10,000 fine.
State Attorney General Eric T. Schneiderman’s office in August accused Pappalardo and employees under him of altering reports professional engineers did after inspecting storm-damaged Nassau homes, including in Long Beach and East Rockaway, covered by the government-run flood program.
The company then submitted the falsified reports to adjusting firms — without the approval of the original engineers — before the Federal Emergency Management Agency used the forged documents to calculate insurance payouts for homeowners, according to prosecutors.
Schneiderman released a statement Tuesday saying “fraudulently altering engineering reports undermines the integrity” of the flood insurance claims process, “which homeowners and families rely upon in a time of crisis.” He said the convictions also re-emphasize the need for reforms to the flood program his office previously identified for when the next major storm hits.
The felony indictment had charged Pappalardo and HiRise with 25 forgery counts and Pappalardo with 25 counts of unauthorized practice of engineering. By its plea, HiRise admitted to the violation of fifth-degree criminal solicitation, or to soliciting Pappalardo to engage in crime in regards to the same 2013 report he admitted was changed.
The judge said he would agree to sentence HiRise to an unconditional discharge to go along with its agreement not to do business with the flood program and the $225,000 payment.
The state attorney general’s investigation began after allegations started surfacing in 2014 that companies had cheated homeowners while processing claims for the flood insurance program after the 2012 storm. His office kicked off a probe after a tip from an attorney who represented owners of Sandy-damaged homes that engineering reports had been doctored.
Pappalardo ignored a request for comment as he left court Tuesday. His attorney, Avraham Moskowitz of Manhattan, called the original charges “overblown” and “political.”
“This was a technical violation of a law that does not even require criminal intent,” he added, saying Pappalardo admitted to unauthorized engineering report changes, but “not that the changes were inappropriate.”
HiRise’s lawyer, Kenneth C. Murphy of Manhattan, said the company’s noncriminal guilty plea was the result “of what started as 25 felonies” and “there was no intent to harm homeowners” by any HiRise employee.
“That was an unfortunate circumstance that occurred as a result of an incredibly overburdensome workload . . . thousands of reports over the course of a few months in the wake of superstorm Sandy,” he added.