Con artists try to cash in on Manhattan disaster

$2 billion in charity cash draws thieves in wake of terrorist attack

April 14, 2002|By William Sherman | William Sherman,KNIGHT RIDDER/TRIBUNE

NEW YORK - The fires were still raging and the dust clouds choking on Sept. 12 when Johnny Dunham went to work, making his way down to the first sublevel of 5 World Trade Center.

Wearing a Fire Department jacket stolen from a destroyed ambulance and carrying a bag used to hold oxygen canisters, Dunham walked into the Tourneau watch store, rummaged through the cases and took at least six watches, including a $15,000 Cartier, and a large amount of cash.

Then, the 26-year-old unemployed security guard calmly walked past emergency workers and returned to his home in the Bronx.

Within 24 hours of the terrorist attack, thieves, hustlers and con artists jump-started their scams, twisting one of the worst disasters in American history, and the overflow of grief and giving that came with it, to their advantage.

Dunham, now serving a prison sentence of at least 2 1/2 years for his thefts, may have been the first, but he was by no means the last.

70 cases in 2 weeks

Two weeks after the attack, Manhattan District Attorney Robert Morgenthau's office had 70 cases linked to Sept. 11 scams under investigation, and since then, there has been an unparalleled variety of individual swindles running from the penny ante, such as selling fake Ground Zero dirt to souvenir collectors, to more than $600,000 in bogus life insurance claims filed by a Pike County, Ga., couple.

Crooks from throughout the United States and abroad have faked deaths and injuries to defraud the Red Cross and other charities; submitted phony life, property and workers' compensation insurance claims; sold bogus anthrax cures and bioterrorism-protection equipment, and used the Internet to solicit contributions for victims.

"It is an atrocity. I can think of nothing more reprehensible than taking advantage of this national tragedy for selfish financial gain," said Greg Serio, commissioner of the state Department of Insurance.

His office is investigating 50 cases of major fraud related to Sept. 11. That effort is complicated by the 29,176 insurance claims filed in connection with the devastation and the $15.2 billion paid out on those claims.

$2 billion pot

The potential pot for con artists also includes $2 billion collected by various charities. The American Red Cross alone has handled 55,400 disaster-related cases and paid an average of $51,523 to 3,303 beneficiaries, according to spokesman Leslie Gottlieb.

Some of those trying to take advantage of the opportunities are silly and transparent, such as the Upper West Side couple who filed a property damage claim for an apartment that is nearly 4 miles from the site, according to Insurance Department spokeswoman Joanna Rose. Others, such as the bogus Internet charity solicitations run from overseas-managed Web sites, are more difficult to shut down.

Some of the thefts have been as brazen as they are outrageous.

Three days after the attack, a 3-ton, $25,000 Police Department earth mover that was being used in the cleanup was loaded onto a flatbed trailer in the dead of night and driven away by thieves. It was later recovered through an informant's tip.

And by the end of September, police learned that 250 tons of scrap metal from Ground Zero had been diverted to private scrap yards, allegedly by mob-connected truckers.

Merchandise hucksters were plentiful as well, with flags, button, shirts and other items for sale, with profits going to them instead of relief agencies, as they claimed.

Soon after the disaster, a pair of music bootleggers was caught selling CDs of "God Bless America" with stickers claiming proceeds would go to the Twin Towers Fund and other relief efforts. When police raided their warehouse in Queens, N.Y., they found more than 44,000 CDs in a secret compartment behind a false floor-to-ceiling bookcase that opened at the press of a hidden electronic button. The pirated CDs were of popular artists including Mary J. Blige, Destiny's Child and Janet Jackson.

Anthrax fears

Playing on fears of a widespread anthrax attack, scores of mail order and Internet companies advertised and sold a variety of foams, kits, fungicides, masks and other items billed as decontaminants or protective devices.

More than 200 Web sites based in 30 states that were selling the bogus products were identified by the Federal Trade Commission.

"These companies used inaccurate and unfounded claims to sell peace of mind," said Howard Beales, director of the commission's Bureau of Consumer Protection. The agency has moved to stop the illicit sales.

Identity thieves also were quick to get involved. Those scam artists collected the names of the missing pictured on hundreds of posters plastered around Manhattan and began calling victims' families asking for personal information about the deceased, including Social Security numbers, birth dates and mothers' maiden names.

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