Contractor Fraud Leaves Some Rebuilding 5 Years After Sandy

After Superstorm Sandy flooded the first floor of his New Jersey home with 4 feet of water, Rich Bindell shelled out tens of thousands of dollars to a contractor he knew was approved by the state and had done other work in his town.

Five years after the storm, the construction project remains unfinished and the contractor faces up to 10 years in prison after admitting this month to scamming more than 30 homeowners and employees of about $1.9 million.

James “Jaime” Lawson is one of more than 200 people charged in New Jersey with $11 million worth of Sandy-related fraud in a list that continues to grow five years after the storm. Most of those cases involved homeowners filing fraudulent applications for relief funds, but others have been contractors like Lawson.

Others including engineering companies and mortgage brokers have been charged with fraud in New York after authorities say they scammed federal loan programs after the storm.

Prosecutors and victims say their experience after Sandy in choosing contractors who saw opportunity in chaos can provide lessons to residents in Florida, Texas and Puerto Rico after recent devastating storms there.

“The cases involving contractors defrauding victims, to me, are the worst of the worse,” Attorney General Christopher Porrino said. “You’ve got people down and out trying to put their lives back together. It’s like getting hit twice.”

Complaints started coming in about a month after Sandy, said Sgt. Mark Malinowski of the Ocean County prosecutor’s office economic crimes unit. The county was one of the state’s hardest hit by Sandy.

Malinowksi believes people let their guards down when they’re using government grant money to pay for repairs. “It’s different than taking money out of their personal checking accounts,” he said.

Bindell contacted contractors to get price quotes and through word of mouth he learned about Lawson in the summer of 2015.

“He did some jobs in town and I went to look at them. He was cheaper than the other guys and he was listed as an approved contractor,” Bindell said.

The nearly $150,000 project would take six to eight months to complete, Bindell said he was told. However, it took Lawson almost a year to complete the plans and Bindell said when he started work, Lawson was fined for elevating the home without a permit.

The project sat while Bindell and his family, in their rented home, reached out to Lawson by phone and texts. It was then Bindell received a call from an adviser with the government’s Reconstruction, Rehabilitation, Elevation and Mitigation program, which had revoked Lawson’s permit for lack of insurance.

Bindell received much of his money back from the government, but is still out about $20,000 from the scam. He then had to tap into his retirement savings and use a home equity loan to come up with the extra $160,000 to fix the work Lawson had started. The project to raise the house and repair flood damage is ongoing and he has been renting a home elsewhere with his wife and two children since.

Based on his experience, he advises other storm victims to take their time rebuilding.

“I’d do my own background check. Don’t take the state’s word for anything,” he said. “Make sure the contractor is not taking on so many jobs.”

Porrino has written attorneys general in Texas, Florida and Puerto Rico with the identities of some of the fraudsters.

“You have to be really skeptical,” Porrino said. “Anytime you’re paying in advance for service you’re at risk.”