Jury Returns Guilty Verdicts in BP Fund and Disaster Fraud
This is the Largest Financial Loss Case to Date Arising from
Claims Filed in Connection with the April 2010 Deepwater Horizon Spill
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Henry Gutierrez, Postal Inspector in Charge, U.S. Postal Inspection Service, Miami Field Office, and David Wickersham, Special Agent in Charge, U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, Dallas Region, announced that Joseph Harvey and Anja Karin Kannell, most recently of Lighthouse Point, Florida, were convicted today by a jury after a four day trial in U.S. District Court in Miami for their involvement in a series of disaster-related fraud schemes, including the largest financial loss case to date arising from claims filed in connection with the April 2010 Deepwater Horizon pollution incident in the Gulf of Mexico.
Harvey was convicted on 40 of the 41 charges against him. Kannell was convicted on 34 of the 38 charges against her. The superseding indictment charged mail fraud, wire fraud, access device fraud, and aggravated identity theft, all in connection with fraudulent claims filed by the two defendants for purported lost income and harm resulting from the oil spill, hurricanes, and other natural disasters dating back to 2008, in violation of Title 18, United States Code, Sections 1341, 1343, 1029(a)(2) and (b)(1), 1028A(a)(1) and (c)(5), and 2.
Harvey and Kannell have been detained as flight risks since being arrested by U.S. Postal Inspectors in October 2011. U.S. District Judge James Lawrence King presided over the trial and scheduled sentencing for both defendants on August 16, 2012 at 9:30 AM in Miami. The defendants each face possible statutory maximum terms of imprisonment of up to thirty years each on the multiple counts of mail fraud and wire fraud on which they were convicted. A term of up to 10 years’ imprisonment may be imposed on each of the multiple counts of access device fraud on which they were convicted. Additionally, they each face mandatory consecutive terms of imprisonment of up to 2 years on each of 4 counts of conviction for aggravated identity theft.
According to the testimony and exhibits presented in court, in June 2010, BP established the Gulf Coast Claims Facility (GCCF) to administer, mediate, and settle certain claims of individuals and businesses for costs, damages, and other losses incurred as a result of oil discharges due to the April 20, 2010 explosion and fire on the Deepwater Horizon, an oil rig in the Gulf of Mexico that had been drilling an exploration well. In August 2010, the GCCF began receiving and processing such claims for costs, damages, and other losses incurred as a result of the Deepwater Horizon incident, paying the claims from a $20 billion Trust Fund established for that purpose.
The jury convicted Harvey and Kannell for filing fraudulent claims against the fund, under thirty-four assumed identities from August 2010 through January 2011. The defendants used the actual names and social security numbers of individuals residing in Florida, but submitted addresses located in Louisiana, Mississippi, Alabama, and the Florida Panhandle. According to the testimony of a credit union representative, payments were issued to the defendants through accounts established under fictitious names in San Antonio, Texas. The scheme was carried out through mailings and through the use of the internet.
According to evidence presented at trial, Harvey and Kannell filed claims seeking more than $1 million, and succeeded in causing approximately $380,000 to be paid into the Texas accounts. The defendants then withdrew the funds using an ATM card issued in the fictitious account holders’ name at ATM machines throughout South Florida, and by sending wire transfers in large amounts to rent luxury homes, and purchase high-end vehicles and boats.
The defendants were also convicted of using unauthorized access devices consisting of unique GCCF Claim numbers assigned to their fictitious claims. Harvey and Kannell were also convicted of possessing and using without lawful authority the social security numbers of three identity theft victims in December 2010.
In addition, the defendants were convicted of mail and wire fraud schemes involving the disaster relief effort in Louisiana in the aftermath of Hurricanes Gustav and Ike in 2008. The evidence established that at least 47 fraudulent claims, using the personal information of identity theft victims, against the Louisiana Workforce Commission, which was administering the Disaster Unemployment Assistance program, on behalf of the U.S. Department of Labor and the Federal Emergency Management Agency (FEMA). Harvey and Kannell also were convicted of filing multiple fraudulent claims against FEMA, asserting that they suffered losses and injuries, and were qualified for disaster assistance as a result of severe storms, tornadoes, and flooding in Mississippi in April and May 2011.
Lastly, the jury found that Harvey and Kannell also filed 76 fraudulent claims for benefits against the employment security agencies of North Dakota and New York State, which administered Disaster Unemployment Assistance programs funded by FEMA to offset the impact of the Valentine’s Day 2011 storm that caused severe flooding in Minot and Bismark, North Dakota, and the impact of Tropical Storm Irene on certain upstate counties in New York State in August 2011.
Mr. Ferrer commended the investigative efforts of the U.S. Postal Inspection Service and the Department of Labor, Office of Inspector General. Mr. Ferrer also thanked the Department of Justice, the New York State Department of Labor, Office of Special Investigations, Job Service North Dakota, the Louisiana Workforce Commission, DHS Federal Emergency Management Agency, and DHS Office of Inspector General. The case was being prosecuted by Assistant U.S. Attorneys Thomas Watts-FitzGerald and Timothy Abraham.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.