OAG: Seven More Charged with Filing False Sandy Applications

Acting Attorney General Robert Lougy announced that seven additional individuals were charged 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 57 people for allegedly engaging in this type of fraud, including the seven individuals charged today.

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 many cases, they also applied for funds from a Sandy relief program funded by HUD, low-interest disaster loans from the SBA, or assistance provided by the New Jersey Department of Human Services. The HUD funds are administered in New Jersey by the Department of Community Affairs.

“Under each of these disaster relief programs, it was made absolutely clear that only those whose primary residences were damaged qualified for aid, but these defendants selfishly lied about their situation to divert funding intended for those left homeless when Sandy struck,” said Acting Attorney General Lougy.  “It’s a sad truth that even in the direst of emergencies, when so many generous people step forward to lend a hand, there are others who will dishonestly exploit an offer of assistance.”

The following defendants were charged today by complaint-summons:

  • James Avellini, 67, and Susan Horty-Avellini, 65, of Red Bank, N.J., allegedly fraudulently obtained a total of $49,969 by filing false applications following Superstorm Sandy for FEMA assistance and state grants under the Homeowner Resettlement Program (RSP) and the Sandy Homeowner and Renter Assistance Program (SHRAP) funded by the New Jersey Department of Human Services.  It is alleged that the married couple falsely claimed in the applications that a storm-damaged property that they owned on Norman Court in Lavallette, N.J., was their primary residence at the time Sandy hit.  It is alleged that, in reality, the couple’s primary residence was in Red Bank, N.J., and the property in Lavallette was a seasonal home.  The couple received a $24,992 FEMA grant, a $10,000 RSP grant, and $14,977 in SHRAP funding.  Both defendants are charged with third-degree theft by deception and fourth-degree unsworn falsification.
  • Claire P. Sullivan, 55, and Catherine Perry, 57, of Caldwell, N.J., allegedly fraudulently obtained a total of $22,253 by filing false applications following Superstorm Sandy for a state grant under the Homeowner Resettlement Program (RSP) and state assistance under the Sandy Homeowner and Renter Assistance Program (SHRAP) funded by the New Jersey Department of Human Services.  In addition, Sullivan allegedly fraudulently attempted to obtain $77,801 by filing a false application for a grant from the Reconstruction, Rehabilitation, Elevation and Mitigation (RREM) Program.  Sullivan was awarded $77,801 but no RREM monies were disbursed because she was later determined to be ineligible.  Sullivan and Perry, who are married, claimed in the applications that a storm-damaged residence they owned on Island Avenue in Seaside Park, N.J., was their primary residence at the time Sandy hit.  It is alleged that, in reality, their primary residence was in Caldwell at the time of the storm.  The couple received a $10,000 RSP grant and $12,253 in mortgage assistance from SHRAP.  Sullivan repaid the RSP grant.  Sullivan is charged with second-degree attempted theft by deception and third-degree theft by deception.  Perry is charged with third-degree theft by deception.
  • Concetta Curry, 63, of Brooklyn, N.Y., allegedly fraudulently obtained a total of $18,883 by filing false applications following Superstorm Sandy for a state grant under the Homeowner Resettlement Program (RSP) and state assistance under the Sandy Homeowner and Renter Assistance Program (SHRAP) funded by the New Jersey Department of Human Services. Curry allegedly falsely claimed on the applications that a storm-damaged property she owned on Monterey Drive in Brick, N.J., was her primary residence when Sandy hit.  It is alleged that, in fact, her primary residence was in Brooklyn, N.Y., at the time of the storm and the Brick residence was a rental property.  Curry received a $10,000 RSP grant and $8,883 in mortgage and utility payment assistance from SHRAP.  Curry is charged with third-degree theft by deception and fourth-degree unsworn falsification.
  • Leonard Itri, 41, of Philadelphia, Pa., allegedly fraudulently obtained a total of $11,888 by filing false applications following Superstorm Sandy for FEMA rental assistance and a state grant under the Homeowner Resettlement Program (RSP).  In addition, he allegedly fraudulently attempted to obtain $77,769 by filing a false application for a grant from the Reconstruction, Rehabilitation, Elevation and Mitigation (RREM) Program.  He was awarded $77,769 but no RREM monies were disbursed because he was later determined to be ineligible. It is alleged that Itri falsely claimed in his applications that a storm-damaged property that they owned on North Surrey Avenue in Ventnor, N.J., was his primary residence at the time Sandy hit.  It is alleged that, in reality, his primary residence was in Philadelphia and the property in Ventnor was a seasonal home.  Itri received a $10,000 RSP grant and $1,888 in FEMA rental assistance.  He repaid the RSP grant.  Itri is charged with second-degree attempted theft by deception, third-degree theft by deception, and fourth-degree unsworn falsification.
  • Kevin P. Trotta, 51, of Surf City, N.J., allegedly fraudulently obtained a total of $12,820 by filing false applications following Superstorm Sandy for FEMA rental assistance and a state grant under the Homeowner Resettlement Program (RSP) on behalf of a relative for whom he had been named power of attorney.  At the time Sandy hit, Trotta was living in a home on 10th Street in Surf City that was damaged by the storm.  The home was not owned by Trotta; it was owned by the relative for whom he was power of attorney.  It is alleged that Trotta filed false applications on behalf of the relative claiming that the home in Surf City also was her primary residence at the time Sandy struck.  It is alleged that, in reality, the relative’s primary residence was in Tucson, Arizona.  Trotta filed a joint application on behalf of himself and his relative that led to him receiving a $10,000 RSP grant.  He also filed an application on behalf of his relative which led to $2,820 in FEMA rental assistance being paid into a joint account they held.  Trotta is charged with third-degree theft by deception and fourth-degree unsworn falsification.

“Through these joint investigations with our state and federal law enforcement partners, we’re working to ensure that limited disaster relief funds are allocated to the qualified victims who were hardest hit,” said Director Elie Honig of the Division of Criminal Justice. “We’re also sending a deterrent message that we hope will reduce this criminal conduct in future emergencies, so relief administrators can focus on recovery efforts instead of policing fraud.”

“Sandy recovery remains central to DCA’s mission, and a key part of that mission is helping our law enforcement partners root out people who are trying to game the system at the expense of storm victims who legitimately qualify for help,” said DCA Commissioner Charles A. Richman. “Because defrauders and scammers impede the State’s recovery efforts and pilfer taxpayer dollars, my Department doesn’t hesitate to report suspicious applications when we see them.”

The new cases were investigated by 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.   Deputy Attorneys General Valerie A. Noto, John Nicodemo and Norma R. Evans are prosecuting the seven 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 Detective Terrence Buie, and Special Civil Investigators Rita Binn, James Parolski and Vicki Vreeland.

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.

OAG: Seven More Charged with Filing False Sandy Applications