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FL Man Busted For Online Katrina Relief Scam

Not anyone from the Veterans For Peace or Cindy Sheehan or Michael Moore — yet. But give the DOJ time. From the South Florida Sun-Sentinel :

Aventura man accused of duping donors with Web site on helping Katrina victims

By Madeline Baró Diaz
October 4, 2005

MIAMI · Gary Kraser's stories of rescuing Hurricane Katrina victims in Louisiana were so compelling that in just a two-day period people from around the world sent almost $40,000 to help him and his fellow pilots buy fuel for the relief missions.

In one Internet post, Kraser spoke of bringing a 7-month-old baby from Louisiana to Florida for a transplant. In another, he described the devastation in the Katrina-ravaged region, dogs wrapped in live electrical lines, people awaiting rescues on their roofs and dead bodies.

But it was all a lie, federal prosecutors said. Kraser, they said, did not even have a pilot's license.

"There were no flights. There were no children being rescued. There was no 7-month-old baby that needed a transplant. … None of this was true," said U.S. Attorney R. Alexander Acosta.

On Monday, Kraser was arrested on four counts of wire fraud for soliciting the donations through the Web site www.AirKatrina.com. Kraser of Aventura made his first appearance in federal court and will return for a detention hearing Thursday. Acosta said it is the U.S. Department of Justice's first Hurricane Katrina charity fraud prosecution.

On AirKatrina.com, donors could use the Internet pay service PayPal to make donations to Kraser. Suggested donations included $3,000 for a full tank of fuel. The Web site said Kraser and other pilots were flying medical supplies into Louisiana and carrying children and people needing medical care. All of it was done at their own expense, the Web site said.

Rick Schwartz, a Boca Raton-based businessman who owns domain names, was part of a group of domain name owners who set up the Web site to collect donations for Kraser on Aug. 31, shortly after the hurricane hit the Gulf Coast. The domain name owners were moved by Kraser's rescue stories on the private chat board they belonged to.

"We're all watching the images on TV, and these people are getting no help," Schwartz said. "We all thought he was a hero."

But Schwartz became suspicious when Kraser could not back up his assertions of being a former military pilot and other claims. Schwartz, who donated $1,000 to Kraser, took AirKatrina.com down after about two days. On the Web site, donors were told they could send checks to a trust account belonging to Pembroke Pines Attorney Howard Neu. Neu, who is Schwartz's business partner, said he received about $3,000 or $4,000 in checks before figuring out Kraser was not legitimate. He returned the money, and both he and Schwartz spoke with federal investigators.

Prosecutors said PayPal also cooperated with investigators, and most of the donated money was returned. In all, 48 people donated, prosecutors said.

Acosta and FBI Special Agent in Charge Michael Clemens warned people about Internet frauds. The U.S. Department of Justice has created a Hurricane Katrina fraud task force that is looking into charity fraud, identity theft, insurance fraud and other disaster-related crimes, they said.

"It is very easy to set up a Web site," Acosta said. "It is very easy to make false claims."

Madeline Baró Diaz can be reached at mbaro@sun-sentinel.com or 305-810-5007.

This may have been the first Katrina fraud case brought by the DOJ, but it sure won't be the last. This guy is small potatoes compared to what the VFP and their pals have been doing.

This article was posted by Steve on Thursday, October 6th, 2005. Comments are currently closed.

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