Daniel Yeh's Coerced Statement

Attorneys: Hotel operator's confession forced

By Laura Elder
The Daily News

Published March 4, 2006

GALVESTON — An attorney for Daniel Yeh, operator of the Flagship Hotel accused of defrauding federal hurricane lodging programs, said agents in December ransacked his client’s home and coerced a confession.

Houston attorney Robert S. Bennett, who with island attorney Michael Fieglein is representing Yeh, said that on Dec. 21, about eight federal agents arrived at his client’s Sugar Land home with guns drawn.

“They ransacked his house, put him in a room by himself and made him write a confession without benefit of counsel,” Bennett said. Agents removed computers and financial and medical documents from Yeh’s home, Bennett said.

By the time of the raid, brain tumors had rendered Yeh, 52, incapable of exercising his rights or making reasonable and logical decisions, Bennett said. Yeh has had three brain surgeries to remove tumors, wasn’t mentally competent during the period in which he is accused of filing false FEMA reimbursement claims and lacks the mental capacity to stand trial, Bennett said.

Federal officials declined Friday to respond to allegations made by Yeh’s attorneys.

“Like any other defendant who is charged with a criminal offense, Mr. Yeh will have his day in court,” said Nancy G. Herrera, executive assistant U.S. attorney. “His attorneys will have an opportunity to present his arguments then, and the United States will respond in open court.”

A Houston grand jury Thursday returned a 39-count indictment charging Yeh with defrauding hurricane-lodging programs of at least $232,000.

After Hurricane Katrina devastated Louisiana and Mississippi on Aug. 29, leaving thousands homeless, the federal government funded a program allowing some evacuees to stay in hotels free while FEMA grant programs reimbursed the hotels.

The Flagship, 2501 Seawall Blvd., enrolled in FEMA programs after Hurricane Katrina, according to the indictment. The hotel continued to participate in the program after Hurricane Rita, which made landfall Sept. 24.

Yeh is accused, among other things, of filing fraudulent reimbursement claims for rooms in the names of supposed hurricane evacuees on dates when those rooms weren’t occupied.

The indictment claims that from Oct. 1 to Dec. 15, Yeh took over the task of billing the federal lodging programs online.

Yeh’s attorneys say their client relied on an executive, no longer with the hotel, for guidance on FEMA billing.

They also say their client did not knowingly file false claims and has voluntarily returned the $232,000 to the federal government. All along, Yeh has cooperated with the federal government, Bennett said.

Yeh, who also teaches computer science courses at the University of Houston, relied mostly on employees to manage the 220-room Flagship Hotel, his attorneys say.

Bennett said FEMA, which was criticized for its initial response to Hurricane Katrina, is using people such as Yeh to appear to be responsible managers of taxpayer dollars.

“The truth is, we’ve been meeting with them since January to try to resolve what we consider a civil dispute over billing and they want to turn it into the mafia, or some big deal, and it’s a small Chinese man trying to make a living in the United States,” Bennett said.

FEMA officials say general audits are normal parts of operations after every disaster.

“FEMA, as a steward of taxpayer dollars, wants to make sure every person eligible for assistance gets that assistance,” said Hannah Vicks, a spokeswoman for the agency. “If during an audit the Inspector General finds irregularities or instances of fraud, we make every effort to recoup those funds.”

The federal case against Yeh is set to be prosecuted in the U.S. District Court in Galveston, according to the U.S. attorney.