N.J. Authorities Form Clearinghouse for Investigating, Prosecuting Sandy Fraud

March 12, 2013

New Jersey Attorney General Jeffrey Chiesa announced the creation of a “Statewide Sandy Fraud Working Group” to serve as New Jersey’s clearinghouse for investigations and prosecution of criminal and civil fraud related to Superstorm Sandy and the disaster recovery process.

The working group consists of representatives from the State Division of Criminal Justice, State Division of Consumer Affairs, State Office of the Insurance Fraud Prosecutor, New Jersey State Police, and the Atlantic, Middlesex, Monmouth, and Ocean County Prosecutor’s Offices.

Going forward, the working group will coordinate all investigative and enforcement efforts at the state, county, and local levels to ensure all cases are referred and prosecuted as efficiently and effectively as possible.

“Though most New Jerseyans responded to Superstorm Sandy with resilience and generosity, some individuals unfortunately are motivated by the desire to take advantage of the misfortune of others. Such abuse will not be tolerated,” Attorney General Chiesa said.

“We have formed the Statewide Sandy Fraud Working Group to coordinate the efforts of the primary law enforcement and investigative agencies, criminal and civil, state and local, with a stake in this fight. Victims or witnesses of fraud should contact the working group directly with tips and complaints. We will ensure that all information is acted on by the appropriate agency, that all necessary information is shared across jurisdictional lines, and that all appropriate charges are brought.”

Victims or witnesses of fraud committed in the aftermath of Sandy — including but not limited to home repair fraud, insurance fraud, and fraudulent charitable solicitations — can contact New Jersey’s Statewide Sandy Fraud Working Group at 855-SANDY39 (855-726-3939) or www.StopSandyFraud.org.

Attorney General Chiesa said the Statewide Sandy Fraud Working Group will coordinate with the State Comptroller’s Office, which recently launched a Sandy Transparency website, allowing the public to track state contracts and expenditures involving federal Sandy-related funding.

“We have formed this Working Group to make sure that all citizen complaints relating to Superstorm Sandy are acted on promptly and efficiently,” said Elie Honig, Director of the New Jersey Division of Criminal Justice. “We will relentlessly pursue any instance of Sandy-related fraud, and we will not hesitate to bring criminal charges where appropriate.”

The State Division of Consumer Affairs noted that consumer complaints related to Sandy – 2,164 in only two months – were the top complaint category in 2012. Last year’s second-highest complaint category was “Home Improvements,” which generated 1,528 consumer complaints during the entire 12 months. Attorney General Chiesa said home improvement-related complaints are expected to increase throughout the long post-Sandy recovery period.

During the next few weeks, the Statewide Sandy Fraud Working Group is scheduled to begin a public outreach campaign including public service announcements, billboards and transit ads, advising any fraud victims or witnesses to contact the Working Group with tips or complaints.

Examples of some actions already taken by the Attorney General’s Office in the wake of Superstorm Sandy include:

Price gouging investigations and lawsuits: The Attorney General filed lawsuits against a total of 24 hotels and gas stations accused of violating New Jersey’s price gouging law by increasing their prices excessively during the state of emergency.

Communication in the field with home improvement contractors: The Division of Consumer Affairs assigned investigators to scour the hardest-hit areas of Atlantic, Monmouth, and Ocean counties, and speak directly with home improvement contractors working to rebuild homes in those areas. The investigative team also attends home shows in order to meet and interact with contractors. To date, the team has had direct contact with a total of 668 contractors. The investigators remind the contractors of the need to register with the Division of Consumer Affairs and comply with the Consumer Fraud Act and all other applicable laws and regulations. Since Sandy, the Division received registration applications from 3,440 home improvement contractors, an 89 percent increase over the same period last year. Any contractors who fail to register will face notices of violation and civil penalties.

Ensuring the integrity of charities: The Attorney General filed suit on Feb. 21 against an allegedly deceptive Superstorm Sandy Charity for numerous violations of the state’s charities law. The Division of Consumer Affairs also issued warnings to more than two dozen newly created groups that appear to be soliciting donations in the name of Sandy victims, and is monitoring their activities to ensure compliance with New Jersey’s Charities Registration and Investigation Act, and the Consumer Fraud Act.

Protecting against an allegedly fraudulent “Superstorm Sandy Reconstruction Summit.” The Attorney General filed suit successfully blocking this event, alleging that the organizer falsely implied that he and his summit were affiliated or endorsed by federal, state, or local government agencies, and that he engaged in misleading advertising. As noted in the lawsuit, the organizer’s background includes a personal bankruptcy filing that was opposed by the U.S. Bankruptcy Trustee due to alleged fraud, and approximately 20 outstanding judgments, many stemming from supposed post-disaster “summits” he held in other states.

Consumer resource on flood-damaged vehicles: The Division of Consumer Affairs partnered with the New Jersey Motor Vehicle Commission to create an easily searchable database, at www.NJConsumerAffairs.gov/floodedcars, of more than 13,000 vehicles that have been processed by the Motor Vehicle Commission as either flood-titled or salvage-titled since Sandy made landfall.

Ongoing alerts and outreach to consumers, including 14 consumer education seminars reaching more than 1,000 individuals in Sandy-affected areas.

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