| Daniel Yeh, 52, of Sugar Land, faces a 39-count indictment with 22 counts of wire fraud and 17 counts of filing false claims against the Federal Emergency Management Agency (FEMA). Yeh is the principal owner of Flagship Hotel Ltd., which operates the Flagship Hotel (Flagship), located at 2501 Seawall Boulevard in Galveston.
Yeh is accused of wire fraud and filing false claims totaling at least $232,000 in connection with disaster relief lodging programs for hurricane evacuees funded by FEMA's Public Assistance Program. This case is the first of its kind in the nation. Eight others were previously arrested in this district on charges of fraud in connection with hurricane disaster relief programs. The indictment was returned today by a Houston grand jury, and will be prosecuted in the Galveston Division of the Southern District of Texas. A warrant will issue for Yeh's arrest. It is anticipated that the U.S. District Court for the Galveston Division will issue an order setting a date and time in the near future for Yeh to surrender to the U.S. Marshal's Service and be arraigned on the charges.
After Hurricane Katrina, a FEMA Public Assistance grant funded the Special Transient Accommodations and Assistance Program (STAAP) administered by the Red Cross, and later known as the Short-Term Lodging program (SLP) administered by FEMA, allowed hurricane evacuees from designated disaster areas to stay in hotels free of charge. The FEMA grant programs reimbursed those hotels for the evacuee's stay.
According to the indictment, the Flagship enrolled in the FEMA lodging programs after Hurricane Katrina to provide hotel rooms for evacuees and continued to participate in the programs after Hurricane Rita.
The indictment alleges that between Oct. 1, and Dec. 15, 2005, Yeh knowingly devised a scheme to defraud the federal disaster relief programs of at least $232,000.
As part of the scheme, it is alleged that Daniel Yeh took over the task of billing the federal lodging programs online after Hurricane Rita.
Yeh is accused of filing fraudulent claims for reimbursement for rooms that housed employees, friends, family members, business associates and for some rooms that were not even occupied. All were called evacuees, but were not.
Each of the 22 wire fraud counts carries a punishment of up to 20 years imprisonment and a fine of up to $250,000. Each of the 17 false claim counts carries a punishment of up to five years imprisonment and a fine of up to $250,000.
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