FEMA Allegedly Lied To Hurricane Sandy Victims To Avoid Big Pay Outs

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Steve Birr Vice Reporter
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Victims of Hurricane Sandy who are still recovering from the storm that ravished the northeast over three years ago will testify Thursday in Congress, along with whistle blowers who allege the Federal Emergency Management Agency (FEMA) purposefully modified insurance claims to avoid large payouts.

Whistle blower testimony obtained by the Daily Caller News Foundation alleges FEMA workers fraudulently modified paperwork so they would not have to pay out Hurricane Sandy claims after Congress appropriated funds to aid recovery. FEMA oversees the National Flood Insurance Program (NFIP), which homeowners in New Jersey and New York must be processed through for their insurance claims.

Former FEMA workers say they left the agency over the alleged fraud being perpetrated on Sandy victims. The whistle blowers claim the Hurricane Sandy Claims Review (SCR), run through FEMA, was set up to deliberately underpay homeowners.

The whistle blowers have decades of experience in property damage analysis. Three of them will reveal their identities in testimony Thursday.

“While reviewing claims for the SCR, I received instructions from my superiors at OST Inc. and from FEMA managers to exclude from the payment recommendations items that are covered under FEMA’s Standard Flood Insurance Policies (SFIP),” reads the prepared testimony of whistle blower number one.

“I also received instructions not to conduct a comprehensive evaluation of claims assigned to me in order to identify each item of property damage subject to insurance coverage, but rather was told to use software developed for the SCR by McKinsey & Company that produced a range of expected values for each claim based on the property’s square footage and approximate qualify of construction.”

The whistle blowers all claim their superiors at FEMA gave specific instructions to flout the responsibility of the agency and avoid comprehensive reviews. They also allege superiors told them to modify submitted reports if the pay out figure was too high.

“If I submitted a recommendation for payment on a claim that exceeded the range generated by the McKinsey threshold software, FEMA would not approve it and directed me to have the desk auditor revise the findings to fit within the threshold generated by the McKinsey software,” the testimony obtained by TheDCNF says. “Other reviewers received these same instructions, which reflected the SCR’s general operating procedure. The express purpose of these instructions was to limit the payments made on each claim that I reviewed.”

Stop FEMA Now, which is organizing the event, is busing in hundreds of homeowners from New Jersey and New York for the whistle blower testimony, who are still mired in the insurance claims process. The group claims the initial fraud perpetrated by FEMA affected roughly 140,000 people through the NFIP. Organizers and whistle blowers will call for investigations and the resignation of FEMA personnel, reports The Washington Free Beacon.

“I left the SCR because I believe that it was not reviewing claims in accordance with accepted industry procedures or the SFIPs’ requirements,” whistle blower one says in the testimony. “Rather, it was an elaborate process designed to justify minimal payments to policyholders irrespective of the actual merits of their claims.”

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