“Over the years, I’ve realized that anytime you establish a very generous public compensation program, it will trigger a certain amount of fraudulent activity,” said Kenneth Feinberg, a Washington, D.C., attorney who was appointed by BP and the White House to serve as the fund’s claims administrator.
Rattling off statistics, Feinberg noted that the claims facility found about 18,000 individual applications that “satisfied our suspicions of fraud.” After the facility’s investigators reviewed them, Feinberg said he referred about 4,000 of those applications to the Justice Department for criminal review because they included “doctored” paperwork.
He said that overall the amount of fraud in “absolute terms” was “substantial,” but in “relative terms” it was “modest.”
The Gulf Coast Claims Facility received about 1.1 million claims from all 50 U.S. states and 35 foreign countries, including applications from fishermen, hotels and restaurants. Overall, the GCCF approved more than one-third of those claims, totaling $6.5 billion in payouts to 226,000 claimants. The majority of applications were denied for lack of valid documentation, and a fraction for fraud.
“There’s a far cry from gaming the system and pushing the boundaries of the [claims process] to doctoring tax returns and adding zeros,” said Feinberg, who also served as the administrator for the 9/11 victims’ compensation fund and the government’s TARP bailout for banks.
Asked how some suspected criminals were able to bilk the BP fund program, he said: “You can’t catch everybody. Inevitably in a program like the GCCF, mistakes are made and certain fraudulent applications are paid.’’
Lindor’s alleged scheme was run out of his Homestead company Noula, which was infiltrated as part of an FBI undercover investigation.
According to a court affidavit, the probe started when the FBI received a tip last September that Lindor was breaking the law under the cover of his business, which “purported to provide immigration services to immigrants in the area.”
Then, the FBI obtained a “complaint report” that had been written in early 2011 by someone claiming to be associated with the Ocean Reef Club in Key Largo. The complainant’s email said that more than 20 employees were in on Lindor’s scheme, including a housekeeper who made $12,000 a year and who, after submitting “fictitious information,” received $19,000 from the BP fund.
“Many people are Haitian and Hispanic, and they are being told to be quiet and take the money,” said the tipster, who wanted his identity protected.
An Ocean Reef Club spokesperson declined to comment.
FBI agents, assisted by the U.S. Postal Inspection Service and Secret Service, discovered that other claims for lost wages were filed through Lindor’s business by 15 employees at the Island Grill in Islamorada.
The investigation also uncovered that Lindor himself filed a claim for BP funds in November 2010, in which he asserted that his work hours were “drastically reduced” at the Coalition of Florida Farm Workers Organizations “as a result of a slowdown in business due to the oil spill,” according to the FBI affidavit.
Lindor, who had worked for the farm cooperative from 2003 to 2009, said in his application that he made $22,700 in 2010. But investigators found that he had no reported earnings from the cooperative for that year.
Lindor, a permanent U.S. resident who has lived in South Florida for 20 years, has been charged by a federal criminal complaint accusing him of filing a fraudulent BP claim for himself and of illegally trying to obtain U.S. citizenship. But a pending indictment is likely to add the hundreds of allegedly false claims he filed on behalf of other people.
On Tuesday, U.S. Magistrate Judge Patrick White denied a request by Lindor’s attorney for a nominal bond, after the prosecutor pointed out that the defendant’s uncle and others who were willing to put up his bail received money from his alleged BP claims scheme.
“It’s an indication of how incestuous this is,” the prosecutor, Watts-Fitzgerald, told the judge.
White found that Lindor would be a “flight risk” to his native Haiti, keeping him behind bars before trial.
“Fraud seems to be a lifestyle [for him],” the judge said.