(Bloomberg) -- A Hartford Financial Services Group Inc. unit was accused by a lawyer representing Hurricane Sandy victims of using a falsified damage report to dodge paying homeowner claims, the second insurer blamed in the last month for such a practice.

The accusation came in a case before a federal magistrate judge in Central Islip, New York, who said earlier the practice “may be widespread.”

About 1,000 cases of homeowners and other policyholders are pending in the federal court district that includes Central Islip and Brooklyn. The judge, Gary R. Brown, earlier found that another company, Wright National Flood Insurance Co., had used a potentially fraudulent damage report.

The lawyer J. Steve Mostyn, sent the letter to Brown yesterday, saying he was disputing the claim by a Wright National lawyer “that there was no evidence that other agents or contractors use similar engineering practices.”

Sandy, the largest Atlantic storm in history, caused about $60 billion in damage in New Jersey, New York and Connecticut when it struck in October 2012. It killed more than 100 people in the U.S. and triggered the worst flooding in the more than 100-year history of the New York City subway system.

In yesterday’s letter, Mostyn described the experience of Stephen and Sarise Dweck after their home in the Manhattan Beach area of Brooklyn, New York, was devastated by the storm. He filed letters by another attorney for the Dwecks, Mitchell Shpelfogel, and exhibits to support the argument that a damage report was changed to eliminate flooding as the cause.

Engineer’s Finding

An engineer on Jan. 11, 2013, found the storm surge filled the home’s cellar and “washed out” the interior of their first floor, according to the letter.

Mostyn now is one of the lawyers representing the Dwecks, who were provided with flood insurancethrough the Hartford unit under a program administered by the Federal Emergency Management Agency.

The family’s claim with Hartford Insurance Co. of the Midwest was denied based on a version of the report, which had been altered by HiRise Engineering PC to remove the description of widespread flooding damage, according to the letter. The couple complained about the discrepancy.

“Instead of addressing the altered engineering report, Hartford suggested –- nearly one year after the storm -– that a new engineer be selected to produce yet another report,” Mostyn wrote. There is “mounting evidence that altered engineering reports are not isolated.”

Letter’s Purpose

Hartford Financial isn’t named in the suit in which the letter was filed. The description of the Dwecks’ experience was used to back the lawyer’s claim that the alleged practice by Wright National may be widespread.

Tom Hambrick, a spokesman for Hartford Financial, declined to comment on Mostyn’s letter when reached by phone today. There was no response to a message left at HiRise’s offices asking for comment on the letter.

The case in which the judge made his finding was filed by policyholders disputing denial of their claim by Wright.

Wright, which also provides coverage on behalf of the government’s National Flood Insurance Program, “systematically sought to underpay legitimate claims” through the use of “fraudulent engineering and claims handling analysis” by the engineering company U.S. Forensic LLC and other firms, policyholders alleged in a separate racketeering lawsuit.

Storm Damage

Deborah Ramey and other owners of a storm-battered home in Long Beach, New York, said the insurer rejected their claim using a baseless engineering report. In the racketeering suit, hey are seeking to represent potentially hundreds of other policyholders with similar claims.

By denying or underpaying claims, Wright mitigated its risk of facing a government audit and financial penalties for overpayment, according to the complaint.

Brown found last month that an engineering report for the same Long Beach house was potentially fraudulent, having been rewritten to say the problems were due to long-term deterioration after inspectors actually found it was damaged beyond repair by the storm.

Dolores Glass, a spokeswoman for Wright, declined to comment.

In an e-mailed comment last month, a lawyer for U.S. Forensic, Larry E. Demmons, said the company “strongly denies the allegations set forth” in the homeowners’ lawsuit and that its final reports are “technically correct and are based on sound, widely accepted engineering practices.”

The cases are Ramey v. Wright National Flood Insurance Co., 2:14-cv-00461, and Ramey v. U.S. Forensic LLC, 2:14-cv-06861, U.S. District Court, Eastern District of New York (Central Islip).

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