Former director of Hi-Rise Engineering, Matthew Pappalardo was indicted on a 50-count indictment stemming from Hi-Rise’s role in altering their engineering reports to defraud policyholders from monies owed due to Superstorm Sandy damage. Contained within the indictment were 25 counts of Forgery in the second degree, in violation of Penal Law Sect. 170.10(1) and 25 counts of the Unauthorized Practice of a Profession in violation of Education Law Sect. 6512(1).
A person is guilty of forgery in the second degree when, with intent to defraud, deceive or injury another, he falsely makes, completes or alters a written instrument which is or purports to be, or which is calculated to become or to represent if completed. . . .[an] instrument which does or may evidence, create, transfer, terminate or otherwise affect a legal right, interest, obligation or status. . . .
A person violates Education Law Sect. 6512(1), while not being authorized to practice under said law, practiced or offered to practice or held himself out as being able to practice the profession of engineering, a profession in which a license was a prerequisite to the practice of the acts, or aided or abetted an unlicensed person to practice the profession of engineering. . . .
The second degree forgery counts, a Class D felony, carry an indeterminate sentence with a maximum of seven years in prison. Unfortunately, if this is Mr. Pappalardo’s first offense he may be entitled to a probationary period instead of jail time. The violation of Education Law 6512(1) is a class E felony that carries a maximum sentence of four years with a likelihood of probation considering this is presumably his first offense. It’s difficult to believe Mr. Pappalardo will not receive any jail time considering the widespread anguish and damage this caused thousands of Superstorm Sandy victims. The public outcry of the altered engineering reports detailed on the CBS program, “60 Minutes”, and the blatant defrauding of policyholders could entice the judge to impose jail time.
This could potentially be the first of many indictments handed down by the New York attorney general in the coming months and years. Attorney General Schneiderman indicated that his office had uncovered evidence of other crimes outside the state, and that those findings had been referred to the federal Justice Department. He also released a report identifying several fundamental flaws in the National Flood Insurance Program, which includes recommendations to increase transparency and accountability.
I think I speak for every policyholder when I say that transparency and accountability would be ideal in a perfect world, however, I’ll believe it when I see it. For now, we can only hope that more of these indictments are forthcoming to hold those responsible for the fraud that ensued after Superstorm Sandy. Maybe FEMA should take some of A.G. Schneiderman’s suggestions and start making the Sandy Review Process more transparent to start.
I leave you with a quote from Washington Post columnist, Thomas Boswell: “Cheating is baseball’s oldest profession.” Lets hope cheating doesn’t become the NFIP’s oldest profession.
