Lansing Woman Sentenced for FEMA and Tax Fraud

June 8, 2010 - GRAND RAPIDS, MI—Billie Jo Chavez, age 57, of Lansing, Michigan was sentenced to 24 months' imprisonment, followed by three years of supervised release for filing false tax returns and filing a false claim to the Federal Emergency Management Agency (FEMA), U.S. Attorney Donald A. Davis announced today. U.S. Attorney Davis was joined in the announcement by Andrew G. Arena, Special Agent In Charge of the Detroit Field Office of the Federal Bureau of Investigation (FBI) and Maurice Aouate, Special Agent in Charge of the Detroit Field Office of the Internal Revenue Service (IRS).

The case arose from Chavez’s defrauding of Hurricane Katrina Disaster Recovery Centers set up to assist victims of the hurricane. According to court records, in September 2005, Chavez filed four fraudulent claims with FEMA in an alias name and in the names of family members in which she fraudulently claimed to have losses related to damage caused by Hurricane Katrina. In her false claims, she stated that their Canal Street property was damaged, and that her family lost work and suffered other damages. During this time period, Chavez and her family members did not live or work in Louisiana. In fact, Chavez and her husband were residing in Lansing, Michigan, during the time of the disaster. According to court records Chavez received $12,279 in false claims from FEMA.

According to court records, Chavez also filed false claims with the IRS for the tax years 2004 through 2007. Chavez filed federal income tax returns in which she falsely reported her husband’s income and withholdings on her returns and offset the income with false dependents and false child and earned income tax credits which allowed her to claim fraudulent refunds totaling over $15,000.

In a related case, Chavez’s daughter, Rachel Valdez, of Lansing, Michigan, previously pleaded guilty to making a false claim with the Department of Homeland Security related to Hurricane Katrina. On June 2, 2010, Valdez was sentenced to three years probation, a $2,000 fine, and $4,000 restitution to be paid to FEMA.

"Honest, hardworking Americans pay the price when others choose to cheat,” said Special Agent In Charge Aoaute. “Individuals, like Chavez and Valdez, whose frauds involve dishonesty and deceit, deserve to be punished.”

The case was investigated by special agents of the IRS and FBI and prosecuted by U.S. Attorney Donald A. Davis.