4 Plead Guilty to Making False FEMA Claims

In the first fraud convictions related to the hundreds of millions of dollars being doled out for earthquake relief, four people have agreed to plead guilty to falsely claiming to have lived in the Northridge apartment building in which 16 people died, authorities said Monday.

All sought aid from the Federal Emergency Management Agency by telephoning an assistance line and giving their address as the Northridge Meadows apartment building on Reseda Boulevard, where the stunning failure of the first floor caused the greatest concentration of casualties from the Jan. 17 earthquake, prosecutors said.

Pleading guilty in U.S. District Court to a single count of making a false claim to a government agency were Daniel Richards, 42, of Hollywood; Denise Jones, 35, of Carson, and Miguel Cordero, 34, of Van Nuys. Mary Mitchell, 27, of Paramount has agreed to enter a guilty plea on Wednesday.

The four cases represent the first fraud prosecutions arising out of the half-million applications for assistance related to the quake, but officials said that as many as 10 additional arrests are expected later this week or early next week by a multi-agency anti-fraud task force. FEMA has sent out checks for more than $600 million to cover temporary housing costs and minor repairs.

In light of the prosecutions, U.S. Atty. Nora M. Manella urged anyone who has filed false aid claims to “take stock of their situation and consider withdrawing their claims or returning the money they have improperly received.”

Soon after the quake, FEMA sent checks for as much as $3,400 to people in heavily damaged areas of the city prior to sending inspectors to verify the damage. Some of those checks have been returned but others received by people who were not eligible have yet to be recovered, the U.S. Attorney’s office said.

FEMA spokesman Phil Cogan said some fraud occurs in every disaster and that the agency tries, through computer checks and inspections, to pursue those who should not have received money. “Generally, it’s a very small percentage and . . . most of the assistance goes to people who need it,” he said.

Federal officials got a lucky break that led to the first four arrests when an alert mail carrier noticed that checks were arriving addressed to people with unfamiliar names. He contacted his supervisor and the anti-fraud task force became involved.

Officials said Cordero claimed in his FEMA application that he lived in the apartment where mechanic Pil Soon Lee and his 14-year-old son were crushed to death. Richards said he lived in an apartment where a 52-year-old man died.

Cordero, Jones and Mitchell each received $2,300 checks. Richards did not receive money but repeated the claim that he had lived at Northridge Meadows when contacted by investigating agents posing as relief workers.

Deputy Federal Public Defender Anthony Eaglin, who represented Cordero, confirmed that his client had pleaded guilty but declined further comment. Cordero, who remains jailed in lieu of $15,000 bail, will be sentenced May 16 by U.S. District Judge Harry Hupp. Richards, who is in custody, is to be sentenced May 2. Sentencing for Jones, who is free on bond, is set for June 27.

Each faces a maximum penalty of five years imprisonment, a $250,000 fine and three years probation.