AG’s Office: Eight Charged with Filing False Hurricane Sandy Relief Applications

Acting Attorney General John J. Hoffman today announced that his office charged eight additional individuals with criminally today with filing fraudulent applications for federal relief funds related to Superstorm Sandy. Since March 2014, the Attorney General’s Office has filed criminal charges against 45 people for allegedly engaging in this type of fraud, including the eight individuals charged today.

Hoffman said the Attorney General’s Office is continuing its aggressive efforts to investigate fraud in Sandy relief programs, working jointly with the New Jersey Department of Community Affairs (DCA) and the Offices of Inspector General of the U.S. Department of Homeland Security, the U.S. Department of Housing and Urban Development (HUD), and the U.S. Small Business Administration (SBA).

The individuals who have been charged are alleged, in most cases, to have filed fraudulent applications for relief funds offered by the Federal Emergency Management Agency (FEMA).  In some cases, they also applied for funds from a Sandy relief program funded by HUD or low-interest disaster loans from the SBA. The HUD funds are administered in New Jersey by the Department of Community Affairs.

“These individuals are alleged to have callously stolen Sandy relief funds, diverting aid from deserving recipients and forcing administrators to police this fraud instead of working exclusively to assist those hardest hit by the storm,” said Acting Attorney General Hoffman.  “At a time when so many stepped up to help others, these defendants are alleged to have crookedly helped themselves.”

The following defendants were charged today by complaint-summons:

  • Sandra L. Elliott, 44, of Nutley, N.J., allegedly fraudulently obtained a total of $93,055 by filing false applications following Superstorm Sandy for state grants under the Homeowner Resettlement Program (RSP) and the Reconstruction, Rehabilitation, Elevation and Mitigation (RREM) Program.  It is alleged that Elliott falsely claimed that a storm-damaged property she co-owns with her parents on East Coral Drive in Brick, N.J., was her primary residence at the time Sandy hit.  It is alleged that, in reality, Elliott’s primary residence was in Nutley, and the Brick property was a vacation home.  Elliott received a $10,000 RSP grant and a total of $83,055 in RREM grant payments to repair the Brick property.  She allegedly submitted fraudulent rent receipts that falsely indicated that she had leased her Nutley home to a renter prior to the storm.  Elliott also applied for a low-interest SBA disaster-relief loan, but her application for an SBA loan was rejected.  Elliott is charged with second-degree theft by deception and fourth-degree unsworn falsification.
  • Laura Cortese, 53, and Anthony Cortese, 53, of Warren, N.J., allegedly filed fraudulent applications for relief funds following Superstorm Sandy.  It is alleged that the married couple falsely claimed that a storm-damaged property they own on Fremont Avenue in Seaside Heights, N.J., was their primary residence at the time Sandy hit.  It is alleged that, in reality, their primary residence was in Warren, and the property in Seaside Heights was a summer home.  Together the couple filed an application for a low-interest SBA disaster-relief loan.  They were approved for a $64,000 SBA loan, but ultimately accepted and received just $40,000 in loan proceeds. The other applications were filed solely by Laura Cortese and resulted in the receipt of an additional $40,998 in relief funds, for a total of $80,998 in federal and state grant and loan funds received between the two defendants.  Laura applied for FEMA assistance and state grants under the Homeowner Resettlement Program (RSP) and the Reconstruction, Rehabilitation, Elevation and Mitigation (RREM) Program.  She received $28,875 in FEMA rental assistance.  She also received a $10,000 RSP grant and a $2,123 RREM grant payment.  Laura Cortese is charged with second-degree theft by deception and fourth-degree unsworn falsification.  Anthony Cortese is charged with third-degree theft by deception and fourth-degree unsworn falsification.
  • Patrick Dori, 58, of Englewood, N.J., allegedly filed fraudulent applications following Superstorm Sandy for FEMA assistance and state grants under the Homeowner Resettlement Program (RSP) and the Reconstruction, Rehabilitation, Elevation and Mitigation (RREM) Program.  He received a total of $55,902 as a result of the alleged fraud.  It is alleged that Dori falsely claimed that a storm-damaged property that he owned on Third Avenue in Seaside Heights, N.J., was his primary residence at the time Sandy hit.  It is alleged that, in reality, Dori’s primary residence was in Englewood, N.J., and the property in Seaside Heights was a summer home.  Dori received $31,900 in FEMA relief funds, which is the maximum amount that FEMA allocates to any individual applicant.  He also received a $10,000 RSP grant and a total of $14,002 from a grant under the RREM program. Dori is charged with third-degree theft by deception and fourth-degree unsworn falsification.
  • Michael Murphy, 63, of Staten Island, N.Y., allegedly filed a fraudulent application following Superstorm Sandy for FEMA assistance.  It is alleged that Murphy falsely claimed that a storm-damaged home he owns on Budd Drive in Manahawkin, N.J., was his primary residence at the time Sandy struck.  In fact, his primary residence was in Staten Island, and the home in Manahawkin was a summer home. As a result of the alleged fraudulent application, Murphy received $27,545 in FEMA relief funds. He received $25,275 for home repairs and $2,270 in rental assistance.  Murphy is charged with third-degree theft by deception and fourth-degree unsworn falsification.
  • William O’Donnell, 62, of St. James, N.Y., allegedly filed fraudulent applications following Superstorm Sandy for FEMA assistance, state grants under the Homeowner Resettlement Program (RSP) and the Reconstruction, Rehabilitation, Elevation and Mitigation (RREM) Program, and state rental assistance under the Sandy Homeowner Rental Assistance Program (SHRAP) funded by the State Department of Human Services.  He received a total of $19,176 as a result of the alleged fraud.  It is alleged that O’Donnell falsely claimed that a storm-damaged property he owned with a relative on Cedar Point Avenue in Brick, N.J., was his primary residence at the time Sandy hit.  It is alleged that, in reality, O’Donnell’s primary residence was a relative’s home in St. James, N.Y., and the property in Brick was unoccupied.  O’Donnell received $6,741 from FEMA for rental assistance and personal property loss.  He also received a $10,000 RSP grant and $2,435 in state rental assistance through the SHRAP program.  O’Donnell was awarded the maximum grant of $150,000 under the RREM program, but the award was placed on hold as a result of this investigation and no payments were made.   O’Donnell is charged with second-degree attempted theft by deception, third-degree theft by deception and fourth-degree unsworn falsification.
  • Robert F. Scott, 71, of Jupiter, Fla., allegedly filed a fraudulent application following Superstorm Sandy for FEMA assistance.  It is alleged that Scott falsely claimed that a storm-damaged home he owns on Sunset Drive in Seaside Heights, N.J., was his primary residence at the time Sandy struck.  In fact, his primary residence was in Jupiter, Fla., and the home in Seaside Heights was a vacation home. As a result of the alleged fraudulent application, Scott received $31,900 in FEMA relief funds, which is the maximum amount that FEMA allocates to any individual applicant.  He received $29,630 for home repairs and $2,270 in rental assistance.  Scott is charged with third-degree theft by deception and fourth-degree unsworn falsification.
  • Jordan Clemons, 30, of Atlanta, Georgia, allegedly made false representations and submitted fraudulent documents to obtain property damage assistance from FEMA.  Clemons claimed that his 2000 Volvo S80 was parked in Atlantic City and was damaged by flood waters when Sandy struck.  Based on Clemons’ representations and allegedly false documents he submitted to FEMA, Clemons was awarded $5,000 for personal property damage.  Clemons allegedly provided FEMA with a fabricated letter from an insurance company informing him that, although his car was insured at the time of the storm, his policy did not cover flood damage. In fact, Clemons allegedly had no car insurance when the storm hit, because his insurance had been canceled due to non-payment.  Clemons also allegedly provided a false estimate letter, purportedly from an auto shop in Chester, Pa., indicating the car repairs would cost $7,012.43.  It is alleged that the shop identified in the letter does not exist.  Clemons is charged with third-degree theft by deception and fourth-degree unsworn falsification.

“While the facts vary, the common element in all of these cases is that the defendants shamelessly lied in order to qualify for relief funds that they knew they were not entitled to receive,” said Director Elie Honig of the Division of Criminal Justice. “Our goal in these joint efforts is to recover the stolen funds and also to send a clear message that this type of fraud will be met with serious criminal charges, now and during any future disaster relief efforts.”

“DCA has been committed from day one of the Sandy recovery effort to ensuring that recovery funds get to Sandy survivors who legitimately qualify for assistance,” said DCA Commissioner Charles Richman. “As part of our charge to be good stewards of public funds, we have and will continue to vigilantly report to the proper authorities those individuals who seek to misuse Sandy recovery funds.”

Detectives of the New Jersey Division of Criminal Justice and special agents of the U.S. Department of Homeland Security Office of Inspector General, HUD Office of Inspector General and SBA Office of Inspector General investigated.  Deputy Attorneys General Mary E. McAnally, John Nicodemo, Valerie A. Noto and William N. Conlow are prosecuting the eight new defendants, under the Supervision of Deputy Attorney General Michael A. Monahan, Chief of the Financial & Computer Crimes Bureau, and Deputy Attorney General Mark Kurzawa, Deputy Bureau Chief.  They are working with Lt. David Nolan, Sgt. Fred Weidman and Analyst Alison Callery, who are conducting and coordinating the investigations for the Division of Criminal Justice, along with other detectives, including Detectives Terrence Buie, Thomas Page, Mike Arduini and Mark Byrnes.

Second-degree charges carry a sentence of five to 10 years in state prison and a fine of up to $150,000.  Third-degree charges carry a sentence of three to five years in state prison and a fine of up to $15,000, while fourth-degree charges carry a sentence of up to 18 months in state prison and a fine of $10,000.  The charges are merely accusations and the defendants are presumed innocent until proven guilty.

On Oct. 29, 2012, Superstorm Sandy hit New Jersey, resulting in an unprecedented level of damage.  Almost immediately, the affected areas were declared federal disaster areas, making residents eligible for FEMA relief.  FEMA grants are provided to repair damaged homes and replace personal property.  In addition, rental assistance grants are available for impacted homeowners. FEMA allocates up to $31,900 per applicant for federal disasters.  To qualify for FEMA relief, applicants must affirm that the damaged property was their primary residence at the time of the storm.

In addition to the FEMA relief funds, HUD allocated $16 billion in Community Development Block Grant (CDBG) funds for storm victims along the East Coast.  New Jersey has received $2.3 billion in CDBG funds for housing-related programs, including $215 million that was allocated for the Homeowner Resettlement Program (RSP) and $1.1 billion that was allocated for the Reconstruction, Rehabilitation, Elevation and Mitigation (RREM) Program.  Under the Resettlement Program, the New Jersey Department of Community Affairs is disbursing grants of $10,000 to encourage homeowners affected by Sandy to remain in the nine counties most seriously impacted by the storm: Atlantic, Bergen, Cape May, Essex, Hudson, Middlesex, Monmouth, Ocean and Union counties. The RREM Program, which is the state’s largest housing recovery program, provides grants to Sandy-impacted homeowners to cover rebuilding costs up to $150,000 that are not funded by insurance, FEMA, U.S. Small Business Administration loans, or other sources.

The Small Business Administration provides low-interest disaster loans to homeowners, renters, businesses of all sizes, and most private nonprofit organizations. SBA disaster loans can be used to repair or replace real estate, personal property, machinery and equipment, and inventory and business assets damaged or destroyed in a declared disaster. Renters and homeowners may borrow up to $40,000 to repair or replace clothing, furniture, cars or appliances damaged or destroyed in the disaster.  Homeowners may apply for a loan of up to $200,000 to replace or repair their primary residence to its pre-disaster condition. Secondary homes or vacation properties are not eligible for these loans, but qualified rental properties may be eligible for assistance under the business loan program.

 

AG’s Office: Eight Charged with Filing False Hurricane Sandy Relief Applications