Four charged with filing false applications for Sandy relief funds

Acting Attorney General John J. Hoffman announced that four additional individuals were charged criminally today with filing fraudulent applications for federal relief funds related to Superstorm Sandy.  Since March, the Attorney General’s Office has filed criminal charges against 12 people for allegedly engaging in this type of fraud, including the four 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 DCA. The eight individuals charged previously were all homeowners who allegedly obtained relief funds by falsely claiming that storm-damaged homes at the Jersey Shore were their primary homes, which is a requirement under the relief programs. In reality, the homes were rental properties or vacation homes.  One of the four defendants charged today allegedly obtained $137,400 in proceeds from an SBA loan by falsely claiming a vacation home she owned in Manahawkin was her primary home.  She is charged with second-degree theft.  The other three defendants charged today face third-degree theft or attempted theft charges.  One allegedly attempted to obtain HUD funds by filing two false applications claiming houses he rented to others were his primary residence, while the other two defendants allegedly committed other types of fraud involving FEMA rental assistance. 

“The circumstances of these new cases vary widely, but all four defendants are alleged to have shamelessly falsified information to drain Sandy relief funds away from legitimate applicants,” said Acting Attorney General Hoffman.  “We’re working hard to recover these funds and to stop dishonest applicants from wasting the time and resources of relief administrators who need to focus on helping deserving victims.”

The Division of Criminal Justice charged the following defendants today by complaint-summons:

 

  1. Mary Conlin, 51, of West Chester, Pa., was charged with second-degree theft by deception and fourth-degree unsworn falsification.  In applying for a low-interest SBA disaster-relief loan, Conlin allegedly falsely claimed that a storm-damaged house that she owns on Nancy Drive in Manahawkin was her primary residence, when in fact it was a vacation home.  Conlin ultimately was approved for a $145,900 SBA loan, from which she received $137,400 in loan proceeds.  An auditing firm retained by the Department of Community Affairs referred this case to the Division of Criminal Justice.

 

  1. Leonor Canales, 40, of Orlando, Fla., formerly of Elizabeth, N.J., was charged with third-degree theft by deception and fourth-degree unsworn falsification.  Canales applied for FEMA rental assistance after the apartment she rented in Elizabeth was damaged by Superstorm Sandy.  Canales allegedly received a total of $22,172 in FEMA rental assistance through February 2014, while fraudulently failing to disclose that throughout the period covered by the FEMA rental assistance, she received federal Section 8 Housing Assistance that covered her rent.  She submitted numerous false receipts indicating that she personally had paid rent in order to back up her claim for FEMA rental relocation funds. This case was referred to the Division of Criminal Justice by the U.S. Department of Homeland Security Office of Inspector General and the HUD Office of Inspector General.

 

  1. Rita O’Connor, 60, of Toms River, was charged with third-degree theft by deception.  It is alleged that O’Connor, whose home in Toms River was damaged in Superstorm Sandy, fraudulently obtained $2,270 in FEMA rental assistance by falsifying checks and receipts for two months of rent that she purportedly paid to her daughter to rent a home in Ridgewood.  It is alleged that O’Connor never rented the home, which was not owned by her daughter.  The U.S. Department of Homeland Security’s Office of Inspector General referred this case to the Division of Criminal Justice.

 

  1. Magdi Mosaid, 55, of Hasbrouck Heights, was charged with two counts of third-degree attempted theft by deception and one count of fourth-degree unsworn falsification.  It is alleged that Mosaid filed two fraudulent applications for Homeowner Resettlement grants funded through HUD and administered by the New Jersey Department of Community Affairs in connection with storm-damaged properties in Little Ferry and Rochelle Park.  In each case, he allegedly falsely claimed that the house was his primary residence, when in fact it was a rental property that he owned as a landlord.  DCA flagged the applications because they reflected multiple primary residences for a single applicant, and no funds were paid on the claims.  The Department of Community Affairs referred this case to the Division of Criminal Justice.

 

“With these ongoing prosecutions, we’re delivering a wake-up call to anyone who would consider taking Sandy relief funds through fraud,” said Director Elie Honig of the Division of Criminal Justice.  “Falsifying these applications is a crime, and anyone who does it will be caught and charged as a criminal.  We continue to investigate these cases with our state and federal partners.”

“It is unconscionable that fraudsters would attempt to steal much needed RREM and Resettlement grants from eligible applicants who were impacted by Sandy and trying to rebuild their lives,” said New Jersey Department of Community Affairs Commissioner Richard E. Constable III. “Be warned. We will remain vigilant with our partners at HUD and the Attorney General’s Office in pursuit of rooting out anyone who attempts to misuse our Sandy recovery programs.”

The cases filed today 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 Mark Kurzawa and John A. Nicodemo are prosecuting the defendants.  They are working with Lt. David Nolan, Sgt. Fred Weidman and Analyst Alison Callery, who are coordinating and conducting the investigations for the Division of Criminal Justice Financial & Computer Crimes Bureau, along with Detectives Katelyn Sake, Scott Stevens and Eric Ludwick.

Second-degree charges carry a sentence of five to 10 years in state prison and a fine of up to $150,000, while third-degree charges carry a sentence of three to five years in prison and a fine of up to $15,000.  Fourth-degree charges carry a sentence of up to 18 months in 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 $31,000 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 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.

 

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