Two former disaster recovery experts at Hagerty Consulting, which L.A. Mayor Karen Bass appointed to lead rebuilding efforts after the recent wildfires, pleaded guilty in 2022 and 2023 to defrauding New York City of Hurricane Sandy relief funds.
Walter Melnick, who had been hired as a contractor for Evanston, Illinois-based Hagerty Consulting firm, was accused in 2022 of having claimed lodging reimbursements to which he was not entitled, and of making false statements to investigators.
Melnick was described in a press release by another firm as having “managed New York City’s post-Sandy $15 billion recovery program” while at Hagerty. He has since evidently retired from the industry.
Another then-Hagerty consultant, Mark O’Mara, was accused of claiming more than $250,000 in reimbursements to which he was not entitled, and of trying to destroy evidence.
Both pleaded guilty after reaching plea agreements.
Melnick was sentenced to a year of home confinement, plus two additional years of probation. O’Mara was sentenced to probation. Both had to pay back the total money they had received unlawfully (over $380,000 and over $250,000, respectively).
A press statement by the U.S. Attorney for the Southern District of New York in 2022 described the charges against Melnick:
Beginning in or about 2013, in the aftermath of Hurricane Sandy, the City of New York received billions of dollars in federal money to fund Hurricane Sandy-related recovery efforts. The City used certain of these funds to hire Company-1 [Hagerty] to assist with Hurricane Sandy relief (the “Sandy Project”). Company-1 hired MELNICK as an independent contractor to work on the Sandy Project.
Between in or about 2013 and in or about 2019, while working on the Sandy Project for Company-1, MELNICK participated in two schemes to defraud the New York City Office of Management and Budget (“NYC-OMB”). First, between in or about January 2013 and in or about October 2017, MELNICK conspired with at least one other individual (“CC-1”) and submitted fraudulent documentation to NYC-OMB via Company-1, falsely claiming that he was renting and living in an apartment in New York in order to obtain lodging and travel reimbursements. Upon learning that this first fraudulent scheme was under investigation, MELNICK told CC-1 to lie to law enforcement. Second, between in or about 2017 and in or about 2019, while working on the Sandy Project, MELNICK conspired with at least two individuals, including another employee of Company-1 (“CC-2”) and a family member (“CC-3”), to purchase a property that CC-2 used to submit fraudulent reimbursement requests to NYC-OMB via Company-1 for lodging expenses to which CC-2 was not entitled. CC-2 transferred the proceeds from this fraudulent scheme to CC-3, who used part of the proceeds to pay the mortgage and maintenance for the property and retained the rest. In or about March 2022, MELNICK made false statements to the Government in connection with this second fraudulent scheme.
A press statement by the U.S. Attorney for the Southern District of New York in 2023 described the charges against O’Mara:
Beginning in or about 2013, in the aftermath of Hurricane Sandy, the City of New York (the “City”) received billions of dollars in federal money to fund Hurricane Sandy-related recovery efforts. The City used certain of these funds to hire Company-1 [Hagerty] to assist with Hurricane Sandy relief (the “Sandy Project”). Company-1 hired O’MARA to work on the Sandy Project.
Between at least in or about 2013 and in or about 2019, while working for Company-1, O’MARA submitted fraudulent information and documents, including a fraudulent lease agreement, to the New York City Office of Management and Budget (“NYC-OMB”) via Company-1 in order to obtain lodging reimbursements from the City to which he knew he was not entitled. Between in or about 2017 and in or about 2019, O’MARA also conspired with others – including another consultant at Company-1, WALTER MELNICK – to defraud the City by falsely claiming that he was residing in an apartment purchased by an individual at MELNICK’s direction. O’MARA fraudulently obtained more than approximately $250,000 from the City via Company-1 as a result of these schemes.
Additionally, in or about February 2020, when the City began raising concerns about Company-1’s travel reimbursements, O’MARA destroyed relevant emails and other communications to cover up the fraud.
Court documents reveal that Hagerty fired O’Mara, apparently in response to the charges. However, several colleagues from Hagerty wrote to the court during the sentencing phase of the trial to offer their support and to describe their high regard for his work.
Breitbart News reached out to Hagerty for comment. No reply was received.
Los Angeles awarded Hagerty Consulting the contract to lead rebuilding after a presentation behind closed doors. There were apparently two other bidders. The amount of the Hagerty contract with L.A. has not yet been disclosed, the Los Angeles Times reported Friday.
Chief Recovery Officer Steve Soboroff told Breitbart News last month that there would be a competitive bidding process and that the firm chosen would function as an “owner’s rep” to oversee projects.
As Breitbart News has reported, Hagerty was founded by Steve Hagerty, the former mayor of Evanston, Illinois, a liberal enclave that was the first city in the U.S. to offer “reparations” for slavery — or, in this case, for past racial discrimination.
Joel B. Pollak is Senior Editor-at-Large at Breitbart News and the host of Breitbart News Sunday on Sirius XM Patriot on Sunday evenings from 7 p.m. to 10 p.m. ET (4 p.m. to 7 p.m. PT). He is the author of The Agenda: What Trump Should Do in His First 100 Days, available for pre-order on Amazon. He is also the author of The Trumpian Virtues: The Lessons and Legacy of Donald Trump’s Presidency, now available on Audible. He is a winner of the 2018 Robert Novak Journalism Alumni Fellowship. Follow him on Twitter at @joelpollak.
