Sandy Insurance Issues Said to Be Focus of Criminal Probe

New York’s attorney general has opened a criminal probe into accusations by Hurricane Sandy victims that insurance companies rejected claims for flood damage to their properties based on falsified engineering reports, a person familiar with the matter said.

New York homeowners have filed at least three lawsuits in federal court accusing the insurers which contract with the government’s National Flood Insurance Program of scheming with engineering firms, and others involved in handling claims to deny or reduce damage payouts based on fraudulently manipulated reports. The state’s attorney general, Eric Schneiderman, has begun an investigation into whether any crimes were committed, said the person, who declined to be named because the information isn’t public.