TRENTON – Acting Attorney General John J. Hoffman announced that three 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 23 people for allegedly engaging in this type of fraud, including the three individuals charged today.
The Attorney General’s Office is continuing to aggressively 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.
“By allegedly defrauding federal and state relief programs, these defendants callously stole funds intended for those who were hit hardest by Superstorm Sandy, namely the many residents whose primary homes were battered beyond habitability,” said Acting Attorney General Hoffman. “Meanwhile, these offenders also are taxing the resources of relief administrators who must police this fraud when they should be able to focus entirely on helping those in need.”
The Division of Criminal Justice charged the following defendants today by complaint-summons:
“We’ve made these fraud investigations a priority in order to ensure that all available Sandy relief is going to deserving victims,” said Director Elie Honig of the Division of Criminal Justice. “Just last week, we conducted a major Sandy fraud training program with our law enforcement partners to further strengthen our effectiveness as we continue to pursue these prosecutions.”
“It is unconscionable that fraudsters are trying to steal federal assistance from eligible applicants impacted by Sandy, so we will remain vigilant in pursuit of those who seek to misuse our recovery programs,” said New Jersey Department of Community Affairs Commissioner Richard E. Constable, III.
The 23 cases filed by the Attorney General’s Office 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 (DHS-OIG), HUD Office of Inspector General and SBA Office of Inspector General. The three cases charged today were investigated by DHS-OIG, HUD-OIG and the Division of Criminal Justice. Deputy Attorneys General Peter Gallagher, Derek Miller and William N. Conlow are prosecuting the defendants, under the Supervision of Deputy Attorney General Michael Monahan, who is Chief of the Financial & Computer Crimes Bureau, and Deputy Attorney General Mark C. Kurzawa, who is 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 Financial & Computer Crimes Bureau, along with other detectives, including Detectives Benjamin Kukis, Anthony Luyber and Jack Campanella.
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.
####