NEWARK, N.J. (AP) — The Federal Emergency Management Administration should investigate allegations that insurance companies handling Superstorm Sandy flood damage claims are manipulating those claims to shortchange victims, U.S. Sen. Robert Menendez said Friday.

At a press conference in his Newark office, Menendez called on FEMA Administrator Craig Fugate to take immediate action after a federal judge in New York found evidence that assessors altered reports so insurance companies can pay less to policyholders. He estimated that thousands of homeowners may have been affected and said FEMA was ultimately responsible.

Sen. Robert Menendez
Sen. Robert Menendez (D-NJ) (Win McNamee/Getty Images)

"They survived the wind, the rain, the storm surge, only to face another nightmare: a flood insurance claim process that threatened to take what the storm had not," Menendez said.

FEMA officials did not immediately respond to requests for comment.

A federal Magistrate judge this week skewered an engineering company hired by the flood insurer to inspect the Long Beach, New York home of Deborah Raimey and Larry Raisfeld, which was damaged by Sandy in 2012.

He said the company secretly rewrote a report that detailed the damage was caused by the storm and the home was unlivable. The final report presented by Wright National Flood Insurance Company said the damage was caused by long-term movement of soil under the home, and their claim was denied.

Judge Gary Brown said the dispute has "exposed reprehensible gamesmanship by a professional engineering company that unjustly frustrated efforts by two homeowners to get fair consideration of their claims." Brown ordered defendants in all Sandy cases to provide copies of all reports not previously produced, including any drafts.

In a letter to Fugate, Menendez urged FEMA to expand the court order to New Jersey and force insurers to disclose all variations of adjuster and engineering damage assessment reports to policyholders. He also called on FEMA to investigate the extent of the practice and impose sanctions on companies found guilty.

Doug Quinn, 50, a financial adviser from Toms River whose home was inundated by floodwater during Superstom Sandy, said he received just $90,000 from his insurance company — even though the damage was originally assessed at more than $250,000. Like the Long Beach case, he said his insurance company assessor concluded "long-term earth movement" and not flood waters were to blame to the damage.

He said the damage Sandy did to his family paled in comparison to "being betrayed by the people who accepted our premiums and failed to honor their legal and ethical commitments."

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