Insanity Defense Likely in Fraud Case

By Laura Elder
The Daily News

Published March 29, 2006

GALVESTON — The operator of the Flagship Hotel is likely to plead insanity in the federal fraud case against him.

“The probability is that we will,” Daniel Yeh’s attorney, Bob Bennett, told U.S. District Magistrate Judge John Froeschner in a pretrial hearing Tuesday morning.

Bennett and federal prosecutors appeared before Froeschner to discuss psychiatric evaluations of the man accused of bilking at least $232,000 from the Federal Emergency Management Agency.

Charges against Yeh include filing fraudulent reimbursement claims to get undeserved money from the agency, which had been paying hotels to grant refuge to people left homeless by hurricanes Katrina and Rita last year.

Yeh, 52, has undergone three surgeries to remove tumors, and Bennett has said that Yeh was not competent to stand trial.

Froeschner told Bennett and federal prosecutors that the judge himself would select a doctor to perform a competency examination if the two sides could not agree on a doctor.

The judge also said the examination would only determine competency to stand trial, not the issue of whether not guilty by reason of insanity would be a viable plea.

“If he’s found to be incompetent to stand trial, then the insanity issue would become moot,” the judge said. “We won’t reach the insanity issue until competency is settled.”

Yeh could be hospitalized if he is found incompetent to stand trial.

Prosecutors noted that Yeh had been engaging in complex business deals and teaching computer science during the time he was supposedly insane.

Froeschner warned Bennett that the “competency bar is not raised because Mr. Yeh is smarter,” adding that he could be found competent to stand trial, even if his surgery ordeal had diminished his intellect somewhat.