Months after Sandy, more fraud investigations launched

4:24 PM, May 2, 2013   |    comments
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NEW YORK -- Six months after Superstorm Sandy devastated parts of the U.S. Northeast, investigations are surging as government and law enforcement agencies pursue crackdowns on suspected corruption and other wrongdoing that took place in the aftermath of the storm.

In the latest enforcement action, New York Attorney General Eric Schneiderman announced Thursday that 25 service stations in the New York City area had reached monetary settlements totaling nearly $170,000 with the state for price gouging motorists after the late October storm. Four others have been hit with lawsuits for similar violations, he said.

The legal action targeted stations that raised retail prices as much as 100% after Sandy knocked out electricity and disrupted fuel deliveries to many competitors, forcing motorists to wait in the longest gas lines since the 1970s.

Stressing that most service stations complied with state pricing laws, Schneiderman said, "We want to send a message to the small minority of folks who tried to make a fast buck with illegal conduct that that will not be tolerated."

"There are dozens of other investigations still underway," said Schneiderman, whose office is also probing awards of storm cleanup contracts and the companies hired for that work.

Similarly, New Jersey Attorney General Jeffrey Chiesa's office has sued 24 service stations and hotels for alleged price gouging during the state of emergency declared after Sandy. In March, Chiesa announced the formation of a statewide fraud working group to coordinate investigations and prosecution of suspected Sandy-related criminal and civil fraud.

The action by the states comes as the U.S. Department of Homeland Security inspector general examines how millions of dollars in Federal Emergency Management Agency funds have been spent on Sandy-related response and recovery efforts.

Separately, the district attorneys in Long Island's two suburban counties east of New York City are investigating how storm-recovery contracts were awarded in their jurisdictions and the performance of the companies hired to do the work.

Kevin McCoy, USA TODAY

The Associated Press

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