A federal lawsuit filed yesterday accuses top officials in the U.S. Department of Homeland Security and the Federal Emergency Management Agency of conspiring to defraud Maryland residents with flood insurance after their homes were damaged by Hurricane Isabel nearly two years ago.

According to the lawsuit -- filed in U.S. District Court in Greenbelt on behalf of more than 140 people in Maryland -- Homeland Security Undersecretary Michael Brown, David Maurstad, who runs the National Flood Insurance Program, 17 insurance companies and others knowingly paid out far less than policyholders deserved to repair flooded homes and property. The lawsuit seeks about $2 billion in damages.

"It's been systematic low-balling, high-pressure tactics to get people to accept pennies on the dollar of what they're entitled to," said Martin Freeman, a lawyer representing the plaintiffs. "And as a result, these families are being destroyed."

A spokesman for FEMA, which is part of Homeland Security, said that Brown, undersecretary for emergency preparedness and response, and Maurstad would not comment on the suit. But in testimony before Congress in April, Maurstad defended the National Flood Insurance Program and said that "there is a fundamental misunderstanding" of its intent. Maurstad said the program was "never intended to restore policyholders to pre-flood condition; it was designed to help them recover."

Critics of the program contend that sales agents marketing flood insurance say homeowners will be fully restored, minus the deductible, to their "pre-flood conditions." This language also is found in the Flood Insurance Reform Act of 2004.

The suit alleges that Computer Sciences Corp. -- the government's fourth-largest information technology vendor, with more than 8,000 employees in the Washington area -- trained sales agents in seminars and with written materials to tell customers they would be fully compensated, while at the same time training insurance adjusters to follow incorrect and overly strict guidelines on what warranted payment. The end result of this disparity, according to the suit, was that policyholders were shortchanged hundreds of thousands of dollars in some cases.

Michael Dickerson, a spokesman for Computer Sciences, would not comment, saying the company had not yet been served with the lawsuit.

About 24,000 people along the East Coast filed federal flood claims after Isabel swept through in September 2003. In Maryland alone, hundreds complained about flood insurance payments.

Twenty months after the storm, 85 families in Maryland and 64 families in Virginia are living in FEMA trailers, agency officials said. FEMA spokesman Butch Kinerney said there "could be a thousand different reasons" why a family would still require a trailer, including contractor's delays. Trailers are "not always there because they've got a flood insurance issue," he said.

The outrage over what was perceived as insufficient payments prompted FEMA to review about 2,250 claims, which resulted in $8 million in additional payments for about half the policyholders reviewed, according to Maurstad. Critics said many of the adjusters who originally mishandled the claims were doing the reviews.

Alfred W. Redmer Jr., the Maryland insurance commissioner, testified before Congress in April that one problem was that adjusters had calculated repair costs by using pricing data that did not reflect the true costs of building materials. He also said there was "a shortage of trained adjusters and a confusing and complicated bureaucracy that is difficult for the average consumer to navigate."

As a result, he said, "consumers have been offered insufficient settlement amounts" from the flood insurance program.

Houses in North Beach, in Calvert County, shown in 2003, were among thousands battered by Hurricane Isabel.