10300593 - house of dollars on a gray background

In 2012, Superstorm Sandy was one of the most destructive hurricanes to ever blow up the Atlantic coastline, ultimately causing an estimated $65 billion in damage. The second most-costly hurricane in U.S. history also opened the floodgates for fraudsters to take advantage of the Federal Emergency Management Agency’s (FEMA) Transitional Shelter Assistance (TSA) program. Today’s ”Fraud of the Day” focuses on the owner of a New Jersey motel who attempted to steal tens of thousands of dollars in disaster relief funds he did qualify for nor deserve.

FEMA’s TSA program provides evacuees with short-term lodging assistance when they are unable to return home following a disaster due to inaccessibility or uninhabitable conditions. If eligible, disaster survivors are allowed to stay in a hotel or motel for a limited amount of time and FEMA will cover the room and taxes associated with their stay. (Incidental charges, room service and pay-per-view binges are not allowed.)

A New Jersey motel owner got into trouble after fraudulently obtaining more than $80,000 from the TSA program. His scam involved billing FEMA for 11 individuals, but in reality only three of them actually stayed at the motel. (FEMA paid the motel owner $133.28 per day for each room occupied by the storm victims.)

The motel owner also fraudulently billed the disaster relief program for stays of multiple weeks or months, when that didn’t really happen. Then he tried to use the names of relatives who lived in the area, but were not displaced by the storm to submit claims worth more than $50,000. (This fraudster must have mistakenly believed that FEMA was in the business of paying for staycations.)

The 44-year-old motel owner pleaded guilty to theft by deception and was sentenced to three years in prison for fraudulently claiming that his establishment temporarily housed Superstorm Sandy victims. He has already paid full restitution of $81,567.

FEMA’s TSA program is intended to provide relief funds for disaster victims, not become a source of additional income for fraudsters trying to make some easy money. While Superstorm Sandy may have led criminals to believe that it opened the floodgates to steal undeserved government funds; however, the Justice system has definitely slammed the jail cell door shut on this fraudster and many others. (It looks like he’ll be spending the next three years on a different type of staycation.)

Source: Today’s ”Fraud of the Day” is based on an article entitled, ”Toms River Motel Owner gets 3-Year Term in $81,000 Sandy Fraud,” published by the Toms River Patch on November 4, 2016.

TOMS RIVER, NJ — The owner of a Toms River motel has been sentenced to three years in prison for stealing more than $81,000 in FEMA funds by fraudulently claiming the motel temporarily housed victims of Superstorm Sandy, Attorney General Christopher S. Porrino said Friday.

Sandipkumar Patel, 44, of Edison, who pleaded guilty on Sept. 26 to a second-degree charge of theft by deception, was sentenced by Superior Court Judge Wendel E. Daniels in Ocean County, Porrino said.

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.