Brooklyn Grand Jury to Probe for Post-Hurricane Scams

Claims of price-gouging and fraud after Hurricane Sandy prompted a grand jury probe in Brooklyn, three days after state investigations were announced in New York and New Jersey.

District Attorney Charles Hynes empaneled a special grand jury in Brooklyn to examine claims that hotels and gas stations committed grand larceny by “dramatically” raising prices in the wake of the storm, that fake charities sprang up to solicit contributions, and that construction companies took money for work they don’t intend to perform, he said today in a statement.

“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 the statement. “To raise the price of a hotel, as people seek emergency shelter, is just unconscionable.”

New York and New Jersey attorneys general said earlier this week that they were investigating complaints of price gouging for gasoline, food and generators following Sandy.

New York is investigating more than 500 complaints from across the state, mostly about gasoline prices. There were also reports of merchants’ charging $7 for a loaf of bread and $10 for a box of matches, New York Attorney General Eric Schneiderman’s office said Nov. 5.

New Jersey

In New Jersey, Attorney General Jeffrey Chiesa said he issued about 100 subpoenas to businesses accused of price gouging after the state’s Division of Consumer Affairs received almost 1,200 complaints about filling stations, hardware stores, convenience stores and hotels.

New York law prohibits selling goods or services for an “unconscionably excessive price” during “abnormal disruption of the market.” New Jersey prohibits raising prices beyond 10 percent during an emergency. Violators risk fines of at least $10,000.

Hurricane Sandy last week killed more than 100 people, triggered an almost 14-foot tidal surge, displaced thousands, knocked out power to millions and crippled mass transit. New York Governor Andrew Cuomo said damage and economic losses in the state may total $33 billion.

To contact the reporter on this story: Chris Dolmetsch in New York at cdolmetsch@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.

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