NEW ORLEANS HUSBAND AND WIFE PLEAD GUILTY TO STEALING OVER $270,000 IN KATRINA-RELATED FRAUD
CHRESSYE WALLACE, age 43, and ROBERT WALLACE, age 49, both of New Orleans, Louisiana, pled guilty as charged today in front of U. S. District Chief Judge Sarah S. Vance to a three-count Bill of Information for theft of government funds for their role in obtaining over $270,000 fraudulently from the Small Business Administration, the Louisiana Road Home Program, and the National Flood Insurance Program in the aftermath of Hurricane Katrina, announced U. S. States Attorney Jim Letten.
According to court documents, in 1999 the WALLACES purchased a home located in the 1800 block of N. Roman St., New Orleans, Louisiana which subsequently caught fire and burned to the ground in August 2004. The house was never rebuilt. They also owned a home in the 1200 block of 1223 St. Roch Street, New Orleans, Louisiana, as well as a third home located in the 3300 block Nevada Street, New Orleans, Louisiana. At the time of Hurricane Katrina devastated the New Orleans area, the WALLACES were living at the home on Nevada Street.
After Hurricane Katrina struck New Orleans, ROBERT WALLACE submitted a claim to the NFIP, alleging that the home on N. Roman Street had been flooded by over four feet of water, even though no structure was standing there at the time of the storm. As a result of this application, and other, similar representations, ROBERT WALLACE received $72,200 in federal funds.
ROBERT WALLACE also filed an application for SBA disaster loan assistance representing that he owned the property located in the 1200 block of St. Roch Street, New Orleans, Louisiana, and that the property was his primary residence on August 29, 2005. ROBERT WALLACE admitted today that he fraudulently represented that he was a full-time resident of the St. Roch Street property, when, in fact, he had been living at the Nevada Street property and was not living at the home on St. Roch Street. As a result of these representations, ROBERT WALLACE received $50,000.00 from the SBA, for which he was not entitled.
Additionally,, from November 2006 through January 2009, CHRESSYE WALLACE submitted a series of documents to the Louisiana Road Home Program fraudulently claiming that she was living at the house located on St. Roch Street at the time of the storm. As a result of these false representations, CHRESSYE WALLACE obtained $150,000 in HUD Community Development Block Grant money.
ROBERT WALLACE faces a possible maximum of twenty (20) years imprisonment, a $500,000 fine, and three (3) years of supervised release. CHRESSYE WALLACE faces a possible maximum of ten (10) years imprisonment, a $250,000 fine, and three (3) years supervised release following any term of imprisonment. Sentencing has been scheduled for December 1, 2010.
The case was investigated by the U. S. Department of Housing and Urban Development - Office of the Inspector General, the Small Business Administration - Office of the Inspector General, the Federal Bureau of Investigation, and Department of Homeland Security - Office of Inspector General. The case is being prosecuted by Assistant U. S. Attorney Jordan Ginsberg.
If you believe you have been a victim of fraud from a person or an organization soliciting relief funds on behalf of storm victims or have knowledge of waste, abuse, or allegations of mismanagement involving disaster relief operations, contact the National Center for Disaster Fraud toll free at: (866) 720-5721. You can also fax information to: (225) 334-4707 or e-mail it to: email@example.com