Tuckerton Leader

Contractors Indicted for Sandy Construction Fraud

Feds, State Allege $700,000 in Disaster Relief Stolen
Aug 04, 2017
Photo by: supplied

Two Little Egg Harbor residents have been indicted by a state grand jury for allegedly stealing $700,000 from more than 20 victims of Superstorm Sandy.

Jeffrey Colmyer, 41, and Tiffany Cimino, 33, were arrested on Oct. 11, 2016 and were released from jail after posting bail bonds of $150,000 each. Their home improvement contracting companies are Rayne Construction Management Services, LLC and Colmyer and Sons, LLC.

The indictment was handed up on Aug. 1 to Superior Court Judge Mary C. Jacobson in Mercer County, who assigned the case to Ocean County, where the defendants will be ordered to appear in court for arraignment.

According to a press release from Attorney General Anthony Porrino, the defendants allegedly diverted the money to pay personal expenses, including a $17,000 diamond ring and other jewelry purchases by Cimino, and hundreds of thousands of dollars that Colmyer gambled at seven casinos in Atlantic City. Meanwhile, they abandoned jobs, or in many cases failed to even start jobs, leaving many victims with uninhabitable homes. Most of the funds allegedly stolen came from the Reconstruction, Rehabilitation, Elevation and Mitigation (RREM) Program, a Sandy disaster relief aid administered by the New Jersey Department of Community Affairs and funded by the U.S. Department of Housing and Urban Development. RREM was the state’s largest Sandy housing recovery program. It provided grants to impacted homeowners to cover rebuilding costs up to $150,000 that were not covered by insurance, other federal relief funds, or other sources.

“Colmyer and Cimino allegedly stole $700,000 from homeowners devastated by Superstorm Sandy – ruthlessly draining away relief funds the victims needed to reclaim their lives – so they could instead use the money to bankroll their own gambling and luxuries,” stated Porrino. “We have prosecuted scores of defendants for various types of fraud related to Sandy, but this case is by far the most egregious.”

The grand jury indicted the pair on charges of second-degree conspiracy, second-degree theft by failure to make required disposition of property received, two counts of second-degree financial facilitation of criminal activity (money laundering), second-degree misconduct by a corporate official, third-degree financial facilitation of criminal activity (structuring) and third-degree tampering with public records or information.

Colmyer and Cimino also are charged with various third-degree counts of filing a fraudulent tax return, failure to file tax returns, and failure to pay taxes.

The tampering charge relates to the fact that the defendants allegedly lied about Colmyer’s ownership interest in Rayne Construction Management Services in applying for and obtaining a home elevation contractor registration through the Division of Consumer Affairs.

Also, the defendants allegedly falsely claimed that Colmyer had less than a 10 percent interest in Rayne Construction, because the application requires that anyone with an interest of 10 percent or more disclose whether he or she has been convicted of certain crimes, such as theft. Colmyer has two prior convictions for theft by failure to make required disposition of property.

Second-degree charges carry a sentence of five to 10 years in state prison and a fine of up to $150,000, while third-degree charges carry a sentence of three to five years in prison and a fine of up to $15,000. The money laundering and structuring charges carry sentences consecutive to the sentence for the theft charge, and carry potential additional penalties of $250,000 and $75,000, respectively.

Indictments mean a grand jury found reasons to accuse; the defendants have not been proven guilty in court.

The Division of Criminal Justice Financial & Computer Crimes Bureau, the U.S. Department of Housing and Urban Development Office of Inspector General and the New Jersey Division of Taxation Office of Criminal Investigation participated in the joint investigation.

In addition, the New Jersey Division of Consumer Affairs previously investigated the matter and filed a civil action last year against the defendants, alleging numerous violations of the Consumer Fraud Act and seeking consumer restitution and civil penalties, among other things.

“Unfortunately, natural disasters can attract swindlers who target people when they are at a vulnerable point in their lives,” said Community Affairs Commissioner Charles A. Richman. “For this reason, the state has committed itself from day one to rooting out fraud, theft and other illegal conduct as we rebuild from Sandy.”

The Division has concluded the civil action and as a result, the Department of Community Affairs has disbursed an additional $776,000 in federal relief funds to the RREM recipients who were alleged victims of Colmyer and Cimino. The money goes to hire new contractors to repair their storm-damaged homes.

Porrino thanked the Department of Community Affairs and the Division of Taxation Office of Criminal Investigation; HUD Office of Inspector General; U.S. Department of Homeland Security Office of Inspector General; and the Little Egg Harbor Township Police Department for valuable assistance in the investigation.

Porrino also commended the Division of Consumer Affairs for their investigation, lawsuit and cooperation.

—P.J.

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