Fraud Cases Popping Up in New Jersey Four Years After Sandy

Fraud Cases Popping Up in New Jersey Four Years After Sandy – By Kate King, The Wall Street Journal

New Jersey officials are still addressing a flood of fraud complaints related to superstorm Sandy four years after it slammed ashore.

Prosecutors are investigating or have filed criminal charges in 161 cases involving more than $15 million in alleged fraud stemming from the storm, according to the state attorney general’s office and prosecutors in Ocean County, one of the counties hit hardest by the storm.
More than a third of the criminal charges brought by state prosecutors were filed in 2016, records show.
Many of the investigations have focused on building contractors accused of cheating their customers. But hotel operators, car dealers and homeowners also have been charged with stealing disaster relief money and other crimes.
In September, the owner of an Ocean County motel pleaded guilty to falsely claiming that he had sheltered Sandy victims to get $81,000 in federal funds. In 2014, an operator of a used-car dealership in Middlesex County was sentenced to three years in state prison after pleading guilty to securing fraudulent vehicle titles to sell cars damaged by Sandy to unsuspecting customers. The state has also filed charges against residents accused of improperly claiming disaster funding.

“We’ve getting new victims every day,” said Sgt. Mark Malinowski, who runs an economic-crimes unit for the Ocean County Prosecutor’s Office. “I have a feeling that this is something that’s not going to go away, at least in Ocean County.”
In addition to criminal cases, New Jersey officials have issued $1.5 million in civil penalties and restitution claims against 46 people and companies, mainly for hotel and gas price gouging.
Another $1.8 million in civil claims have been assessed against 135 home-improvement contractors accused of performing shoddy or incomplete work in the hardest-hit counties.
The cases prosecuted by the state involve more than $3.5 million in alleged fraud. Although small compared with fraud investigations typically handled by the state, the nature of the crimes calls for prosecution at the highest level, said Attorney General Christopher Porrino.
“When you’re preying on people who have already been displaced from their homes and disadvantaged, it’s particularly troublesome and egregious, so we’ve been very aggressive,” he said. “We’re literally making examples of people for the purposes of deterring this kind of conduct.”

Sandy wrecked more than 40,000 New Jersey homes and caused an estimated $37 billion in damage. Government agencies awarded more than $8 billion to help residents and businesses in the state rebuild. The Federal Emergency Management Agency, which has approved $4.5 billion of the $8 billion in disaster relief and recovery assistance, usually works with state attorney-general offices to prosecute fraud, spokesman Rafael Lemaitre said.
New Jersey officials have allocated $4.2 billion in federal Sandy recovery funding. As of Oct. 17, $2.7 billion had been awarded to homeowners, businesses and public programs.
New batches of fraud complaints seem to follow each new round of recovery grants that is distributed, Sgt. Malinowski said.
Unscrupulous builders note when a large amount of public funding is released, and homeowners, eager to begin repairs and flush with government cash, don’t always do their due diligence. Some residents appear to have been defrauded by multiple contractors.
“You have people who’ve lost everything,” Sgt. Malinowski said. “And now they’ve lost it twice.”
In Ocean County, local and county authorities have filed charges or are investigating cases involving more than $11.9 million in alleged fraud related to Sandy. County prosecutors have conducted dozens of investigations involving more than 150 victims.
Little Egg Harbor resident Chuck Griffin, who lives on a lagoon and whose house was flooded with 40 inches of water during the storm, still isn’t home four years later. The delay came about in part because the local contractor he hired to fix and elevate his house allegedly pocketed Mr. Griffin’s $55,000 initial payment, disconnected the utilities and disappeared.
The contractor, Jeffrey Colmyer, was arrested along with his partner, Tiffany Cimino, earlier this month and charged by the state attorney general with defrauding Mr. Griffin and two dozen other homeowners of more than $377,000. Prosecutors, who are still investigating the case, have accused Mr. Colmyer and Ms. Cimino of using customers’ money to buy luxury items, including a $17,000 diamond ring, and gamble in nearby Atlantic City.
Ms. Cimino’s attorney didn’t return calls for comment. Mr. Colmyer, 41 years old, doesn’t have an attorney, state officials said.
Mr. Griffin, 70, a retired nurse, has owned his 860-square-foot home since the mid-1980s. He met with a builder this month and hopes to be back in his home by May.
Mr. Griffin said that Mr. Colmyer’s alleged crimes delayed his rebuilding by nearly two years and pitched him into a paperwork and bureaucratic nightmare. “You can understand why people walked away,” he said.