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4 Arrested for Scamming City to Pay for Sandy Repairs on Summer Homes

By Katie Honan | February 15, 2017 1:52pm

BREEZY POINT — Homeowners living part-time in communities hit hard by Hurricane Sandy scammed the city out of hundreds of thousands of dollars in repairs by pretending the homes were their primary residence in order to get free renovations, a new report by the Department of Investigation has found.

Four people were arrested as part of a probe into the city's Rapid Repairs and Build It Back programs — which were designed to help people get back into their homes and make vital repairs following the 2012 storm — after investigators found homeowners received work and reimbursements on homes damaged by the storm despite living elsewhere. 

The arrests were made on Wednesday and the four were charged with felonies that include grand larceny for falsifying records pertaining to the program, the Queens DA said. 

Among the people accused of scamming the system were:

►Donata Rea, 58, of Rockaway Park, filed a false application through Build It Back to get benefits from an elderly woman who died in 2011, DOI said. She faces up to 25 years in prison. 

►John Holl, 73, claimed his home on 17 Doris Lane in Breezy Point was his primary residence, scamming the city of more than $85,000 in construction funds for the property through Build It Back, officials said. His main residence is actually in East Meadow, Long Island.

►George Bonitsis, 67, lives in Brooklyn but applied to have his summer home at 190 Bedford Ave. in Breezy Point rebuilt through Build It Back, according to the report. Construction had already begun — and cost the program more than $125,000 — when DOI began its investigation. Construction was then put on hold, the release said. 

►John Phelan, 54 filed a false application to have his second home at 58 Reid Ave. repaired through Build It Back, officials said. The programs spent more than $477,000 on the home he shared with his mother before discovering he didn't live there full time, DOI officials said. Phelan and his mother actually lived in Syosset, Long Island and Maspeth, Queens. It was not immediately clear whether his mother was expected to be charged.

All four of the suspects are awaiting arraignment at Queens Criminal Court. 

“DOI’s proactive monitorship of the city’s Hurricane Sandy recovery programs put the construction work and its expenditures under a microscope, allowing DOI to take immediate action in saving nearly $40 million in public funds so far," DOI's Commissioner Mark Peters said in a press release.

Further audits and monitoring of both programs — which found contractors were overbilling or overstating the amount of work they were doing — have also saved the city $40 million, Peters said. Of that $40 million, the majority, or $37 million, came from Rapid Repairs, officials said.

“We are thankful to DOI for their partnership. [Housing Recovery Office] regularly performs audits when we suspect possible fraud, and we keep in constant communication with DOI to address any concerns. People are returning home every day, and we will not let bad actors get in the way of our goal of providing safe, resilient housing for those that need it most,” said Amy Peterson, director of Build it Back.

At one home, a contractor claimed to install 1,500 linear feet of electrical wire when he only installed 400 linear feet, for an additional $19,800, the city found.

Contractors were also scamming the city by charging way above the going rate for materials like vinyl floors or double-billing for the green construction fences that went around homes — saving the city millions after DOI stopped the practice.

Contractors also double billed the city for boilers and utilities already repaired years before through Rapid Repairs, a program created by former Mayor Michael Bloomberg in the weeks following Hurricane Sandy that provided necessary utility repairs like new boilers and electrical wiring to get displaced residents home faster.