Brooklyn prosecutors launch probe of Sandy-related scams

Reuters News
Posted: Nov 08, 2012 5:16 PM
Brooklyn prosecutors launch probe of Sandy-related scams

By Jessica Dye

NEW YORK (Reuters) - Brooklyn District Attorney Charles Hynes said on Thursday his office would probe claims that hotels, gas stations and other businesses illegally hiked prices or scammed customers in the wake of Superstorm Sandy.

Hynes said he would empanel a special grand jury to investigate reports of skyrocketing prices and other frauds, such as fake charities pocketing storm-related contributions and bogus construction companies accepting payment for repair work they didn't plan on doing.

"The sad truth about a tragedy is that while it brings out the very best in people, it can also bring out the worst," Hynes said in a statement. "To raise the price of a hotel, as people seek emergency shelter, is just unconscionable."

Sandy made landfall in the Northeastern United States on October 29, wreaking havoc along a stretch of coastline from southern New Jersey to New York's Long Island. Parts of New York City, including low-lying Red Hook in Brooklyn, suffered extensive damage from hurricane-force winds and flooding.

The storm knocked out power to millions of homes in the city and the surrounding tri-state area, forcing some to seek shelter in hotels, and fears of a fuel shortage created long lines at gas stations.

Local, state and federal prosecutors have warned residents to be on the lookout for scams, price-gouging and other illegal activity related to the storm.

On Monday, New York Attorney General Eric Schneiderman said his office had initiated an investigation into post-Sandy price gouging after receiving hundreds of complaints from consumers.

The local and state investigations are being conducted separately, said Brooklyn District Attorney spokesman Jonah Bruno. The Brooklyn probe is expected to go beyond price inflation and cover a wide range of storm-related scams, he said.

Bruno said the grand jury would investigate several specific reports of potential illegal activity the office had already received, but declined to name the companies under scrutiny or the nature of the allegations. The grand jury, which will convene Monday, also will examine additional complaints the office receives in the coming days, he said.

It was not immediately clear whether other district attorneys in and around New York City had plans to launch similar probes. Queens prosecutors have charged at least 20 people with various storm-related crimes, including looting and violence in gas lines, a spokesman said. The Queens district attorney's office is continuing to monitor storm fallout but believes most of the incidents it has heard about are isolated, not systemic, a spokesman said.

(Editing by Eric Walsh)