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Hurricane Sandy Judge in New York Blows Whistle on Insurance Industry Fraud

Damaged property on Long Island following Hurricane Sandy on Nov. 2, 2012
Damaged property on Long Island following Hurricane Sandy on Nov. 2, 2012Photograph by Bruce Bennett/Getty Images

A recent dispatch on how CSX Transportation used the federal anti-racketeering law to go after plaintiffs’ attorneys bringing phony asbestos claims prompted a reader to point out some chicanery within the defense bar. Sure enough, there was a story worth telling about insurance claims related to Sandy, the superstorm that did such horrendous damage to the East Coast in 2012.

The hero of this little tale is U.S. Magistrate Judge Gary Brown, who holds court in Central Islip, Long Island, a suburban branch of the Eastern District of New York, which is based in Brooklyn. Brown, a former federal prosecutor who also has experience as an in-house corporate attorney, is overseeing a batch of lawsuits concerning insurance claims stemming from Sandy. In one otherwise unremarkable dispute over damage suffered by homeowners in Long Beach, N.Y., Brown discovered that an engineering firm working for Wright National Flood Insurance tried to cover up losses caused by the 2012 storm. When the judge tried to get to the bottom of the deception during a hearing in October, lawyers for the Florida-based insurance company attempted to thwart the inquiry, Brown wrote in an unusual opinion issued on Nov. 7.