ATTORNEY GENERAL’S OFFICE CHARGES FOUR MORE INDIVIDUALS WITH

FILING FALSE APPLICATIONS FOR SUPERSTORM SANDY RELIEF FUNDS

AG’s Office has charged 116 defendants in historic anti-fraud program with state & federal partners

TRENTON – Attorney General Gurbir S. Grewal today announced that the Attorney General’s Office and its state and federal partners have charged four new defendants with filing fraudulent applications for federal relief funds related to Superstorm Sandy, bringing the total number of defendants charged by the office in these cases to 116 since March 2014.

“Any fraud against public assistance programs is deplorable, but these thefts were especially egregious because they diverted funds intended for victims left homeless by one of the most devastating storms in New Jersey history,” said Attorney General Grewal. “We have recovered over $2.2 million through these prosecutions and we also have sent a strong message that should deter this type of fraud during future disaster relief efforts.”

The 116 people charged by the Attorney General’s Office were allegedly responsible for diverting more than $7 million in relief funds.  The 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 four defendants were charged today by complaint-summons:

·         Brian J. Kotowich, 57, of Beach Haven, N.J., allegedly filed fraudulent applications following Superstorm Sandy for FEMA assistance and state grants under the Reconstruction, Rehabilitation, Elevation and Mitigation (RREM) Program.  As a result, he allegedly received approximately $187,881 in relief funds to which he was not entitled. Kotowich allegedly falsely claimed in his applications that a home he owns on West Connecticut Avenue in Beach Haven, 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 Langhorne, Pa.  Kotowich has since moved to the house in Beach Haven, but at the time of the storm, it allegedly was an investment property that was largely unoccupied.  As a result of the alleged fraudulent applications, Kotowich received $27,033 from FEMA and a total of $160,848 in RREM grant funds.  Kotowich is charged with second-degree theft by deception.

·         Charles Licastro, 64, Pine Brook, 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 allegedly received a total of approximately $183,870 in relief funds to which he was not entitled.  It is alleged that Licastro falsely claimed in his applications that a home he owns on Boat Point Drive in Point Pleasant, 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 at the time of the storm was in Pine Brook, N.J., and the house in Point Pleasant was a seasonal/weekend property.  As a result of the alleged fraudulent applications, Licastro received approximately $23,870 from FEMA, $150,000 in RREM grant funds, and a $10,000 RSP grant.  Licastro is charged with second-degree theft by deception.

·         Anthony Novello, 63, of Forked River, 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 Reconstruction, Rehabilitation, Elevation and Mitigation (RREM) Program.  As a result, he allegedly received a total of approximately $169,334 in relief funds to which he was not entitled.  It is alleged that Novello falsely claimed in his applications that a home he owns on Riverview Drive in Forked River, N.J., which was damaged by Superstorm Sandy was his primary residence at the time Sandy struck.  In fact, his primary residence at the time of the storm was in Clark, N.J.  Novello has since moved to the house in Forked River, but at the time of the storm, it allegedly was a seasonal/weekend property.  As a result of the alleged fraudulent applications, he received $2,820 from FEMA, $13,100 in SBA loan proceeds, a $10,000 RSP grant, and a total of $143,414 in RREM grant funds.  Novello is charged with second-degree theft by deception.

·         Thomas Aquilino, 56, of Yonkers, N.Y., allegedly fraudulently obtained a total of $150,000 by filing false applications following Superstorm Sandy for state assistance under the Reconstruction, Rehabilitation, Elevation and Mitigation (RREM) Program.  It is alleged that Aquilino falsely claimed that a storm-damaged property he owns on Baltimore Avenue in Point Pleasant, N.J., was his primary residence at the time Sandy hit.  It is alleged that, in reality, his primary residence at the time of the storm was in Yonkers, N.Y., and the Point Pleasant house was a seasonal/weekend property.  Aquilino received a total of $150,000 in RREM grant payments to repair the Point Pleasant property.  Aquilino is charged with second-degree theft by deception.

“In order to repair vacation or investment properties, these defendants allegedly stole funds that were strictly intended for victims who needed to rebuild or restore their primary homes,” said Director Veronica Allende of the Division of Criminal Justice. “While many generously helped others after the storm, these property owners allegedly helped themselves.”

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, and U.S. Postal Inspection Service.  The National Insurance Crime Bureau assisted.  Deputy Attorneys General Valerie A. Noto and Supriya Prasad are prosecuting the new defendants under the supervision of Deputy Attorney General Mark Kurzawa, Deputy Chief of the Financial & Computer Crimes Bureau.  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, James Parolski and Vicki Vreeland.

Second-degree charges carry a sentence of five to 10 years in state prison and a fine of up to $150,000.  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.

Defense Attorneys:

For Kotowich: Stephen McGuckin, Esq., Toms River, N.J.

For Licastro: John Roberts, Esq., Arseneault & Fassett, LLP, Chatham, N.J.

For Novello: Undetermined.

For Aquilino: Edward Bertucio, Esq., Hobbie Corrigan & Bertucio, PC, Eatontown, N.J.