Federal grand jury indicts Flagship operator

From staff reports
The Daily News

Published March 2, 2006

A federal grand jury on Thursday returned a 39-count indictment charging Flagship Hotel operator Daniel Yeh with 22 counts of wire fraud and 17 counts of filing false claims against the Federal Emergency Management Agency.

The case is the nation’s first involving disaster lodging programs, federal officials said.

Yeh is principal owner of Flagship Hotel Ltd., which operates the hotel at 2501 Seawall Boulevard, according to U.S. Attorney Chuck Rosenberg.

Yeh is accused of wire fraud and filing false claims of at least $232,000 in connection with disaster relief lodging programs for hurricane evacuees.

A warrant will be issued for Yeh’s arrest, the U.S, attorney said, adding that the U.S. District Court in Galveston probably would issue an order setting a date and time in the near future for Yeh to surrender to U.S. Marshals and be arraigned on the charges.

The indictment alleges Yeh knowingly devised a scheme to defraud the federal disaster relief programs of at least $232,000.

The government alleges Yeh took over billing the federal lodging programs online after Hurricane Rita.

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.

Yeh’s attorneys in written statement said a manager who was no longer with the operation provided guidance about FEMA billing guidelines.

The statement also says hotel management cooperated with government officials and made “immediate reimbursement” when “the matter” was brought to its attention.

His attorneys also complained that the government pursued the indictment despite “Yeh’s lack of mental competency from frontal lobe brain damage as a result of three brain tumors.”