In today's world, online social media plays a vital role during real world events, especially crisis events. There are both positive and negative effects of social media coverage of events, it can be used by authorities for effective disaster management or by malicious entities to spread rumors and fake news. The aim of this paper, is to highlight the role of Twitter, during Hurricane Sandy (2012) to spread fake images about the disaster. We identified 10,350 unique tweets containing fake images that were circulated on Twitter, during Hurricane Sandy. We performed a characterization analysis, to understand the temporal, social reputation and influence patterns for the spread of fake images. Eighty six percent of tweets spreading the fake images were retweets, hence very few were original tweets. Our results showed that top thirty users out of 10,215 users (0.3%) resulted in 90% of the retweets of fake images; also network links such as follower relationships of Twitter, contributed very less (only 11%) to the spread of these fake photos URLs. Next, we used classification models, to distinguish fake images from real images of Hurricane Sandy. Best results were obtained from Decision Tree classifier, we got 97% accuracy in predicting fake images from real. Also, tweet based features were very effective in distinguishing fake images tweets from real, while the performance of user based features was very poor. Our results, showed that, automated techniques can be used in identifying real images from fake images posted on Twitter.