Senators call for hearing into fraudulent reports linked to Superstorm Sandy

NEW YORK - First they lost everything in Superstorm Sandy and now thousands of homeowners in New York and New Jersey appear to have been victimized again.

Senators from New York and New Jersey are demanding hearings after CBS' "60 Minutes" reported Sunday night that insurance companies may have falsified engineering reports in order to reduce payouts, and that FEMA may have turned a blind eye to the problem.

It doesn't take an engineer to see that Sandy damaged some of these homes beyond repair.

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Senators are seeking hearings regarding fraudulent reports allegedly made by insurance companies CBS News

Bob Kaible told Sharyn Alfonsi on "60 Minutes" that his house in Long Beach, N.Y. was knocked off its foundation and condemned. But the insurance company's engineering report concluded there was "no structural damage."

"I'm going like, 'what do you mean there's no structural damage? The house is not what it was before,' " said Kaible.

New York senator Kirsten Gillibrand says she's heard similar stories from dozens of constituents.

"Based on the documents I've seen its looks like large scale fraud," she said. "Its rigging of the system against homeowners to make sure insurance claims are not paid out."

Forty phone calls later, Kaible was finally granted a re-inspection by the same engineer. "I said, 'George, how could you write a report like that?' He goes, 'it's not my report.' "

The Storm after the Storm

His report, they discovered, had been altered.

Engineer Andrew Braum who works at a different company says the same thing happened to him.

He told Alfonsi 175 of his reports were doctored, and the ones that weren't changed "interestingly were ones where I recommended that no repairs are required," said Braum.

"'60 Minutes' revealed that FEMA, which backs flood insurance using taxpayer money, first got complaints in mid-2013 but failed to investigate.

In a statement this afternoon, Homeland Security Secretary Jeh Johnson said "the '60 Minutes' report is a matter of great concern to me and FEMA Administrator Craig Fugate." He said "FEMA is fully cooperating with policy holders whose claims are under appeal...and is seeking to settle as many claims as possible."

Gillibrand said FEMA was "not responsive enough" to her concerns.

"I put them on notice in June the [Inspector General's] investigation did not start until the end of the year," she said. "So that's a long bit of time where I would have liked these claims to stop being denied, where I would like this litigation to not be continuing," she said.

Gillibrand said she wants to figure out whether this is just negligence on FEMA's part or something more. Senators are hoping hearings will help to determine whether this is a problem that has actually been stretching back for years, back to Hurricane Katrina in 2005.

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    Nancy Cordes is CBS News' congressional correspondent.