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05 Jun 2016

Millions of Tax Dollars Lost in Sandy Fraud- Mark Di Ionno

“The money came and the money went, and nobody was watching.

Now, it’s a police problem.

That is the abridged version of the hurricane-related contractor fraud that has left thousands of homeowners stuck in the “disaster after the disaster” known as the Sandy recovery.

No place is it worse than sprawling Ocean County, where the storm left the most damage over the largest area.

“The government wanted to get recovery money into the hands of the people who were devastated as quickly as possible,” said Ocean County Prosecutor Joseph D. Coronato. “Unfortunately, there are people out there taking advantage of other people’s misery. They were victimized a second time.”

Coronato’s office has already secured 49 indictments involving Sandy-related fraud, and there are another 50 active investigations. Several small cases were previously adjudicated through restitution or the pretrial intervention, Coronato said, but the bigger cases are now being lined up for trials or pleas.

And while those numbers don’t seem staggering, the contractors are alleged to each have victimized an average of four to five homeowners. Several are accused of defrauding 20 to 30 clients. When you do the math, that’s thousands of people left holding the bag – a bag of empty promises and emptied of cash.

That’s just in Ocean County – it doesn’t even include another hundred or so cases in that are being handled by local police in the county.

Contractors under investigation Ocean County have allegedly walked away with over $5 million.”

MORERecent Mark Di Ionno columns

“We only take the cases that are multi-jurisdictional or if the fraud exceeds $75,000,” said Sgt. Mark Malinowski, who heads the county prosecutor’s office economic crimes unit, where cops with business degrees do the painstaking forensic accounting to build cases against people who made the recovery money disappear.

In short, the county only goes after the serial crooks. The small-time complaints get dealt with locally.

And the cases keep coming.

“Every time there is a new round of (recovery) funding, we get more complaints,” Malinowski said. “This isn’t going away anytime soon.”

The county has six investigators in the economic crimes unit and all have business or accounting degrees. They’ve all passed the Certified Fraud Examiners test – a 500-question marathon on how to detect slipshod financing and uncover shell-game bank accounts. There is also a required, yearly 20-hour continuing education program.

“It’s all about the education,” Coronato said. “This helps us track down drug money and financial schemes.”

But 50 percent of the unit’s work is now Sandy-related, Malinowski said. After fielding complaints, the detectives interview the homeowners and then the paper chase is on. The necessary act of discovering, subpoenaing and obtaining contractor bank records takes months, especially since many operate several LLCs.

Malinowski estimates the indicted contractors and those under investigation, have allegedly walked away with over $5 million.

Ocean County’s 15-mile barrier island, which stretches from Point Pleasant Beach to Island Beach State Park, provided the storm’s most unforgettable images. The Seaside Heights roller coaster in the ocean. The cedar-sided Mantoloking beach house in the bay. Ortley Beach homes scattered like Monopoly pieces.

But along the western front of the Barnegat Bay – and those uncounted miles of lagoons and bay inlets – the damage, while not as photogenic, was equally devastating.

Of the 40,500 homes rendered uninhabitable by the storm statewide, about half were in Ocean County. (The often-repeated number of 346,000 homes damaged by the storm is based on all insurance claims, major and minor.)

Towns that front the bay and beach rolled up staggering numbers of destroyed homes: Toms River (898), Brick (744). But towns with bay-only shorelines also were hit hard: Lacey (652), Ocean (499), Egg Harbor (349) and Stafford (307) were all swamped by the tidal surge in the bay.

The next surge was home repair contractors from across the state and the country, riding the waves of available money.

First, it was quick insurance payouts, or cashed-in investments or savings that homeowners used to get back home.

Then, it was the $2 billion in state and federal grants and loans to repair and elevate homes — and those are tax dollars — and that money keeps on coming. That’s what Malinowski means when he says every new round of financing brings new cases.

The state’s Rehabilitation, Reconstruction, Elevation and Mitigation (RREM) program has disbursed $945,833,994 to date. Recovery funds for multifamily and rental units total $151,391,198, and the $10,000 resettlement grants total $202,572,814 to date. The money keeps coming and the fraud keeps following.

In most cases, the homeowner receives a sizable check to get work started. And that’s where the problems begin.

“We have safeguards in place, but we can’t watch every dollar,” said Lisa Ryan, spokeswoman for the state Department of Community Affairs, which has handled the Sandy recovery.

“If a homeowner believes they have been defrauded by a contractor, they should immediately file a complaint with the NJ Division of Consumer Affairs,” she said. The consumer affairs number is (973) 504-6200 and the website is

Ryan said the state has held several homeowner seminars on how to avoid fraud and has a webpage dedicated to it at

But despite the warnings, people with hot cash in hand – and desperate to get back home – are bait in a shark tank.

“The checks are made out to the homeowner,” said Bill Scharfenberg, the Ocean County first assistant prosecutor handling the fraud cases. “They deposit the money in their accounts and are free to disburse it the way they want. They believe the contractors are bonded and state-approved. Some are, some are not.”

Coronato and Scharfenberg said some of the fraud is purposeful and some is not.

“We have guys who come in with low bids and run out of money,” Coronato said. “They take (money) from one job to finish another. Pretty soon, they can’t catch up.”

But, Scharfenberg added, “We’ve seen some money going into their lifestyles … new cars … vacations.”

Mary Lou Mickiewicz, of South Amboy, handed over $117,000 in RREM money to a contractor last year because she was already worn down from the process of filing insurance claims, dealing with FEMA paperwork and moving several times.

“He said he would take care of everything for me, all the paperwork, all the taxes, everything. So I trusted him,” she said.

She lives in Middlesex, but her case is being handled in Ocean County because the contractor is under investigation there, too, for disappearing on people such as Patty LaCourt of Lavalette.

“He talked a good game,” said LaCourt, who gave the same builder $110,000 to finish a job already started by another contractor who LaCourt said “wrecked my house.”

Joseph Ready, whose home in Union Beach is still unfinished, said his state-approved contractor kept asking for more to complete the job.

“What do you do? They said they ran out of money,” said Ready, whose $130,000 grant is gone. “So I gave them more. All I wanted was to get back home.”

Mark Di Ionno may be reached at Follow The Star-Ledger on Twitter @StarLedger and find us on Facebook.” 

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30 May 2016

Sandy is not over!

13102874_655078321308360_7798207268510438153_n “Oh, Sandy is STILL a thing?” “Isn’t recovery over…it’s been more than three years…” Everyone involved in the Sandy recovery process has heard these phrases casually uttered by our community members, friends or even family. Unfortunately, the majority of our country believes that Superstorm Sandy is nothing more than a distant memory. In fact, awareness about the struggles of survivors faded with the news cycle and made it challenging to help the thousands affected by the storm.

It is our goal to reignite widespread interest in Sandy recovery and highlight the continuing needs of our community. We encourage you to speak to the people in your life and remind them that Sandy is very much a current problem. Education is the key to lasting change and we believe all our followers have the power to enact that change!

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27 May 2016

FEMA to overhaul flood insurance program after Sandy complaints


WASHINGTON — The Federal Emergency Management Agency on Monday said it would make changes to the flood insurance program following revelations that the private companies that handle claims have been shortchanging Hurricane Sandy homeowners.

The agency said it would take control of the appeals process, as it has done with the Sandy homeowners who felt they were lowballed by their insurers, and would have the power to review the legal fees and arguments used by the private companies when they are sued for denying claims.

Currently, the companies basically have carte blanche when it comes to their legal expenses, which are picked up by taxpayers.

“We need ensure that you have a process to get a fair resolution,”  said Roy Wright, FEMA’s deputy associate administrator for insurance and mitigation.

In addition, FEMA proposed changing the rules governing the flood insurance program to make it easier for the agency to renegotiate its arrangements with the private companies that handle claims. The current rules date to the 1980s and were last updated in 1999.

“There were plenty of problems we came across that we were under the constraints of the existing regulations,” Wright said. “This gives us the flexibility to address the needs of policyholders and to ensure that we’re getting the greatest value from the companies.”

Is FEMA still shortchanging Hurricane Sandy homeowners?

Is FEMA still shortchanging Hurricane Sandy homeowners?

Rep. Tom MacArthur wants a House committee to investigate following charges leveled by FEMA subcontractors.

FEMA’s actions come after the agency had been criticized by New Jersey lawmakers for failing to ensure that Sandy victims were properly compensated for their losses. Insurance companies or their engineering firms reportedly adjusted inspection reports to avoid paying full damage claims.

In response to those reports, FEMA agreed to reopen the claims process for almost 142,000 Sandy homeowners. To date, more than $58 million in additional funds have been paid to Sandy homeowners who asked the agency to reconsider their claims.

Even now, there are questions as to whether the Sandy victims are being properly compensated. Rep. Tom MacArthur (R-3rd Dist.) last month released affidavits from three former employees of a FEMA subcontractor claiming that they were told to use a formula based on a structure’s square footage and its construction to decide how much money a homeowner was entitled to, not review actual damage reports.

In a separate announcement, the agency agreed that homeowners facing financial hardship who want to appeal their extra payments can get their initial award while waiting to see if they will receive any additional money. Currently, they would not get any money until the entire appeals process is completed.

“This should not be a game of ‘Let’s Make a Deal’ where Sandy victims are forced to choose between their initial offer and what’s behind door No. 2,” said U.S. Sen. Robert Menendez (D-N.J.), who led the effort to get FEMA to reopen the Sandy claims. “I am pleased that FEMA has fixed this injustice and I will continue to hold their feet to the fire until every Sandy survivor recovers.”

Jonathan D. Salant may be reached at Follow him on Twitter @JDSalant. Find Politics on Facebook.

Jonathan D. Salant | NJ Advance Media for NJ.comBy Jonathan D. Salant | NJ Advance Media for 
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on May 23, 2016 at 12:55 PM

25 May 2016

Flood insurance claims never paid fairly from the start

“Our flood insurance claims were never paid fairly from the start” says our Executive Director, Sue Marticek. “Therefore, our entire recovery was cut off by the knees by the non-payment to our homeowners from their flood insurance claims.” Click for more information:

22 May 2016

Whistle blower says Sandy review is “a sham”

Sandy whistle blowers: “We received instruction not to conduct a comprehensive evaluation of claims and we were directed to tailor evaluations to fail within a range even if we identify additional covered damage.” Listen to the words of Jeff Coolidge, FEMA flood certified claims adjuster, who says The Sandy Review process is “a sham.” Watch him speak below:

20 May 2016

Rebuilt Sandy-damaged home wrecked again

 – A house in Babylon, Long Island, that was badly-damaged by Superstorm Sandy has been wrecked once again. An effort to make the home flood-proof went terribly wrong.

The home collapsed at about 9 p.m. Tuesday. The house was sitting on blocks for the last 6 weeks waiting to be raised. The home owner says this Friday work was going to resume.

Randy Stewart has lived in this waterfront home on yacht club road for years. No one was occupying the home since it was in the process of being raised permanently. Stewart was in the backyard and saw with his own eyes as the home he lived in for 19 years suddenly collapsed.

The town of Babylon took the house off the cribbing on Wednesday afternoon.

Stewart’s house was damaged by Superstorm Sandy in 2012. He rebuilt back then, but after spending money to fix up the damage, FEMA mandated that he raise it in order to avoid water damage in case of a future storm.

But Stewart said the work was delayed because he was waiting on government grants. He blames New York Rising for the collapse of his home.

Fox 5 news reached out to New York Rising, which told us it is not to blame. It stated that it sent Stewart $163,000 so far, of which $113,000 was to elevate his home.

However, Stewart said he has put a lot of his own money into his home, and insisted he used his own money to raise the house.

Stewart said he plans on rebuilding.

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19 May 2016

Springsteen lends song to Sandy fundraising

“TOMS RIVER – Drawing inspiration from Bruce Springsteen’s song, “We Take Care of Our Own,” Ocean County’s Long-Term Recovery Group has launched a fundraising campaign to help get more superstorm Sandy victims back home.

Springsteen gave permission for the recovery group to use his song title for the fundraising campaign, and also allowed it to create a video of images from Sandy and use the song as background music, said Long-Term Recovery Group Vice Chairman Stanley Fischer.

MORE:  Sandy victims don’t deserve FEMA

“We asked to use it for one year, and they allowed us to use it for five years,” said Fischer, who first met Springsteen back in the mid-1980s, when The Boss lent a hand in the unsuccessful attempt to prevent the shutdown of 3M’s Freehold Township plant.

Fischer was then president of Local 8-760 of the Oil, Chemical and Atomic Workers Union, which represented 3M workers. Springsteen gave $25,000 to the effort to fight the plant closing, played at a benefit show at the Stone Pony, and signed newspapers ads that tried to convince 3M to keep the plant open.

Fischer kept in touch with Springsteen and his organization over the years, and recently reached out to his management team, asking if the long-term recovery group could use “We Take Care of Our Own” for the fundraising campaign.

MORE: Ortley Beach chapel rebuilding at last

The long-term recovery group is using the video to kick off its “We Take Care of our Own Adopt-a-Family” campaign, aimed at raising money from corporations, local businesses, fraternal organizations and the public in an effort to help get more Sandy victims back in their homes.

The campaign will feature profiles of families who are still struggling three and a half years after Sandy made landfall. The group is also urging people to contribute to the group’s page in the OceanFirst challenge. The top three fundraising groups will receive grants from the OceanFirst Foundation.

So far, the recovery group, an umbrella organization of more than 80 nonprofits, has distributed about $5.8 million to Sandy victims, paying for everything from rental assistance while their homes were being repaired to gaps in funding that were preventing their projects from being completed.

WATCH: Sandy towns beg for help with finances

Recovery Group Executive Director Sue Marticek said that local nonprofits are tapped out in many cases, and no longer have the money to contribute to the Sandy recovery. But hundreds of families still need help to get back home.

She said that using the song can help draw attention to the plight of the many residents who are still not home.

“It fits in with what we need to do,” she said. “We have been taking care of our own. We need to find a map to get these families back home. At least Bruce Springsteen is aware that this recovery is still going on.”

Marticek said that by trimming staff and stretching out its funding, the recovery group should be able to continue operating through the end of the year.

The song’s lyrics include a lament for the broken promises in the aftermath of Hurricane Katrina in New Orleans: “From the shotgun shack to the Superdome/ There ain’t no help, the cavalry stayed home.”

MORE: Springsteen performs Prince’s ‘Purple Rain’ in concert

“We need to personalize, we need to humanize what’s going on,” Fischer said Thursday at the monthly meeting of the recovery group, an umbrella organization of more than 80 nonprofits that has worked to provide money and volunteer labor that helps fill gaps between a homeowners’ resources and the actual cost of rebuilding.

He said that when he mentioned Sandy victims still struggling to return home while on a recent vacation, people he spoke to were shocked that the Shore’s recovery is not yet complete.

“Everybody thinks this is over,” Fischer said.

Jean Mikle: 732-643-4050,”

16 May 2016

Success Stories: The Pirl Family

13178791_657731907709668_1018482729911082205_n Caitlin was walking home when a drunk driver struck her nearly ten years ago. This accident left her paralyzed from the waist down and unable to navigate her ranch style home. In order to make the house more accessible, her father, Chris, spent $40,000 on renovations…only to watch Sandy destroy it all months later. For years they struggled to work their way through a mess of paperwork, which was compounded by a low flood insurance payout.

Eventually, they became clients of OCLTRG and our Disaster Case Managers helped them through the NFIP review that resulted in thousands of recovered dollars! But most importantly, we provided extensive emotional support for the family and truly cared about their progress. Now, Caitlin is nearly ready to move back into her new, entirely handicap-accessible home! “Its everything I could have ever wanted for her,” says her father. To date, OCLTRG has impacted 488 households with disabled persons.

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06 May 2016

Sandy advocate calls for investigation of FEMA

TOMS RIVER — Saying the Jersey Shore’s recovery has been “cut off at the knees” because of lowball flood insurance payments, a Sandy advocate has repeated the call for an investigation of the Federal Emergency Management Agency.

Sue Marticek, executive director of the Ocean County Long-Term Recovery Group, said paltry flood insurance payments have made it extremely difficult for Sandy victims to rebuild and elevate their homes.

The state’s largest Sandy recovery program, Reconstruction, Rehabilitation, Elevation, and Mitigation (RREM), was never intended to be the primary source of funds for rebuilding, she said. RREM offers grants of up to $150,000 for rebuilding and elevating primary residences.

“If FEMA and flood insurance would have paid those claims fairly, the RREM program would not have been the major part of people’s budgets,” Marticek said. “…We all really do need to be upset about what’s happened and transpired here.”

The long-term recovery group, an umbrella organization of about 80 nonprofit groups, has spent $5.8 million to help Sandy survivors get back home. About 80 percent of those who have received help from the group did have flood insurance, Marticek noted.

“You see, after paying premiums in good faith for years and in some cases decades, many up and down our coastline feel they have been shortchanged in their payouts which has created a nightmare for them to try to return home,” she said.

Last week, a former FEMA contractor said he was told to deny or underpay claims exceeding certain ranges in deciding compensation for Superstorm Sandy victims. 

Those decisions were made as part of FEMA’s Hurricane Sandy Claims Review Process, which was put in place following allegations of fraud in the initial claims process.

05 May 2016

Springsteen lends song to Sandy fundraising