Fraud Lawsuits over Altered Katrina Damage Reports to Go to Trial

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September 15, 2006 2:48 PM

A federal judge has refused to throw out lawsuits accusing an engineering company of cheating homeowners in order to keep them from collecting insurance money.  The suits also accuse two independent engineers of assisting the company in preparing falsified insurance damage reports.

The cases involve homes on the Mississippi Gulf Coast that were destroyed during Hurricane Katrina.  According to the lawsuits, a certified engineer, Ken Overstreet, prepared reports that concluded that the damage to three homes he inspected was due in large part to severe winds, which is covered by homeowners' policies.  However, Overstreet says the engineering company, Rimkus, had another engineer rewrite his reports to show the damage was caused exclusively by water, which is not covered.  Overstreet told ABC News that the company signed his name next to the second engineer's name on the alterted reports, "I was never told that that would be completely changed. And then they'd go ahead and sign my name."

In their lawsuits, the homeowners allege that the rewritten engineering reports were used by the insurance companies that hired Rimkus to deny paying their claims in full.  Rimkus tried to have the suits dismissed, claiming that Overstreet's initial reports only amounted to "draft" versions.  Rimkus also told ABC News that even though the second engineer never visited the home sites in question, it was common practice for a report to be rewritten and signed off on without the original engineer's knowledge or permission.

Attorney Randy Santa Cruz, who is representing one of the plaintiffs, disputed Rimkus' claim, saying the rewritten report amounted to an "outright forgery" and that the company attempted to "usurp Overstreet's professional identity." 

U.S. District Court Judge L.T. Senter said the plaintiffs had met the necessary burden to allow the case to go to trial.