The Federal Emergency Management Agency should investigate allegations that insurance companies handling Hurricane 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.

"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.

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