Waste of the Day: Storm $ Bought Lamborghini

Federal disaster money meant to rebuild homes destroyed by Hurricane Sandy instead helped finance a contractor’s Lamborghini, Porsche, Jaguar and real estate after he defrauded Long Island homeowners.

How a con artist bought a Lamborghini using money intended for rebuilding

Alexander Almaraz, owner of the construction company Design Concepts Group, was sentenced last month to four years in federal prison after pleading guilty to conspiracy to commit wire fraud.

Key facts: After Hurricane Sandy hit the East Coast in 2012, New York awarded $1.2 billion in federally-backed grants to help almost 13,000 families rebuild their homes. The funds came from U.S. Department of Housing and Urban Development’s Community Development Block Grant-Disaster Recovery Program.

Twenty homeowners hired Almaraz using $1.5 million in grant funding and $1 million from their personal savings. He was supposed to lift their houses onto temporary supports to replace their damaged foundations and then lower them back into place.

Almaraz admitted in court that he never intended to perform the work. He used the money to buy luxury cars, pay his credit card bills and purchase land in Missouri.

Almaraz also told the homeowners they could not live in their houses while he was supposedly working on them. Many moved into apartments Almaraz managed, and paid him rent.

Almaraz then moved to San Antonio without fixing the houses.

One homeowner told CBS New York that he paid Almaraz about $150,000 and was left with a home he could not live in. “The hurricane was terrible, but dealing with him was ten times worse,” he said.

The Department of Justice said it will determine how much restitution the victims will receive at a later date.

Not the only offender

Background: Almaraz’s scheme was one of the most high-profile fraud cases following Hurricane Sandy, but it was certainly not the only one. 

By 2015, the nonprofit New York Legal Assistance Group told Newsday it had handled 300 cases of alleged fraud on behalf of low-income homeowners. In 2017, an attorney with Touro University told Newsday his firm had assisted in 2,000 cases related to Sandy, with “nearly all” of them involving contractor fraud.

Summary: Congress appropriated billions of dollars after Hurricane Sandy so families could rebuild their homes — not so a fraudster could buy luxury cars.

The #WasteOfTheDay is brought to you by the forensic auditors at OpenTheBooks.com.

This article was originally published by RealClearInvestigations and made available via RealClearWire.