Attorney General’s Office Charges 100 People with Filing False Applications for Superstorm Sandy Relief Funds
TRENTON, NJ 09.28.2017 – Attorney General Christopher S. Porrino announced that the Attorney General’s Office and its state and federal partners have charged 100 criminal defendants in their unprecedented collaborative efforts to root out fraud in disaster relief programs following Superstorm Sandy. Four new defendants were charged yesterday with filing fraudulent applications for federal relief funds related to Sandy, bringing the total charged by the Attorney General’s Office with this type of fraud to 100.
“Charging 100 defendants in these relief-fraud cases is a sad milestone in that it highlights how many people are willing, in the face of a historic disaster, to dishonestly exploit an offer of aid meant for those who were hardest hit,” said Attorney General Porrino. “At the same time, we’re proud of our collaborative efforts, which have recovered millions of dollars and sent an unmistakable message that those who commit this fraud will face serious criminal charges, now and during any future disasters. The 100 defendants we have charged were responsible for diverting nearly $6 million in relief funds.”
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), the U.S. Small Business Administration (SBA), and the U.S. Department of Health and Human Services (HHS). Also assisting the taskforce is the New Jersey Division of Consumer Affairs, the New Jersey Motor Vehicle Commission, New Jersey Office of the State Comptroller, New Jersey Department of the Treasury Office of Criminal Investigation, U.S. Postal Inspection Service, and the non-profit National Insurance Crime Bureau (NICB).
The defendants 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 funds from HHS. The HUD funds are administered in New Jersey by the New Jersey Department of Community Affairs and the HHS funds are administered by the New Jersey Department of Human Services.
The following defendants were charged yesterday by complaint-summons:
- Michael A. Avena, 65, of Wyckoff, N.J., allegedly filed fraudulent applications following Superstorm Sandy for FEMA assistance and state grants under the Homeowner Resettlement Program (RSP), the Reconstruction, Rehabilitation, Elevation and Mitigation (RREM) Program, and the Sandy Homeowner and Renter Assistance Program (SHRAP). As a result, he allegedly received approximately $201,861 in relief funds to which he was not entitled. Avena allegedly falsely claimed in his applications that a home he owns on 5th Avenue in Ortley Beach, N.J., which was damaged by Superstorm Sandy, was his primary residence when Sandy struck. It is alleged that, in fact, his primary residence at the time of the storm was in Wyckoff and the home in Ortley Beach was a vacation home. As a result of the alleged fraudulent applications, Avena received $31,900 from FEMA, a $10,000 RSP grant, RREM grant funds totaling $150,000, and $9,961 in SHRAP funds. Avena is charged with second-degree theft by deception and fourth-degree unsworn falsification.
- Charles Tuohy, 55, and his wife, Joanne Benzoni, 64, of Tenafly, 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. As a result, the couple allegedly received $162,270 in relief funds to which they were not entitled. Tuohy and Benzoni allegedly falsely claimed in their applications that a home Benzoni owns on Lynn Ann Lane in Manahawkin, N.J., which was damaged by Superstorm Sandy, was their primary residence when Sandy struck. It is alleged that, in fact, their primary residence at the time of the storm was in Tenafly and the home in Manahawkin was a seasonal/weekend home. As a result of the alleged fraudulent applications, Tuohy and Benzoni received $2,270 from FEMA, a $10,000 RSP grant, and $150,000 in RREM grant funds. Tuohy and Benzoni are charged with second-degree theft by deception and fourth-degree unsworn falsification.
- Paula Belotta, 56, of Colonia, N.J., allegedly filed fraudulent applications following Superstorm Sandy for FEMA assistance and a state grant under the Homeowner Resettlement Program (RSP). As a result, she allegedly received $12,270 in relief funds to which she was not entitled. Belotta allegedly falsely claimed in her applications that a home she owns on Fielder Avenue in Ortley Beach, N.J., which was damaged by Superstorm Sandy, was her primary residence when Sandy struck. It is alleged that, in fact, her primary residence at the time of the storm was in Colonia and the home in Ortley Beach was a seasonal/weekend home. As a result of the alleged false applications, Belotta received $2,270 from FEMA and a $10,000 RSP grant. Belotta is charged with third-degree theft by deception and fourth-degree unsworn falsification.
“Our unprecedented collaborative efforts to target Sandy relief fraud have been highly productive, as evidenced by the 100 defendants we’ve charged,” said Director Elie Honig of the Division of Criminal Justice. “The payoff from this anti-fraud program is not only the millions of dollars we are recovering, but also the deterrent message we hammer home each time new charges are filed. Thanks to these efforts, relief administrators in future disasters may be able to spend less time policing fraud, which is a drain on resources and a distraction from the vital task of aiding those in need.”
“The State’s continued vigilance against Sandy fraud demonstrates that we won’t stand for this reprehensible behavior,” said DCA Commissioner Charles A. Richman. “As such, my Department remains as committed as ever to working with our law enforcement partners to catch anyone who misuses our Sandy recovery programs.”
The new cases were investigated by detectives of the New Jersey Division of Criminal Justice and special agents and inspectors of the U.S. Department of Homeland Security Office of Inspector General, HUD Office of Inspector General, SBA Office of Inspector General, HHS Office of Inspector General and U.S. Postal Inspection Service. The National Insurance Crime Bureau assisted. Deputy Attorneys General Peter Gallagher, Valerie Noto, and Denise Grugan are prosecuting the 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. Lt. David Nolan and Sgt. Fred Weidman conducted and coordinated the investigations for the Division of Criminal Justice, with others, including Special Civil Investigators Rita Binn and James Parolski.
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 prison and a fine of up to $15,000, while 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 $31,900 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 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, SBA 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.
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.
For Avena: Marc Liebman, Esq., of Kaufman, Semerano & Liebman, LLP, Fort Lee, N.J.
For Tuohy and Benzoni: James P. Brady, Esq., of Toms River, N.J.
For Belotta: Vincent C. Scoca, Esq., of Bloomfield, N.J.