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14 in Miami-Dade indicted in FEMA fraud scandal
Federal authorities charged 14 Miami-Dade County residents with fraud Wednesday for claiming damage from Hurricane Frances to collect disaster assistance.
Three are accused of collecting money using addresses where they did not live. Another claimed damage from a sewer backup that occurred weeks before the storm in a home that had been condemned, court records say.
"Here you have people claiming they were victims of a natural disaster,'' Tom Mulvihill, First Assistant U.S. Attorney in Miami, said at a news conference. "It's not only reprehensible and contemptible, it's criminal.''
The arrests are the first in a continuing investigation in Miami-Dade, where the Federal Emergency Management Agency has paid $30.9 million to almost 13,000 residents for Frances, the Labor Day storm that meteorologists likened to a severe thunderstorm in the county.
"This is probably the tip of the iceberg,'' said U.S. Rep. Mark Foley, R-Palm Beach Gardens. "I hope this sends a clear, compelling message to anyone who tries to scam the system. I also hope this sends a wakeup call to the FEMA officials ... acting as if nothing is wrong.''
The Miami-Dade payments have drawn outrage nationwide since the South Florida Sun-Sentinel first reported in October on the large amounts going to a county spared any hurricane conditions. The controversy prompted a U.S. Senate committee investigation and proposed federal legislation to change the way the government awards disaster assistance in the future.
FEMA has defended the payments, with Director Michael Brown even saying he felt sorry for Miami-Dade residents who received checks and are now being labeled as cheats.
"These arrests prove the FEMA Director, Mr. Brown, dead wrong,'' said U.S. Rep. Robert Wexler, D-Boca Raton. "Mr. Brown, before the Florida congressional delegation, said that there was no significant fraud.''
Asked to comment on the arrests, FEMA released a statement vowing to work with authorities to uncover fraud. "It is unfortunate that individuals may seek to take advantage of the assistance meant for those who have suffered losses from disasters,'' Brown said in the statement.
On Tuesday, a federal grand jury returned indictments charging the 14 with wire fraud, mail fraud and filing false claims. The fraud charges are based on the defendants' use of the telephone to apply for aid and the mail to receive their checks.
On Wednesday morning, agents from the Department of Homeland Security's office of the inspector general, U.S. postal inspectors and Homestead Police rounded up 12. As of late Wednesday, the two others had not yet been brought into custody.
The defendants collected FEMA grants ranging from $1,452 to $24,755, according to the indictments. Five got checks in excess of $15,000.
One defendant collected $2,562 after appealing FEMA's decision to turn down her application, Mulvihill said.
"Another individual, having received a check from FEMA, wasn't satisfied with that and applied for more ... and in fact wasn't entitled to any of it,'' he said.
Ten lived in Homestead or Florida City in southern Miami-Dade, where investigators initially focused because it is farthest from where Frances made landfall in Martin County, Mulvihill said.
Ten of the defendants appeared Wednesday in federal court in Miami, shackled in handcuffs and leg irons. All said they were too poor to afford an attorney.
Seven told U.S. Magistrate Ted Bandstra they had no income. One said she worked at McDonald's, another at a convenience store.
Cassandra Brown of Miami, who collected $23,151, told the judge she receives $682 a month in retirement benefits from the state of Florida.
Three said they collected Social Security benefits for disabled children. Another testified she receives food stamps.
The defendants were all released Wednesday afternoon on bail, promising to appear in court March 11. As they left the courthouse, all declined comment. Some covered their heads while others ran from reporters and photographers, who chased them for half a block.
Hector Flores, a federal public defender appointed to represent them, also declined comment.
One of those arrested, Miranda Woodard, is on probation for a 2001 charge of public assistance fraud, Miami-Dade court records show.
In court, prosecutors expressed concern about releasing Yolanda Thomas, 26, because of her "lengthy criminal history'' of a dozen arrests including a charge of fraud by Plantation police. The mother of four is accused of collecting $15,703 from FEMA for damaged belongings at an address where she did not live.
"Her personal property was neither located at that address nor damaged as a result of the hurricane,'' the indictment says.
A woman who said she was Thomas' mother but would not give her name told the Sun-Sentinel she was "just as shocked as anybody else'' at her daughter's arrest.
"I think the people that gave them money [are] just as guilty,'' she said. "If they go in the apartment and there's no damage, why would they give them money?''
Prosecutors would not say how FEMA approved the claims. People try to cheat the government "almost every day,'' Mulvihill said.
Officials said the investigation continues but declined to give specifics. They would not say whether FEMA employees are targets of the investigation or discuss any connections among those arrested. Among the defendants were a father and daughter, a prosecutor said in court.
"We are going to continue this investigation and we are going to take it wherever it leads us,'' said Donald Balberchak of the Homeland Security inspector general's office.
Authorities will try to recoup the money from those charged with fraud. They also could face prison time. The maximum penalty for each count of wire or mail fraud is 20 years; the false application counts each carry up to five years. Mulvihill said the maximum sentences would be an unlikely "extreme."
U.S. Rep. Clay Shaw, a frequent critic of the Miami-Dade payments, praised the arrests. "I hope this is a deterrent to people filing false claims in the future,'' said Shaw, R-Fort Lauderdale.
Staff Researcher Barbara Hijek contributed to this report.
Sally Kestin can be reached at email@example.com or 954-356-4510.