TRENTON – On the eighth anniversary of Superstorm Sandy, Attorney General Gurbir S. Grewal and Division of Criminal Justice Director Veronica Allende today recognized the historic efforts of the Sandy Fraud Task Force, a groundbreaking collaboration of state, federal, and county law enforcement partners who carried out a sweeping anti-fraud program through which over 240 defendants were charged criminally in the wake of the catastrophic storm.
The Division of Criminal Justice (DCJ), within the Attorney General’s Office, led the Sandy Fraud Task Force.It charged 145 defendants in criminal cases related to Sandy fraud.Attorneys, detectives, and staff in the DCJ Financial & Cyber Crimes Bureau investigated the cases jointly with the New Jersey Department of Community Affairs and the Offices of Inspector General of the U.S. Department of Homeland Security, the U.S. Department of Housing and Urban Development, the U.S. Small Business Administration, and the U.S. Department of Health and Human Services. New Jersey’s Division of Consumer Affairs, Motor Vehicle Commission, Office of the State Comptroller, Department of the Treasury Office of Criminal Investigation, Department of Human Services, and Department of Labor assisted, along with the U.S. Postal Inspection Service and nonprofit National Insurance Crime Bureau.
Beyond those 145 cases, the four County Prosecutors’ Offices participating in the Sandy Fraud Task Force – Atlantic, Ocean, Monmouth, and Middlesex – charged more than 97 defendants, and the Office of the Insurance Fraud Prosecutor within the Attorney General’s Office charged five defendants.
Defendants charged by the Division of Criminal Justice diverted approximately $9.5 million in Sandy relief funds. The Division, through its prosecutions, has obtained court orders requiring defendants to pay back approximately $8.2 million in previously unpaid restitution.The Division has collected approximately $5.5 million to date pursuant to those orders, and collection of restitution is continuing.
“I commend the Division of Criminal Justice and all of our partners on the Sandy Fraud Task Force for conducting this far-reaching anti-fraud program, which undoubtedly will serve as a model for state and federal collaboration during future emergency relief efforts across the United States,” said Attorney General Grewal.“ We sent a powerful deterrent message that those who commit fraud after a disaster to selfishly take relief funds intended for victims whose primary homes were devastated will be charged as criminals and made to pay back what they stole. Moreover, con artists and crooked contractors who exploit disaster victims with phony offers of assistance or promises to rebuild may be put behind bars. The task force hammered home these messages by diligently pursuing every case of fraud it uncovered.”
“The lessons learned from the Sandy Fraud Task Force are already being applied today in the investigation of COVID 19 frauds and schemes,” Attorney General Grewal added.“It’s a regrettable reality that during major emergencies, when so many step up and make sacrifices to serve others, there are bad actors who instead see only opportunities to serve themselves by breaking the law.We are again joining forces across all levels of law enforcement to address these crimes.”
“I’m proud of our team in the Division of Criminal Justice Financial & Cyber Crimes Bureau and all of our state, federal and county partners for their extraordinary collaboration in this initiative,” said Director Veronica Allende of the Division of Criminal Justice. “Most of our prosecutions were cases of primary residence fraud that required extensive witness interviews and documentary evidence to get to the truth.Task force members worked tirelessly to ensure that these defendants were held accountable.”
Of the 145 cases charged by the Division of Criminal Justice, 135 involved fraudulent applications for Sandy relief funds, and the vast majority of these relief-fraud cases involved “primary residence fraud.” In such cases, the defendant sought disaster relief funds for a secondary or vacation home by falsely claiming and certifying that it was his or her primary residence at the time of the disaster. The average amount of funds stolen by each defendant in the relief-fraud cases was approximately $70,000.
In most cases, the defendants filed fraudulent applications for funds from the Federal Emergency Management Agency (FEMA). Frequently, they also applied for Sandy relief funds from the U.S. Department of Housing and Urban Development (HUD), low-interest disaster loans from the U.S. Small Business Administration (SBA), or funds from the U.S. Department of Health and Human Services (HHS). The HUD funds were administered in New Jersey by the State Department of Community Affairs and the HHS funds were administered by the New Jersey Department of Human Services.
Three of the more egregious cases of Sandy relief fraud filed by the Division of Criminal Justice resulted in prison sentences. See the press releases at the following links about Nikola Lulaj, a former police officer convicted at trial of stealing $187,000 in Sandy relief funds; James M. Russo, who was provided a rent-free apartment through a charity after the storm, but fraudulently applied for FEMA rental assistance; and Sandipkumar Patel, a motel owner who falsely claimed he sheltered Sandy victims in order to collect $81,000 in federal disaster relief funds:
Lulaj: https://www.nj.gov/oag/newsreleases19/pr20190107b.html
Russo: https://www.nj.gov/oag/newsreleases16/pr20160122a.html
Patel: https://www.nj.gov/oag/newsreleases16/pr20161104a.html
Approximately 55 of the 135 relief-fraud cases filed by the Division of Criminal Justice were resolved through guilty pleas resulting in probation, conditioned upon payment of full restitution. Most of the remaining relief-fraud cases were resolved with the defendants agreeing to pay full restitution and being admitted by the court into the Pre-Trial Intervention Program without pleading guilty.
In addition to the Sandy relief-fraud cases, the Division of Criminal Justice charged and secured prison sentences against Jeffrey Colmyer, a crooked contractor; David Scott Ruddy, who posed as a Red Cross worker and stole from displaced victims by promising them housing or vehicles; and Jonathan Olin, a used car dealer who sold Sandy-damaged vehicles to unsuspecting customers.
Colmyer: https://www.nj.gov/oag/newsreleases18/pr20181012a.html
Ruddy: https://nj.gov/oag/newsreleases13/pr20131121c.html
Olin: https://nj.gov/oag/newsreleases14/pr20141205d.html
Attorney General Grewal and Director Allende recognized these members of the Division of Criminal Justice Financial & Cyber Crimes Bureau for their outstanding work on the Sandy Fraud Task Force:
Attorneys
DCJ Deputy Director Christine Hoffman, currently Acting Gloucester County Prosecutor
DCJ Deputy Director Robert Czepiel
Former Bureau Chief Michael Monahan
Former Bureau Chief Julia Glass
Bureau Chief Jillian Carpenter
Deputy Bureau Chief Mark Kurzawa
Deputy Attorney General Adedayo Adu
Deputy Attorney General Alyssa Bloom
Deputy Attorney General Thomas Clark
Deputy Attorney General William Conlow
Former Deputy Attorney General Jacalyn Estrada
Former Deputy Attorney General Peter Gallagher
Deputy Attorney General Thomas Huynh
Deputy Attorney General Derek Miller
Deputy Attorney General John Nicodemo
Former Deputy Attorney General Valerie Noto
Former Deputy Attorney General Supriya Prasad
Deputy Attorney General Lisa Rastelli
Detectives and Investigators
Deputy Chief of Detectives William Fredrick
Lt. Frederick Weidman
Former Lt. David Nolan
Detective Kimberly Allen
Former Detective Michael Arduini
Detective Terrence Buie
Detective Matthew Burd
Detective Mark Byrnes
Detective John Campanella
Detective Naike Casciano
Former Detective James Gallo
Former Detective Benjamin Kukis
Detective Richard Loufik
Detective Thomas Page
Detective Lindsay Rajeski
Former Detective Katelyn Sake
Former Detective Stacy Scott
Detective Scott Stevens
Detective Sonya Sullivan
Former Detective Michael Woods
Former Special Civil Investigator Joseph Alfieri
Former Special Civil Investigator Michele Apgar
Special Civil Investigator Rita Binn
Former Special Civil Investigator Sheila Brown
Former Special Civil Investigator Amy Campbell
Former Special Civil Investigator Anthony Cavalano
Special Civil Investigator Jeffrey Gross
Special Civil Investigator Debra Maiorano
Special Civil Investigator Scott Naismyth
Special Civil Investigator James Parolski
Former Special Civil Investigator Ron Rauer
Special Civil Investigator Sherri Stevens
Special Civil Investigator Joseph Tierney
Special Civil Investigator Vicki Vreeland
Other Staff
Analyst Alison Callery
Administrative Assistant Laura Dalton
Technical Assistant Robin Smith
Attorney General Grewal and Director Allende also thanked leaders, administrators, special agents, inspectors and investigators at these agencies for their outstanding work on the Sandy Fraud Task Force:
- New Jersey Department of Community Affairs
- U.S. Department of Homeland Security Office of Inspector General
- U.S. Department of Housing and Urban Development Office of Inspector General
- U.S. Small Business Administration Office of Inspector General
- U.S. Department of Health and Human Services Office of Inspector General
- U.S. Postal Inspection Service
- New Jersey Division of Consumer Affairs
- New Jersey Motor Vehicle Commission
- New Jersey Office of the State Comptroller
- New Jersey Department of the Treasury Office of Criminal Investigation
- New Jersey Department of Human Services
- New Jersey Department of Labor
- Atlantic County Prosecutor’s Office
- Middlesex County Prosecutor’s Office
- Monmouth County Prosecutor’s Office
- Ocean County Prosecutor’s Office
- National Insurance Crime Bureau
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 were provided to repair damaged homes and replace personal property. In addition, rental assistance grants were 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 on the East Coast. New Jersey 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 RSP, the New Jersey Department of Community Affairs disbursed 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 was the state’s largest housing recovery program, provided grants to Sandy-impacted homeowners to cover rebuilding costs up to $150,000 that were not funded by insurance, FEMA, SBA loans, or other sources.
The Small Business Administration provided low-interest disaster loans to homeowners, renters, businesses of all sizes, and private nonprofit organizations. SBA disaster loans may 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 a 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.
The Disaster Relief Act provided HHS approximately $760 million in funding for Sandy victims. The Administration for Children and Families (ACF) received approximately $577 million in Sandy funding through three grant programs, including the Social Services Block Grant (SSBG) program, which received nearly $475 million to help five states (New York, New Jersey, Connecticut, Rhode Island, and Maryland).New Jersey received over $226 million for a wide range of social services directly related to the disaster.New Jersey used SSBG funds to develop the Sandy Homeowner/Renter Assistance Program (SHRAP) to assist individuals/families with expenses for housing and other related needs.
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