Attorney General Christopher S. Porrino announced that nine additional individuals have been charged criminally 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 71 people for allegedly engaging in this type of fraud, including the nine individuals charged today.
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 many cases, they also applied for funds from a Sandy relief program funded by HUD, low-interest disaster loans from the SBA, or assistance provided by the New Jersey Department of Human Services. The HUD funds are administered in New Jersey by the Department of Community Affairs.
In addition, one of the new cases involves a motel owner who allegedly fraudulently stole more than $80,000 in funds from a program in which FEMA directly paid hotels and motels for housing residents displaced by Superstorm Sandy.
“We charge that these defendants stole from disaster relief programs and by extension from the victims who were hardest hit by the storm,” said Attorney General Porrino. “We’ll continue to charge every cheat we identify who diverted funds from these recovery programs and from victims in need.”
The following defendants were charged on Thursday, Aug. 18, by complaint-summons:
Jerry Gustoso II, 44, of Hoboken, N.J., allegedly filed fraudulent applications following Superstorm Sandy for FEMA assistance, a low-interest SBA disaster-relief loan, and state grants under the Homeowner Resettlement Program (RSP) and the Sandy Homeowner and Renter Assistance Program (SHRAP) funded by the New Jersey Department of Human Services. As a result, he received a total of approximately $213,234 in relief funds. It is alleged that Gustoso falsely claimed in his applications that a home he owns on Cedar Run Road in Bayville, N.J., which was damaged by Superstorm Sandy was his primary residence at the time Sandy struck. It is alleged that, in fact, his primary residence was in Hoboken, and the Bayville home was a seasonal vacation home. As a result of the alleged fraudulent applications, Gustoso received $2,270 from FEMA, $186,800 in SBA loan proceeds, a $10,000 RSP grant, and SHRAP funds totaling $14,164. Gustoso is charged with second-degree theft by deception and fourth-degree unsworn falsification.
These five related defendants are each charged with third-degree theft by deception for filing fraudulent applications for assistance after Superstorm Sandy: Debra Reddick, 58, of Newark, her son and daughter, Thomas Jamar Reddick, 34 of Newark, and Lateefah Reddick, 38, of East Orange, Debra Reddick’s niece Neima Jones, 32 of East Orange, and another relative of Debra Reddick, Kevin Osborne, 55, of Newark. Thomas Jamar Reddick, who also is charged with fourth-degree unsworn falsification, allegedly obtained FEMA assistance of $4,232 and a state grant of $10,000 under the Homeowner Resettlement Program (RSP) by fraudulently claiming that a storm-damaged property he owns on North 4th Street in Newark was his primary residence at the time of the storm, when in fact he was living in Hillside, N.J. Each of the other defendants allegedly stole relief funds by submitting fraudulent applications under the Sandy Homeowner and Renter Assistance Program (SHRAP) funded by the New Jersey Department of Human Services. In each case, those defendants allegedly submitted fraudulent lease documents – and, in some cases, fraudulent bills for rent or utilities – in order to receive funds as renters of storm-damaged properties, when it is alleged that either the defendant was not paying rent for the property, the defendant was not renting the property from the landlord listed, the property was not damaged, the defendant did not live at the address given, or a combination of those facts. It is alleged that Debra Reddick fraudulently received $4,330 in SHRAP funds, Lateefah Reddick received $7,629, Jones received $6,556, and Osborne received $6,016.
Michael J. Casey, 51, of Point Pleasant, 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, he received a $10,000 RSP grant. In addition, as a result of the alleged false applications, he was awarded $77,000 in RREM monies and a $2,270 FEMA grant.
The RREM and FEMA funds were never disbursed, but Casey is charged with attempted theft in connection with those amounts. Casey allegedly falsely claimed in his applications that a home he owns on Parkway Avenue in Point Pleasant which was damaged by Superstorm Sandy was his primary residence when Sandy struck. In fact, his primary residence at the time allegedly was a second property he owns on Harvard Avenue in Point Pleasant. The property on Parkway Avenue was dilapidated and deserted prior to the storm, and it did not have any utilities. Casey allegedly also fraudulently submitted a lease and rental receipts indicating that he paid rent to live with his mother in New Brunswick after being displaced by the storm. It is alleged that, in fact, he did not pay rent to his mother. Casey is charged with second-degree attempted theft by deception, third-degree theft by deception and fourth-degree unsworn falsification.
Judith McMahon, 47, of Manahawkin, N.J., allegedly fraudulently obtained a total of $18,292 by filing false applications following Superstorm Sandy for FEMA assistance. McMahon allegedly submitted a false lease indicating that she was paying more than $1,500 per month for a property in Neavitt, Maryland, that she purportedly leased after being displaced by the storm. In fact, she had been renting that property in Maryland since 2010. It is alleged that McMahon falsely identified the landlord in the lease she submitted, and she also submitted fraudulent rental receipts purportedly issued by the person she identified as the landlord. She allegedly received four separate payments from FEMA for rental assistance totaling $18,292 as a result of the fraudulent documents she submitted. McMahon is charged with third-degree theft by deception.
An additional defendant was charged by complaint-summons on July 13:
Sandipkumar Patel, 43, of Edison, N.J., allegedly fraudulently obtained more than $81,567 from the FEMA Transitional Shelter Assistance (TSA) program. Under the TSA program, FEMA directly paid participating hotels and motels for rooms temporarily occupied by residents displaced by the storm. Patel owns the American Motel on Route 166 in Toms River, N.J., with his wife. FEMA paid the motel $133.28 per day for each room occupied by storm victims. It is alleged that Patel fraudulently billed FEMA a total of $81,567 in the names of 11 individuals.
Eight of the individuals allegedly never stayed at the motel at all, while the other three allegedly stayed for shorter periods or, in one case, shared a room that Patel already had billed to FEMA in the name of the other occupant. In some cases, Patel allegedly falsely billed for stays of multiple weeks or even months. He allegedly billed FEMA more than $50,000 in the names of several of his personal relatives who live in New Jersey but who were not displaced by the storm. Patel is charged with second-degree theft by deception.
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 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.