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Post date: October 31 2013

A.G. Schneiderman Announces $40,000 Penalty In Long Island Company Bid To Scam Hurricane Victims

G.C. Environmental Sent Superstorm Sandy Victims Deceptive Solicitation Letters That Mimicked DEC Oil Spill Violation Notices, Falsely Warned Property Owners Of $25,000-Per-Day Fines And Promoted Company's Cleanup Services As A Solution

Schneiderman: This Company’s Actions Were Illegal And Will Not Be Tolerated I

NEW YORK -- Attorney General Eric T. Schneiderman today announced that G.C. Environmental, Inc., based in Bay Shore, Long Island, will pay a $40,000 penalty for violating New York State law by using deceptive practices in an attempt to obtain business from victims of Hurricane Sandy. An investigation by the Attorney General’s Environmental Protection Bureau found that, within weeks of the storm, the company mailed nearly 2,300 letters closely resembling State Department of Environmental Conservation notices of violation to property owners who had suffered petroleum spills as a result of the storm. 

The letters warned that the spills could result in DEC penalties of up to $25,000 per day and then offered GC's oil cleanup services in order to avoid the penalties. Seventy percent of the letters were sent to property owners with Long Island addresses. The other 30% were sent to addresses in Brooklyn and Queens.

"It’s unconscionable that a company would try to drum up business by preying on the misfortune and fears of victims of Sandy," Attorney General Schneiderman said. "G.C. Environmental's actions were not only unscrupulous, they were illegal. My office is here to stop this kind of malfeasance and will hold this and any other company accountable for illegal actions." 

On October 29, 2012, Sandy made landfall in New York. More than 4,600 oil spills were reported to the DEC as a direct result of the storm, nearly all on the shorelines affected by the storm surge. The department records all reported spills on a publicly available database. On December 10, 2012, GC began using this database and sent 2,278 solicitation letters to property owners who had reported oil spills on their property as a result of the storm. 

The format, letterhead and text of the solicitation letters appeared to be an official notice of violation sent by DEC. The letterhead contained a logo very similar to the DEC logo, and, under the logo, the abbreviation “DER” appeared. The letters were sent in an envelope with a return address for “Department of Environmental Remediation” that is similar to the DEC’s Division of Environmental Remediation, which is referred to as DER. 

The GC letter created the impression that the DEC was contemplating a fine or penalty against the recipient. The letter warned that property owners could be subject to penalties of up to $25,000 per day if they did not immediately begin cleaning up the petroleum spills and could be responsible for any costs incurred by the state if it cleaned up the spills. The envelopes containing the letter warned in bold print "IMPORTANT INFORMATION: PENALTIES MAY BE ASSESSED (PLEASE READ THE ENCLOSED INFORMATION CAREFULLY)." The last paragraph of the letter promoted and offered GC’s services in cleaning up spills in order to avoid fines. 

After recipients started receiving the solicitation letters, DEC received numerous calls from property owners who, after reading the letter, believed that the department was in the process of fining or penalizing them for oil spills on their property that had resulted from Sandy. DEC immediately issued a “consumer alert” to inform the public that DEC did not author or send the solicitation letters, would not seek to impose fines or penalties on any property owners for any oil spill resulting from the storm, and would, in fact, clean up the spills at no cost to the property owners.

On December 13, 2012, the Attorney General's Office wrote the president of GC, Greg Collins, informing him that his company's solicitation violated New York law on fraudulent and deceptive business practices and false advertising. The office advised Mr. Collins to immediately cease and desist from distributing the letter and to issue a letter of retraction to all recipients. 

The Attorney General's Office subsequently conducted a full investigation of the GC's solicitation, including a subpoena of related documents, an informational hearing with Mr. Collins and interviews with DEC and former GC employees. While the investigation confirmed that GC's actions had violated state deceptive business practices and false advertising laws, no evidence was found that any recipient of a solicitation letter actually retained GC to conduct oil spill cleanup work.  

“Many state agencies have worked together to help victims recover and rebuild from the devastating effects of Hurricane Sandy, and we should not allow others to take advantage of such natural disasters for their own benefit,” DEC Commissioner Martens said.  “DEC will continue to work with homeowners and towns to move forward in the reconstruction of their properties, and also work to enhance protections from future storms and flooding.”

The matter was resolved through an Assurance of Discontinuance signed by GC and the Attorney General's Office Tuesday. This settlement document commits GC to paying a $40,000 penalty to the State of New York. As the settlement also commits GC to providing a refund to any property owner who was deceived by the solicitation, the Attorney General asks any property owner who may have hired GC in response to GC's solicitation letter to contact his office. 

The Attorney General thanked DEC for its assistance.

This matter was handled by Assistant Attorneys General Daniel Leinung and Andrew Gershon of the Environmental Protection Bureau, under the supervision of Bureau Chief Lemuel M. Srolovic and Executive Deputy Attorney General for Social Justice Alvin Bragg, with the assistance of Jane M. Azia, Chief of the Bureau of Consumer Frauds and Protection. The overall case was supervised by First Deputy for Affirmative Litigation Janet Sabel.