New Jersey Commemorates Two Years of Fighting Sandy Fraud In Monmouth County, Elsewhere

Acting Attorney General John J. Hoffman, the Division of Consumer Affairs, and the Division of Criminal Justice this past week commemorated two years of investigating and prosecuting alleged fraud related to the aftermath of Superstorm Sandy

In a release they noted that the attorney general’s Statewide Sandy Fraud Working Group continues to watch for financial exploitation related to ongoing post-storm recovery efforts.

“Immediately upon Sandy’s landfall, including the first two days while the Division of Consumer Affairs headquarters was without electricity or phone service – our investigation and legal teams immediately jumped into action in response to unprecedented numbers of consumer complaints about illegal price-gouging,” Acting Attorney General Hoffman said.

“Today our focus has expanded to all aspects of fraud, especially financial and home improvement fraud, where shameless individuals have attempted to take advantage of those made so vulnerable by this tragic event and have forced us to divert resources away from those most deserving of aid to track down conscienceless thieves and fraudsters.”

The Division of Criminal Justice continues to chair the Attorney General’s Statewide Sandy Fraud Working Group, which coordinates investigations and prosecutions statewide among the Division of Criminal Justice itself as well as the Division of Consumer Affairs, the New Jersey State Police, the Monmouth, Ocean, Atlantic, and Middlesex County Prosecutors, and other law enforcement agencies.

The Division of Criminal Justice says it has filed criminal charges in 20 fraud cases related to Superstorm Sandy, and has coordinated charges with other agencies in more than 75 cases statewide. Its criminal investigations remain active and ongoing.

The Division of Consumer Affairs says it has filed 28 lawsuits against businesses accused of price gouging, and has settled 27 of those cases, obtaining more than $1 million in civil penalties, consumer restitution, and reimbursement of the Division’s costs.

So far this year, the Division of Consumer Affairs has issued Notices of Violation to a total of 95 home improvement contractors seeking, among other things, more than $1.2 million in restitution to consumers, many of whom are in Sandy-affected areas.

Acting Director Steve Lee of the Division of Consumer Affairs said, “Just as we have been unflagging in our prosecution of alleged price-gougers, the Division of Consumer Affairs remains focused on preventing and investigating home improvement fraud and other scams while New Jersey continues its recovery.”

Sandy Recovery Fraud

The Division of Criminal Justice has filed criminal charges against 16 individuals after they allegedly filed for relief funds to which they were not entitled.

In one case, two individuals allegedly filed fraudulent Federal Emergency Management Agency (FEMA) applications for rental assistance. The defendants claimed they were forced to relocate to a rental home because their primary residence was damaged following Tropical Storm Irene and Superstorm Sandy.

In another application they allegedly applied using the name of a relative, whom they falsely claimed was forced to relocate due to Sandy. In reality, the couple and the relative were never forced to relocate. Fraudulent leases and rental receipts were submitted to support their allegedly bogus claims. The two individuals obtained more than $33,000 in rental assistance from FEMA.

In another case, a man allegedly claimed his Ortley Beach home as his primary residence when in fact it was his vacation home and thus not eligible for relief assistance. This individual obtained $116,900 in federal and state funding.

In addition, the Division of Criminal Justice in October 2013 obtained a guilty plea from a Metuchen con artist who preyed on victims of Superstorm Sandy. David Scott Ruddy, 33, promised victims low-cost housing or cars and instead stole their money, defrauding them and others of approximately $55,000.

An investigation by the Woodbridge Police Department, the Middlesex County Prosecutor’s Office, and the Division of Criminal Justice revealed that Ruddy visited temporary shelters after Sandy, impersonating a Red Cross worker or law enforcement officer who was there to help, according to the attorney general’s ofice.

After gaining the trust of Sandy victims, he offered to rent or sell them low-cost apartments, condos or houses that he claimed to own or control. He also offered low-cost cars he said he bought at police auctions. Ruddy fraudulently collected payments from the victims but did not deliver the promised housing or cars. In November 2013, Ruddy was sentenced to five years in state prison and ordered to pay restitution to all of his victims.