New Orleans City Councilman Pleads Guilty to Conspiracy

NEW ORLEANS—Jon Johnson, age 63, the New Orleans City Councilman for District E, was charged with and pled guilty today to a single count of conspiracy to commit theft of government funds and to submit false documents to a federal agency, announced U.S. Attorney Jim Letten.

According to court documents, Johnson controlled the operations and the finances of Ninth Ward Housing Development Corporation (“Ninth Ward”), a non-profit organization in New Orleans. Ninth Ward owned a building located at 1008 Jourdan Avenue, which was commonly referred to and known as “The Semmes Building.”

The Semmes Building, formerly a school, was flooded as a result of Hurricane Katrina on August 29, 2005. After the storm, Johnson caused Ninth Ward to apply for FEMA grant funds, which FEMA had made available to certain qualifying individual property owners, civic municipalities, and businesses whose properties and possessions had been damaged and destroyed during and because of Hurricane Katrina. Ninth Ward received these funds, known as Public Assistance Grants.

Jon Johnson, who was a candidate for Louisiana State Senate in District 2 for the election that took place on October 20, 2007, today admitted that he personally and exclusively directed the use and misuse of the federal funds received by Ninth Ward. Further, he admitted that the federal funds received from FEMA were used to make contributions to and pay expenses for his campaign for the Louisiana State Senate in the summer and fall of 2007 and for other expenditures unrelated to Ninth Ward.

Additionally, Jon Johnson admitted today that he arranged for $16,640 to be transferred from Ninth Ward to the New Orleans Health Clinic (NOHC). NOHC was another non-profit with which Jon Johnson was affiliated and over which he exerted executive control and influence. Once this Ninth Ward money was in the NOHC account, the NOHC funds received from Ninth Ward were used to make contributions to and pay expenses for his campaign for the Louisiana State Senate in the summer and fall of 2007 and for other expenditures unrelated to NOHC.

Johnson also admitted today that in applying for a disaster assistance loan from the SBA to help pay for expenses associated with repairing the damage his home had sustained during and as a result of Hurricane Katrina, he conspired to submit false documents to that federal agency.

Specifically, Jon Johnson, admitted that he conspired to submit to representatives of the SBA three false and fabricated contracts that he claimed to have entered into for repairs made to the defendant’s personal residence. Johnson admitted that he submitted these false and fabricated contracts to the SBA in an effort to document the manner in which he had spent a low-interest loan the SBA had provided to him. The contracts were created solely for submission to the SBA and did not represent or reflect the amounts he paid to the contractor for the work performed.

Johnson faces a maximum penalty of five years in prison along with a $250,000 fine.

Also charged today via bill of information were Roy Lewis and Asif Gafur. Lewis, charged with misprision of a felony, is alleged to have known about and concealed a conspiracy to commit theft of government funds. Gafur, charged with structuring financial transactions to evade a reporting requirement, is alleged to have participated in a scheme, at Johnson’s behest, to route federal funds that Ninth Ward had received to Johnson’s campaign. Gafur’s offense carries a maximum penalty of five years’ imprisonment and upwards of a $250,000 fine. Lewis’ charge carries a maximum penalty of three years’ imprisonment. United States Attorney Jim Letten reiterates that a bill of information is only an allegation of criminality and that all defendants charged with a crime are innocent until proven guilty.

Speaking on today’s guilty pleas, Michael J. Anderson, Special Agent in Charge of the FBI New Orleans Field Office, stated:

“As a new member of the New Orleans community still recovering from the aftermath of Hurricane Katrina, I applaud, both in my law enforcement capacity and as a citizen taxpayer, the partnership of the USAO, FBI, HUD-OIG, and DHS-OIG to hold Councilman Johnson fully accountable for his diversion of Katrina-related HUD funds for his own personal and political purposes.”

U.S. Attorney Jim Letten added, “As we continue to forge ahead in relentlessly addressing the corruption which has taken so much from our community and our citizens, we have once again demonstrated our zero tolerance policy for any violations of law and trust by our public servants. Today’s convictions are the product of that policy, together with the dedication of our U.S. Attorney’s Office staff and our federal law enforcement partners, and coupled with the public’s right and demand to have public officials who serve them, free from compromise and self-serving interests. We will continue.”

The cases were investigated by the Office of Inspector General for Housing and Urban Development, the Federal Bureau of Investigation, the Office of Inspector General for the Department of Homeland Security, and Small Business Administration-Office of Inspector General. The case was prosecuted by Assistant United States Attorneys Daniel P. Friel and Brian P. Marcelle.

Three Defendants Plead Guilty to Disaster Fraud Related to Joplin Tornado Benefits

SPRINGFIELD, MO—David M. Ketchmark, Acting United States Attorney for the Western District of Missouri, announced today that three Joplin, Missouri residents have pleaded guilty in federal court, in separate and unrelated cases, to fraudulently receiving federal disaster benefits following the May 22, 2011 tornado.

Wanda Gail McBride, 51, of Joplin, pleaded guilty before U.S. District Judge Richard E. Dorr today to the charge contained in an April 3, 2012 federal indictment. McBride was taken into custody at the conclusion of her change of plea hearing. Ronald Martell Irby, 30, and Karen Marie Parks, 37, both of Joplin, also pleaded guilty to disaster fraud on Friday, July 6, 2012.

The defendants applied for federal disaster benefits by falsely claiming that their homes and property had been damaged or destroyed in the tornado. By pleading guilty, they admitted that they made materially false and fraudulent statements to FEMA in their applications for disaster benefits.

McBride falsely claimed that she was entitled to temporary rental assistance because she moved out of her home due to damage caused by the tornado and rented another residence. McBride was initially awarded $4,786 by FEMA for repairs to her residence, as well as $938 for rental assistance. McBride later submitted fraudulent documentation in order to receive $5,628 in additional rental assistance. McBride admitted today that she submitted two fabricated rental receipts with her application for FEMA rental assistance in July 2011. Later that month, she submitted a fabricated lease agreement for FEMA rental assistance at another address. McBride admitted that she had never moved to, resided at, signed a lease for, or paid rent at either address; in fact, neither address exists.

Irby listed 1823 W. 23rd St., Joplin, as his primary residence on a FEMA form in which he claimed the residence was damaged by the tornado. Irby received a total of $5,114 in FEMA payments and was provided with a temporary housing unit. However, Irby admitted today that this was never his primary residence. Rather, Irby’s girlfriend had been a one-time resident who was evicted prior to the tornado. Further, Irby himself had been banned from the property.

Parks listed 1502 S. Michigan Ave., Joplin, as her primary residence on a FEMA form in which she claimed the residence was damaged by the tornado. Parks received a payment of $1,368 from FEMA. However, Parks admitted today that she did not live at that address at the time of the disaster. Parks’s rent at another residence was paid through the Economic Security Rental Assistance Program, a state-funded program administered by the Jasper County Public Housing Agency, for individuals who were homeless and/or disabled. Because Parks did not pay her own rent, she was not eligible to receive rental assistance payments from FEMA.

Under federal statutes, each of the defendants is subject to a sentence of up to 30 years in federal prison without parole, plus a fine up to $250,000. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.

Disaster Fraud Hotline

Anyone with information about disaster fraud related to the Joplin tornado should call the National Center for Disaster Fraud hotline at 866-720-5721, the Joplin Police Department at 417-623-3131, or the FBI’s Joplin Office at 417-206-5700.

These cases are being prosecuted by Assistant U.S. Attorney Steven M. Mohlhenrich. They were investigated by the FBI, Homeland Security Investigations-Office of Inspector General, and the Joplin, Missouri Police Department.

U.S. Fire Administrator: Stay Safe on the Fourth

WASHINGTON, D.C. -- FEMA’s United States Fire Administration reminds everyone of the dangers associated with fireworks.  According to the National Fire Protection Association (NFPA), far more U.S. fires are reported on July Fourth than on any other day, and fireworks account for more than any other cause of fires.  The risk of fireworks injury was highest for children ages 5-14 – more than twice the risk for the general population.

“Every year around the Fourth of July, thousands of people, most often children and teens, are injured while using consumer fireworks,” said U.S. Fire Administrator Ernest Mitchell. “Despite the well-known dangers of fireworks, few people understand that misuse of both legal and illegal fireworks can result in devastating burns, other injuries, fires, and even death.”

In 2010, fireworks caused an estimated 15,500 fires, including 1,100 total structure fires, 300 vehicle fires, and 14,100 others, according to a June NFPA report. That same year, U.S. hospital emergency rooms treated an estimated 8,600 people for fireworks related injuries.  In 2011, there were four reported deaths from fireworks.

“With so many areas of the nation experiencing drought-like conditions, I would encourage people to attend a local public display,” said Mitchell.  “Listen to local fire and safety officials for the most current information regarding fireworks in your area.”

If you are going to use legal and locally approved fireworks, follow these safety tips:

 •Make sure fireworks are legal in your area before buying or using them.

 •Never allow young children to play with or ignite fireworks. Young children suffer injuries from sparklers, for example, which burn at temperatures of about 2,000 degrees – hot enough to melt some metals.

 •Always have an adult closely supervise fireworks activities if older children are allowed to handle devices.

 •Avoid buying fireworks that are packaged in brown paper because this is often a sign that the fireworks were made for professional displays and that they could pose a danger to consumers.

 •Never place any part of your body directly over fireworks when lighting the fuse. Back up to a safe distance immediately after lighting fireworks.

 •Keep a bucket of water or a garden hose handy in case of fire.

 •Never try to relight or handle malfunctioning fireworks. Soak them with water and throw them away.

 •Never point or throw fireworks at another person.

 •Light fireworks one at a time, then move back quickly.

 •Never carry fireworks in a pocket or shoot them off in metal or glass containers.

 •After fireworks complete their burning, douse the spent device with plenty of water from a bucket or hose before discarding it to prevent a trash fire.

For those seeking more information regarding fireworks in your area, check with local fire officials and visit the following recommended websites:

 •www.cpsc.gov/cpscpub/prerel/prhtml12/12203.html

 •www.usfa.dhs.gov

 •www.nfpa.org/itemDetail.asp?categoryID=2408&itemID=55435

As an entity of the Department of Homeland Security's Federal Emergency Management Agency, the mission of the United States Fire Administration is to provide national leadership to foster a solid foundation for our fire and emergency services stakeholders in prevention, preparedness, and response.

FEMA’s mission is to support our citizens and first responders to ensure that as a nation we work together to build, sustain, and improve our capability to prepare for, protect against, respond to, recover from, and mitigate all hazards.

Birmingham Woman Indicted for Disaster Fraud

BIRMINGHAM—A federal grand jury today indicted a Birmingham woman for fraudulently claiming disaster benefits following the April 27, 2011 tornadoes that struck North Alabama, announced U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Patrick J. Maley, and Department of Homeland Security, Office of the Inspector General, Special Agent in Charge James E. Ward.

The three-count indictment filed in U.S. District Court charges Charlotte H. Browning, 51, with making fraudulent representations to the Federal Emergency Management Agency in an application for disaster benefits concerning her place of residence on the day of the tornadoes. Browning falsely represented that she lived at a residence on First Avenue South in Birmingham that had been damaged by the storm. She also was charged with making a false statement to FEMA by presenting a false lease on the First Avenue South property in applying for disaster-benefits.

The indictment further charges Browning with mail fraud in connection with an $11,647 U.S. Treasury check mailed to her based on a false FEMA benefits application she filed in someone else’s name, without their knowledge, for a house on Lafayette Street in Birmingham. Neither Browning nor the person in whose name she filed for those disaster benefits lived at the Lafayette Street address, according to the indictment.

The maximum penalties for the charges Browning faces are: disaster fraud, 30 years in prison and a $250,000 fine; false statement, five years in prison and a $250,000 fine; and mail fraud, 30 years in prison and a $1 million fine.

The public can report fraud, waste, abuse, or allegations of mismanagement involving disaster relief operations through the National Disaster Fraud Hotline, toll-free, at 1-866-720-5721 or by e-mailing disaster@leo.gov. The telephone line is staffed by a live operator 24 hours a day, seven days a week.

The FBI and DHS-OIG investigated the case.

Members of the public are reminded that the indictment contains only charges. A defendant is presumed innocent of the charges, and it will be the government’s burden to prove a defendant’s guilt beyond a reasonable doubt at trial.

Birmingham Man, Tarrant Woman Indicted Separately for Disaster Fraud

BIRMINGHAM—A federal grand jury today indicted two individuals for fraudulently claiming disaster benefits following the April 27 tornadoes that struck Tuscaloosa, Birmingham, and other parts of the state, announced U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Patrick J. Maley, and Department of Homeland Security, Office of the Inspector General, Special Agent in Charge James E. Ward.

In separate indictments filed in U.S. District Court, MICHAEL JAMES CORBITT, of Birmingham, and KANDACE PROCTOR, of Tarrant, are charged with fraudulently representing their addresses on the day of the tornadoes in the applications for disaster benefits they submitted to the Federal Emergency Management Agency. Corbitt, 26, claimed he lived on Hibernian Street in Birmingham. Proctor, 23, claimed she lived on Pigeon Forge Drive in Tuscaloosa. Neither lived at the address they claimed. Both Corbitt and Proctor are also charged with making false claims to FEMA for temporary rental assistance, purportedly necessitated by the storm. Corbitt also is charged with making a false statement to FEMA about living in rental property in Fairfield following the April tornadoes.

The public can report fraud, waste, abuse, or allegations of mismanagement involving disaster relief operations through the National Disaster Fraud Hotline, toll free, at 1-866-720-5721, or by e-mailing disaster@leo.gov. The telephone line is staffed by a live operator 24 hours a day, seven days a week.

The FBI and DHS-OIG investigated both cases.

Members of the public are reminded that the indictment contains only charges. A defendant is presumed innocent of the charges and it will be the government’s burden to prove a defendant’s guilt beyond a reasonable doubt at trial.